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Local or National GC? Assessing the Pros and Cons for Startups

Local or National GC? Assessing the Pros and Cons for Startups

You’re a startup company (or have one in your portfolio) that is ready to scale and whether you are growing in a local market or expanding nationally you have a choice to make. Who do you hire to build your project—a local contractor or a national construction partner?

Here’s a look at the pros and cons of each as they relate to cost, quality and speed:

Going Local

Choosing a local general contractor comes with the obvious perks: assumed understanding of the market, local subcontractor pricing and familiarity with bureaucratic red tape. On the flip side, though, starting a new relationship with a contractor each time you venture out of familiar territories means you must build trust from square one, having the same conversation multiple times in order to gain aligned expectations. Ultimately, the right choice will depend on your own priorities for your project’s execution.

Pros:

  • Assumed understanding of the market
  • Existing subcontractor relationships
  • Proximity to the jobsite
  • Potentially more oversight from the company’s leadership team
  • Familiarity with jurisdictions having authority and related procedures

Cons:

  • If doing multiple sites, must re-educate each contractor for each new location
  • Requires more of your own internal systems to ensure consistency when working with a variety of GCs
  • Could be subject to artificially elevated local pricing in a hot market
  • Lack of long-lasting, invested partnership with the client

Partnering Nationally

A national contracting partner more often than not holds the upper hand when it comes to speed and consistent delivery quality, however this assumes that this partner has the tools and systems in place to offer these benefits. In most cases, if you have a lean team, a brand to maintain and a high-volume pipeline with fixed deadlines, a national partner will serve you better than attempting to manage different GC’s from market to market.

Pros:

  • Ability to scale faster
  • Only need to set expectations once
  • National perspective of costs to inform early budgets
  • Ability to combat elevated local pricing by bringing traveling subcontractors
  • Consistent team and point of contact
  • Experience working nationally allows for creative cost solutions to challenge the status quo

Cons:

  • May not have experience in every market you desire to build in
  • Might not have local relationships or familiarity with local procedures
  • May lack deeper connections with local subcontractor market

Conclusion

Ultimately, knowing how you prioritize speed, quality and cost will help you determine which route to go. If you’re looking to do one-off projects, and you have the internal infrastructure in place to manage multiple contractors, receiving local bids might be your best bet.

Alternatively, if you’re a startup that needs to scale fast with limited internal support, finding the right national partner could change the game for your construction pipeline. Just make sure to look for a track record of successful national partnerships and verify in-house capabilities to reap the benefits before you make the leap.

With a national design-build partner like ARCO/Murray, we offer clients front-to-end solutions, from due diligence through to completion, offering tailored and comprehensive design and construction services especially for businesses who need to move fast, ensure quality and make their proformas work.

Looking for the right design-build partner? Experience a better way to build: partnerwitharco@arcomurray.com