Thinking of building or renovating your dental office but don't know how to actually get building? After planning and financials, another potential hurdle we see dentists face when embarking on building or renovating a dental practice is the necessary step of finding, vetting, and hiring a general contractor (GC) to perform the physical construction. In this article, we’ll outline some of the more important considerations and steps you should take when embarking on this phase of your dental office project.
Before we begin with the criteria and characteristics required of a good GC let’s first explain what a GC does, why we need one, and why we can’t just round up our college buddies, get a few cases of beer and 100 trips to Home Depot later have a dental office up and running.
What is a General Contractor?
A GC is a professional title held by individuals (or business entities) in the construction industry responsible for overseeing a construction project. Like practicing dentistry, most states require that contractors engaging in significant construction projects (those requiring building permits) be licensed and insured. To obtain these licenses these professionals often need to pass a state-issued examination, have a few thousand hours of relevant training & experience, and remain in good standing with their regulatory body, Including completing required continuing education as well as maintaining adequate insurance.
In states without specific GC licensing requirements (Vermont for example) individual municipalities can legislate the need for licenses at the trade level such as for electrical and plumbing work. Even in these cases, there will still be a GC who is responsible for hiring these subcontractors and coordinating the overall project.
Procore – a valuable construction management software – has a comprehensive list of contractor requirements by state. Check this first to see what’s necessary in your state.
What does a General Contractor do?
There’s an awful lot that goes into this. But in short, they build the building and perform all the necessary tasks around building the building, including but not limited to;
- Engaging with the client and designers regarding design considerations
- Performing various surveys and measurements of the current conditions
- Verifying build-ability and feasibility of projects
- Providing the owner and lender with construction costs and estimates
- Hiring and coordinating all subcontractors and tradesmen needed
- Purchasing all materials, equipment and machinery
- Pulling building permits and schedules pertinent inspections
- Is obligated to perform all said work within the context and framework of the contract
Why do I need a General Contractor?
In most states and municipalities, you’re legally required to use a GC to build anything, whether it’s a dental office or a bike shed. If it requires building permits, it usually requires a contractor.
Now it’s not the purpose of this article to debate what types of projects should and should not require building permits, but just know that almost ANY amount of construction inside of a commercial building, legally, requires permits. From adding light fixtures to moving a wall, literally anything that “constructs, reconstructs, alters, repairs, removes or demolishes a building, structure or portion thereof” will require a building permit.
Please note that attempting to avoid or circumvent this requirement is a crime in most jurisdictions punishable by fines and/or imprisonment, as well as possibly having to demolish any work done not under a permit and being forced to start over. Not to mention that if anything ever goes wrong during construction, if proper permits and licenses are not available, insurance companies will absolutely deny responsibility and leave the owner 100% liable for rectifying the matter.
How do I find a General Contractor?
Before we hire them, first we have to find them, and there’s a few different methods that have proven successful in the past to find potential contractors to build your next office we’ll just list a few of the more common ones;
1) Ask Colleagues. Odds are, you’re not the only dentist in your area to build a dental office, every other office at some point, had to hire a contractor to build or renovate their current spaces. Check with any friends, mentors, fellowship brethren and any other dentists in your area that might have a recommendation.
If you can’t find anyone in your circle that knows of someone you can try popular web forums like those on Dental Town, which has its own Office Design & Construction section or Facebook Groups like Nifty Thrifty Dentists or Making of a Dental Startup to see if there’s anyone in your state that might have a recommendation.
2) Google Search. Since the turn of the millennium, the internet of course is the best source for information we currently have at our disposal. Likewise, companies that realize this, have spent significant time and money on establishing a “web presence” to help potential prospects find them. While simply typing “General contractor in my area” will yield a list of candidates, digging further into a few specific areas will help separate the wheat from the chafe.
Website. How does their website look? Is it modern? Fresh? Loads quickly? Does it have a good portfolio section? Does it have FAQ’s or Meet the Team sections? Or does it look like it was made 25 years ago on a free web builder? There’s no reason a well-established successful contractor can’t have a halfway decent website, be leery of those that don’t.
Unsolicited Reviews. As in, the ones NOT on their own website. If they’ve done more than a handful of projects, odds are people have started leaving Google Reviews. Check them out and see what other people are saying, are they good, bad? Does the company itself respond when warranted?
