Ten Questions To Ask Your Trade Partner

MAJESTIC BUILDER INSIGHTS

10 Questions To Ask Your Trade Partner

The residential home market is strong. Competition for talent is intense. You may be considering adding new trade partners or expanding existing relationships to support demand.
Before you take that step and expose your customer relationships, financial performance, legal obligations and reputation in a new partner relationship, it pays to ask a few questions, probably even more than a few. To give you a head start, we’ve outlined our top 10. In this article, the first of two installments, we share the first five.

1. What’s your trade partner’s process for certifying installers?
Perhaps the most basic question is about the diligence the trade partner takes in hiring and managing the people they trust to deliver their products to your customers on-site in your communities. Does your trade partner require background checks for their employees, especially background checks for their installers? Are they I-9 verified? These are individuals who will be in your neighborhoods and in your clients’ homes. Have they satisfied the legal requirements to be on-site?

2. What training do trade partners and/or installers undergo?
Are the employees who work directly on your homes properly trained? Are they qualified to do the work they’re hired to do? How do you know? One way to verify a trade partner is committed to proper training is to ask for their training process. Another way is to ask for independent verification about their industry or manufacturer certifications. Does their business or employees have industry or manufacturer certification?

3. How does the trade partner ensure quality results?
You need to be certain that your trade partners will deliver – quality workmanship and products, on-time, on-budget. Anything less and your bottom-line and your reputation are at risk. Your trade partners should take quality control as seriously as you do. Time is money so delivering certainty to your schedule means more than just showing up, but also showing up and doing it right.
Does the trade partner have a documented quality control and assurance program? And when the inevitable problem happens, do they have a process for catching problems, resolving the issue and then learning from the problem to prevent it from reoccurring? Can they share their process with you?

4. Are they deploying technology for operational efficiency and integrate with your systems?
Today thanks to technology, we can track product and service delivery in real-time, allowing us to know with certainty that our vendors will deliver. From shipping containers all the way to a simple pizza, technology keeps us informed and prevents problems.
What systems and technology does your trade partner have in place to enhance their operational efficiency and improve your certainty? Are they using technology to move from the order and specifications stage to manufacturing and all the way through installation in a streamlined process? Are they able to integrate seamlessly with your systems and processes to make life easier for you?

5. How are they sourcing their products to ensure quality?
You’re relying on your trade partner to provide quality products and be able to do that consistently. Are they sourcing first-grade products? And are they getting that product directly through a manufacturing source that can deliver consistency over time? There’s a lot of second-grade products on the market. There are also middlemen who might sell a load or two of quality product but not be able to deliver on a consistent basis
Your homes and your reputation are first-grade, not second grade. Make sure your trade partner measures up. Subpar products ultimately tie back to the builder – with customer complaints, your warranty work, and your brand name in social media.

Many builders and construction companies have regular vendor reviews where they evaluate existing and potential trade partners. Others have a more informal approach. Whatever your approach, we’ve found it pays to ask a few questions of your trade partners, especially in today’s rapidly changing market.
In this second installment of our top 10 questions to ask, we highlight some questions that get to the business scale, stability and operational qualifications of trade partners.

6. How does the fabricator manage their supply chain?
The supply chain is global. Trade partners with the right relationships and supply chain management philosophy can bring great value to their builder partners. On the other hand, we’ve all seen the nuances and risks in play with a global supply chain. Can your partner tell you how they manage their supply chain to minimize potential disruptions and delivery for certainty in your schedule, in the fabrication and installation process and in quality?
Is their supply chain structured to mitigate the risk of disruption? Risks can include labor strife, tariffs, logistics, government action (or inaction). Does the partner have stone coming from multiple markets? (Consider that China might not be on this list today because it’s the latest example of supply chain disruption.)

7. Is the trade partner financially solid?
The last thing you need is for a trade partner to not be able to deliver because they are not able to meet their financial obligations. While it may be difficult to assess the specific financial stability of partners, there are questions you can ask. How long have they been in business? Have you assessed their insurance and financials? Do they have references from a major bank? Do they have a credit line to be able to withstand a disruption in the industry? Audited financials? Insurance with a highly-rated insurance company?

8. What do their clients say about them?
This may be an obvious question, but it can get overlooked in the rush to get work done. Can your trade partner give you client references? And, what do they say about the partner? Are they eager to offer specifics or hesitant to talk? Can they tell you about positive experiences and the way the partner responds when challenges arise?
If a trade partner can’t give you a couple of referenceable clients, what does that say about them?

9. What’s their team, both the team that’ll work with you day-to-day as well as the team that works behind the scenes in leadership, in operations, in administrative areas:
Even when buying products, the people behind the products can make or break the end result. Who’s your day-to-day contact? What’s their experience? What happens when that person isn’t available (think vacation, sick leave, even turnover)? Is there a back-up?
Then is there a team behind the team? Is there a professional leadership structure that supports the various aspects of the business – supply chain, financial, training, safety, compliance, operations? There are times when it’s nice to be working directly with a business owner, but consider all the different aspects that go into consistently running a successful business and delivering the products and services you need. Are those pieces in place with your trade partners?

10. Do they have adequate planning for redundancy and disaster?
There are numerous risks and threats to business operations today. Disruptions can be caused by natural disasters, weather, supply chain disruption, logistical problems, cyber-attacks. Has your trade partner worked through various risk management scenarios? Have they created plans for those scenarios? Do they have redundancy operations and back-ups in place to restore operations quickly when problems arise?

That’s our top 10 questions. But, because we always want to over-deliver, we have one bonus question. You’re entering into an important partnership. Is it with a company that has a reputation that will compliment your reputation? Are they well-regarded in the industry and in their communities? Are they known as an industry leader and respected for their expertise? Do they stand behind their work with a warranty program?

When you’re putting your trust in a trade partner, it pays to ask a few questions. Your business and your reputation will be better for going through the process. We hope these questions have given you some additional perspective on what to ask today to have more certainty tomorrow. And, if you’d like to know our answers, send us an email and we’ll be happy to share them.

 

by Scott Byers, Majestic President & CEO