General Contractor vs Subcontractor
General Contractor vs Subcontractor
General contractors and subcontractors play different but complementary roles in construction. A general contractor (GC) manages the overall project and coordinates all the trades, while a subcontractor (sub) specializes in a specific trade like electrical, plumbing, or framing. Understanding these roles helps you decide which path to pursue or how to work effectively with each.
Comparison Table
| Feature | General Contractor | Subcontractor |
|---|---|---|
| Scope of Work | Manages the entire project across all trades | Performs work in a specific trade or specialty |
| Client Relationship | Contracts directly with the property owner | Contracts with the GC, rarely directly with the owner |
| Licensing | General contractor license required in most states | Trade-specific license required (electrical, plumbing, etc.) |
| Liability | Responsible for the entire project including sub work | Responsible only for their specific trade work |
| Revenue Source | Markup on sub work plus self-performed work | Direct payment for trade work performed |
| Overhead | Higher; must manage office, estimating, coordination, and insurance for all trades | Lower; focused on one trade with fewer management requirements |
Key Differences
- →The GC is the single point of accountability to the owner for the entire project while subs are accountable to the GC for their trade.
- →GCs earn money by managing and coordinating work, not necessarily by performing physical labor themselves.
- →Subcontractors can work on multiple GC projects simultaneously while a GC typically manages each project through completion.
- →GCs carry more insurance (GL, often builders risk, higher limits) while subs carry trade-specific coverage.
- →The GC assumes schedule risk for the entire project while subs are only responsible for their portion.
When to Use General Contractor
- ✓You want to manage entire projects and coordinate multiple trades
- ✓You enjoy the business and management side of construction as much as the physical work
- ✓You want higher revenue potential through managing larger projects
- ✓You are willing to take on more risk and responsibility for higher returns
When to Use Subcontractor
- ✓You are an expert in a specific trade and want to focus on that craft
- ✓You prefer doing the physical work rather than managing paperwork and client relationships
- ✓You want lower overhead and simpler business operations
- ✓You are starting out and want to build expertise in one area before expanding
Common Confusions
- !Thinking a GC must know how to do every trade; a GC manages trades but does not need to be an expert plumber, electrician, and roofer.
- !Believing subcontractors work for the GC as employees; subs are independent businesses with their own licenses, insurance, and employees.
- !Assuming GCs always make more money than subs; highly skilled specialty subs in trades like electrical or HVAC can out-earn many GCs.
- !Thinking you need to choose one path permanently; many contractors start as subs and later get their GC license, or do both.
Apply These Concepts
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Common questions about this comparison
Yes. A licensed plumber, electrician, or other trade contractor can contract directly with a homeowner for work within their licensed trade. They are acting as a specialty prime contractor in that case. However, if the project requires multiple trades, a GC is usually needed to coordinate and manage the overall project.
GCs typically markup sub costs by 10-20%. This markup covers the cost of finding and vetting the sub, coordinating their schedule, managing their work quality, processing their payments, and being ultimately liable for their portion of the project. The markup is earned through management and risk assumption.
It depends on your state. In some states, a GC license allows you to perform or supervise all trades. In others, you need a separate trade license for any trade work you self-perform. Many GCs also hold trade licenses in their original specialty. Check your state licensing board for specific requirements.