Subcontractor vs Contractor:
Whats the Difference
This resource article talks about some of the differences between contractors and subcontractors who work in the field of construction. Although these terms are sometimes used interchangeably, it is important to understand the few key differences between the two roles and how they work in conjunction to complete projects effectively.
The majority of construction work is carried out through contracting processes whereby a construction firm wins a contract to complete work and then completes that work in exchange for money. Understanding the role of contractors and subcontractors in making these works happen can help you better optimize the results of your own construction business. First, let’s take a look at what it means to be a contractor or subcontractor; then, we’ll look at some of the differences and how to get them working in your favor.
What is a Contractor?
A contractor is a person or a company that seeks to do business by obtaining contracts and carrying them out. Being a contractor is similar to being a business owner – you negotiate your deals, work for yourself, have your clientele and are rewarded on your own merits. A construction contractor offers a particular suite of skills which he can perform for clients on a contractual basis. As a contractor, you will likely be paid more for work than you would be as a worker because you have put in the effort of finding the customer yourself. Therefore, any profits from contract work belong to the contractor.
What is a Subcontractor?
A subcontractor is a type of contractor. Subcontractors also work on a contractual basis, and they also offer a particular set of skills which they perform for customers. The key point about subcontractors is that they form agreements with the contractor, not with the customer. Subcontractors often specialize in one specific area of construction and try to network with contractors who negotiate for larger jobs that include this area of specialty. In this way, a successful subcontractor will always have work, thanks to their network of contractors.