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Business Plans are Essential

Twelve months ago I wrote my first President’s Message titled “Controlling Our Destiny.” I am now convinced more than ever that we must control our destiny. We may not be able to change the direction of the tradewinds, but we can trim our sails in the direction that we need to go.

We can accomplish this by creating a written business plan. In my opinion, some high priority items that should be included in your business plan are as follows:

  • Never sign a contract leaving you or your company open to broad or intermediate form indemnification clauses, waivers of subrogation or waivers of lien rights.

  • Subcontractors should not be required to provide certificates of insurance listing owners, architects, engineers, home builders or general contractors as additional insureds.

Current industry practice is to transfer the costs of negligence from those who write the contracts to those who sign the contracts, regardless of who is at fault. This unfair business practice is harming the industry for all parties by increasing the costs of insurance rates as well as the costs of construction itself. We as subcontractors can’t even purchase insurance for some of the contract requirements. These requirements are running subcontractors out of business. It is not the kind of construction environment that we want for our industries.

The definition of “freedom of contract” is not the transfer of risk to subcontractors. This is not the American way of doing business, nor is it ethical. Our goal as subcontractors should be to find a balance of fairness between all entities. By having the integrity to do things right and being fair with your negotiations will put you in control of you destiny.

As my presidential term comes to a close, I want you to know I have been honored to serve in the role for the Association of the Wall and Ceiling Industry. Thank you all for this great opportunity.

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