Managing Subcontractors on a Multi-Trade Job Without Losing Your Margin

The GC margin problem

General contracting work has a structural margin challenge: you're quoting a job, coordinating multiple trades, managing the customer relationship, and accepting liability for the whole project — while subcontractors do much of the physical work.

The margin you quote for GC overhead has to cover all of that coordination and risk. When it doesn't — when sub costs run over, when schedules slip and you absorb the customer's frustration, when a sub's work needs to be redone — the job that looked profitable on paper isn't.

The contractors who manage subs well have systems. The ones who don't have stories.

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Quote the sub before you quote the customer

The most common GC margin mistake is estimating sub costs from memory rather than getting actual quotes.

"Electrician runs about $X for rough-in." Maybe. But material prices change, your sub's schedule affects their rate, and jobs always have details that make them slightly different from the last one.

Before you send a customer estimate, get written quotes from every sub whose work is material to the total. Build your GC margin on top of actual numbers, not estimates of estimates.

The rule: your markup on sub work (typically 10–20% for GC overhead and risk) must cover coordination time, schedule management, and the liability of being the customer's single point of contact. If the sub runs over, you're holding the relationship. Price accordingly.

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Written scope for every sub

Just as your customer needs a clear scope of work, every sub needs one too.

A verbal briefing is not a scope. "Do the electrical for the kitchen reno" is not a scope. A written document that specifies:

• Exactly what the sub is responsible for
• What is explicitly excluded from their scope
• The assumed conditions
• The timeline and milestone expectations
• The payment terms

This document prevents the two most common sub problems: "I thought that was your job" and "that wasn't in what I quoted."

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Change orders apply to subs too

When the scope changes mid-job — and on multi-trade jobs, it usually does — the change order process runs in both directions.

The customer signs a change order for the additional scope. Your sub provides an updated price for their piece of it. You build your markup on the sub's updated price and pass it through to the customer.

The mistake is letting informal scope changes accumulate and trying to reconcile them at the end. The accumulated informal changes from a two-week renovation can easily represent $5,000–$10,000 in undocumented additional work. Catch them as they happen.

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Schedule dependencies and buffer

Multi-trade jobs have schedule dependencies that can cascade. Framing has to be complete before insulation. Rough plumbing before drywall. Electrical rough-in before inspection before wallboard.

When one trade slips, every subsequent trade is affected. The customer's frustration lands on you.

Build buffer into your timeline estimates — typically 10–15% additional days on any multi-trade project. Deliver early, not late. A job that wraps two days ahead of schedule creates goodwill. A job that runs three days over creates strain, even if the work is excellent.

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Deposits from customers, timely payment to subs

The deposit you collect from the customer funds the working capital that allows you to pay subs on schedule. Subs who are paid promptly and reliably are the ones who prioritise your jobs and show up when they said they would.

A GC who pays late builds a reputation among subs. That reputation affects the quality of subs who are willing to work with you and their responsiveness when your schedule is tight.

Pay your subs quickly. Build that into your cash flow plan from the start of every project.

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Growing from single-trade to GC

The transition from single-trade contractor to general contractor is one version of going from solo to running a team. The operational challenges are similar: you're adding coordination overhead, expanding your liability, and managing relationships in multiple directions simultaneously.

The contractors who make this transition successfully are the ones who build the systems before they need them — documented scopes, written sub agreements, clear change order processes, and rigorous tracking of actual costs against estimates.

The margin is there. Managing subs profitably is a systems problem, not a talent problem.