Social media. While not as indicative to performance as a good website, it’s helpful to check their social media presence, if any. A simple, clean Facebook page with relevant posts, or a LinkedIn page listing their accolades or maybe they even have a YouTube channel where they post videos of projects are all signs of a company that cares about their reputation and delivering value to the potential customer. Consider this a “nice-to-have”.
3) In Network Referrals. This one is the toughest to advocate for as it’s the category we, Design Ergonomics, would fall under, but it can also be one of the more dubious sources of contractor referral. In every community, synergistic businesses will keep a short (or long) list of referrals of people they would recommend to their clients for various needs. Realtors are notorious for this, need a plumber? Ask your realtor. Someone to paint a bedroom? Realtor. A daycare to put the kids in so you can make your closing appointment, if your realtor doesn’t have one, they’ll find one!
Likewise, even in the niche segment of construction that deals with dental offices, most established organizations will have a recommendation for another party member. Your supply rep might know a contractor, who knows an architect, who knows a financier, who knows an IT guy, who knows a cabinet guy, who knows a guy, etc. etc.
Sometimes, these various partners will have “backdoor” referral agreements with each other where they will pay, incentivize, spiff, bribe, whatever you want to call it, the originating source of the referral. In other words, they may be making recommendations based on personal motives as opposed to exclusively focusing on what’s best for you the client.
This can be a difficult scenario to sniff out and get to the bottom of, but just know that anyone WITHOUT a financial reason for doing so, won’t have a particularly strong opinion on who you use. Their recommendation should always come as more of a suggestion and never a mandate or obligation.
We at Design Ergonomics DON’T DO THIS, we have no financial arrangements or agreements with any of our construction industry partners or recommendations. At most we get a nice Chocolate Gift Basket at Christmas time. (Which we very much appreciate, please do not stop sending the chocolate.) What we do instead is we only recommend people that we have had at least one successful project with. And since we work all across the US and Canada, we won’t always have someone that meets these criteria in every municipality. If not, we are still happy to help vet potential candidates for our clients and we always review bids and construction estimates for free when asked.
How to Vet a General Contractor
Look up their license # and check the Better Business Bureau. Most states with the requirement of licensure for contractors will have a contractor registration online portal where you can enter a contractor’s license # and see if there are any past issues, suspensions or administrative actions.
Additionally, the BBB performs a similar public service using the company name. Please note that individuals looking to bury past performance issues can always recreate their business entity or get a new license # under a new individual and sidestep this query. Be wary of businesses/individuals who have little to no history of business activities in your given area.
Ask for references and actually call them. Most contractors will be happy to provide a list of previous clients who can share their experiences with you. Do however ask for references that are relatively similar to the project you’re undertaking, another dentist would be ideal but definitely former commercial clients, those who have developed similar sized projects would be beneficial. There’s little to no value however in talking to someone who used them to build an expansion on their house or remodel their kitchen.
Go visit and look at their previous work. Calling folks and looking at portfolio images is great, but nothing beats seeing it in person. We learned this long ago in our Dental Office Designs and is one of the main reasons we offer Spotlight Clients instead of Showrooms, so you can actually see it in action, 100 or 1,000 days removed from Grand Opening. How are the construction methods holding up to the test of time? How does the front desk look? Lighting fixtures? Doors and windows? How’s the HVAC system? Any plumbing or electrical issues? Don’t worry so much about high traffic wear and tear items like flooring, furniture and countertops, those do and will get beat up over time, but the bones of the building should still be in good condition 5,10 or even 20 years later.
Evaluate their bidding process. Ask them how they bid on projects, what information do they need and to what level of accuracy do they offer on various levels of bids. We know that a bid on a floor plan might differ from the final construction estimate based off a 30-page permit plan set. But why and how will they differ? (Hint: material selections, mechanical systems, plumbing and lighting fixture selections, etc. will all help nail down a construction estimate but these items likely won’t be known when you’re just trying to get an idea of costs for a potential project) Do they have a formula? Can they share it? What sort of allowances are they providing for which areas? How are these allowances determined?
Have an attorney review the contract. We’ve seen some interesting construction contracts in our 25+ years of experience. From 1 pagers that say little more than “Dental office for $2M Sign here.” to 20+ page legal dissertations. Contractors typically write contracts to protect themselves, just like you should never sign the first draft of a lease provided by a landlord, you shouldn’t sign the first contract provided by a contractor. Have an attorney review it, have us review it and make sure that you are also protected in the areas that are most important to you, usually the areas involving money. How are they paid, how is performance calculated, how are change orders or price overages handled, what happens if they finish early, what happens if they run over time, how are disputes settled, etc. Unfortunately, a good contract (or should I say a bad one) can be worth millions of dollars in the end and it’s imperative that this critical step be scrutinized by people whom you’ve retained to protect your interests.
