You are going into the self-storage business at a great time. The industry is booming and continues to grow as people learn that self-storage is a cost-effective, convenient way to keep their property safe and in good condition without the need to find space at home to put it.
Finding a general contractor to assemble your new steel self-storage buildings takes some legwork on your part to ensure you have a contractor you can work with, that fits your budget, and provides all the services you require for your project.
Below are the steps you need to take to find the best contractor for the job of erecting your new business.
Step 1: Pre-screen Your List
Before you contact any of the contractors on the list you made pre-screen each one to make sure it is a legitimate business with a clean record. You can save time by doing some homework before setting up interviews and appointments.
The contractor you hire should be licensed, bonded and insured.
Check the Better Business Bureau website for complaints and business standing.
Check the reputation self-storage organizations such as ISS (Inside Self Storage) or SSA (Self Storage Association).
Consider the number of years the contractor has been in business as a quick check of experience.
Once you have weeded out those who seem shady or dodgy, you have a shorter list of contractors to interview, each of which has passed your first level of scrutiny.
Step 2: Investigate, Research, and Interview Your Short List
Begin your investigation with a request for references and follow through by speaking with as many previous customers as you can.
Ask about the contractor’s work process.
Determine the efficiency and productivity of the contractor.
Take a tour of completed projects including an inside tour.
Check for roof leaks, uneven surfaces, energy waste and other shortcomings.
As you meet with the contractor and project manager, talk about timelines, potential delays, and building protocols to get a sense of experience and problem-solving skills as well as communication skills.
Ask about the services each contractor offers. You will need site design and engineering services to usher you through permitting, zoning and other pre-construction processes. If you are already working with an architect, the contractor must be able to execute the plans already created.
Step 3: Check the Contractor’s Financial Standing
While it’s uncomfortable to inquire about business finances, it’s much less uncomfortable than hiring a contractor who goes out of business in the middle of your project. Do not wait until the contract is awarded to find out.
Ask for an Audited Financial Statement a contractor may have from a recent loan application. Banks typically require them so the contractor should have a copy available for you to inspect.
Ask for an Unaudited Financial Statement. Many contractors prepare statements for their own use.
Ask for Tax Returns. The last two to three years of returns, at a minimum, should be provided if no financial statements are available.
Check the financial statements for cash on hand, the current ratio of current assets divided by current liabilities, the debt to asset ratio and the Z-score. The Z-score is an analytical measure that helps predict whether a company will go bankrupt within the next two years. The higher the Z-score, the more likely the company will go out of business.
Step 4: Compare Prices and Determine Budgets
You may be tempted to start with the price but don’t let it be the only deciding factor. Certainly, you know how much you have to spend, but the contractor with the lowest bidder is unlikely to get you the quality you need or desire.
Wait until you have your shortlist, so you only need to get estimates from two or three contractors to compare. Compare apples to apples; make sure the prices quoted are for the same work. Price comparisons are easier if you are looking into full-service contractors, who often provide some of the best work for the price. Their team is used to working together, and the equipment is familiar and maintained by the people using it.
Costs depend on materials, labor, and time. A pre-engineered building will take less time to erect, but some of the savings may be used for skilled labor.
Step 5: Obtain a Signed Contract
Once you have selected your general contractor, have an attorney create a contract or check the one the contractor uses to make sure your required provisions are locked in. A contract is a legally binding document that protects both you and the contractor from financial loss and other problems.
Never begin a project without a signed contract that contains the project details, timeline, procedures for plan deviations, scheduling, budget, evaluation standards, and compensation guidelines. This is a huge investment for you, and you should take any steps necessary to protect it.
A final word of advice: select a contractor you feel comfortable with. Your projects will go much smoother if there are no personality conflicts. Make sure your contractor has the communication skills you require and the ability to build a relationship with your team. This is someone who is doing an important job for you. You need to be able to trust the contractor to do a quality job.
Building a self-storage facility, like any other construction, is a complex undertaking. You need a contractor in charge with experience and the financial stability to complete the project. Check everyone on your preliminary list for obvious issues and continue to narrow your choices through research, interviews, and price comparisons. Once you determine which contractor to hire, start work after the contract is signed, not before.