Best Way to Incentivize Contractors

[Jake Kozul]

I have preparing for a couple new projects, and have to use a new contractor due to capacity issues with the one I typically use. Has anyone had any success in cutting the contractor in on a percentage of the deal, or found a successful way to incentivize hitting particular time markers to ensure a smooth process (or at least as smooth as it can be)? 

Thanks in advance

[Todd Whiddon]

@Jake Kozul More often than not, if we GC a project for another investor we are getting a piece of the action.  Although, it's not just our subs and construction management skills we are bringing to the table.  We'll throw some cash into the deal as well as let our clients leverage our infrastructure, systems, and network that make us more of a "partner" than just a "contractor".

That being said, when we hire other contractors and subs on our jobs, we complete DETAILED scopes of work, with PERFORMANCE timelines, and PAYMENT Milestones. That way we have WHAT we expect from the contractor IN WRITING, and there is no less arguing about money during the course of construction.

We also have a computerized scheduling system  that helps keep tabs on multiple jobs and helps streamline communications to everyone on our team including our subs.  Delays and other $%#$@ happens in construction, but effective systems and COMMUNICATION helps minimize the impact to the bottom line.