Assess their subcontractor relationships. What subs do they use? Do they use the same subs on every job? Do they have a small pool from which they draw from? Do they sit outside Home Depot looking for trades people? And do said subs have experience with dental? You can hire the best GC in the world but if the plumbing sub doing your in-slab work got his license yesterday, he might not know why it’s important the vacuum line does not have any 90-degree bends in it. It’s worth asking who they use, why they use them and what kind of supervision will be in place.
P.S. Every GC, in the contract, should have a description of project supervision. Who is ultimately the person on the ground, who will be at the job site every day, representing the GC and coordinating the work to be performed. These folks typically hold titles of Foreman, Construction Manager, Project Manager, Site Supervisor, etc. and will be direct employees of the GC if not the GC themselves. Know who this person is as they will most likely be your #1 point of contact throughout the process. This person needs to be levelheaded, accommodating and reachable. Make sure you know who this person will be prior to signing any contracts.
What NOT to do when hiring a contractor and building a dental office
In 25+ years of working with dentists and contractors building offices we felt it would also be useful to give you some tips on pitfalls to avoid when working with contractors. Here’s a few of the notable ones.
Don’t hire a contractor outside your market area.
There are a few “national” construction companies out there and some of them are good (ask us which ones) but some of them are not. Some are little more than “construction brokers” who basically do exactly what we’ve outlined here and tack on a 20%+ fee. Construction management, owner advocacy and site supervision are all important and you may wish to hire a dedicated professional to this task but just be careful when hiring national/super regional companies. Some local building departments are also leery of “big city developers” working in their small towns and will give these folks extra hurdles to jump through. When possible, try to keep the business within a 50 mile radius and look for people familiar with the building department, the inspectors and local norms and customs.
Don’t hire a contractor with little or no dental/medical experience.
We feel bad writing this sentence simply because everyone started somewhere and a new, up and coming, motivated contractor might actually do a great job at a reasonable rate to secure the project and get some portfolio work under their belt. But if we had to pick a horse, we would always err on the side of someone “who’s been there and done that”. Permitting delays, subcontractor issues, inspection questions, coordinating the various pieces, we just leave a little too much room for error when working with someone inexperienced. A dental office can produce anywhere from $5,000 to $25,000 per day or more. A 3 month delay in opening is a lost opportunity cost that is not worth risking.
Don’t avoid the construction site.
Visit the site, talk to the subs (don’t badger them) but just let them know you’re around and paying attention. Most tradesmen actually enjoy what they do and would love to show you, the owner, their craftsmanship. And the opposite is true, workers who avoid you like the plague are a potential cause for concern. Don’t be afraid to visit the site, at least once a week or bi-weekly and just take some photos. A montage of progress shots from the same angle actually make for great promotional/marketing material when you open your office. Don’t be afraid to get in there and look around.
Don’t pay for anything yourself.
This item comes from a hard learned experience we’ve seen a very SMALL percentage of our clients face. But let’s just say that you should not be paying for anything personally when it comes to a significant construction project, almost every bill should be paid out of the loan package established with your financier. Many financiers will even have specific review processes that the contractor will need to meet in order to receive payment, this is done to protect you. In the event of a failure to perform by the GC, the bank will be the one who will handle back payments, nonpayments and potential litigation. Whereas if you pay the contractor directly, say $500k, and they fail to deliver, the onus falls on you to litigate and recover your funds.
Don’t hire friends and family.
Not entirely dissimilar to the above items but we’ve just seen too many times that hiring a friend or relative just doesn’t work out the way you’d want it to. If problems arise, especially involving money, these relationships are usually destroyed. What seemed like a “good deal” quickly becomes a massive problem, the project gets put on hold indefinitely, hundreds of thousands of dollars end up in limbo, lease and purchase agreements are violated and the burden almost always lands on one person, you. Keeping the relationship 100% professional, with proper contracts, roles and processes is the best way to ensure a successful outcome.
Ready to start your dental office project? Reach out to us for help vetting your contractor or to review your project plans. If you have more questions about hiring a general contractor, feel free to check out my book: Dental Office Start-Up Guide: Your Key to Practice Success for a complete reference to every step of building a new practice.
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