There are times when you will require the work of a contractor for your business. You may need to have someone else come in and do a part of your work. These are the days of specialized everything. The family doctor sends the patient to a specialist, the specialist sends the patient to as surgeon and so on. As in business, you are either the guy who oversees the project or you are the guy who has been contracted by the guy who oversees the contract to do a certain part of the job. For the sake of argument we will say the business is construction. The contractor is an every day event in this business.
The general contractor is the guy who oversees the entire project. He has limited knowledge of each part of the job, and his major area of expertise is making it all come together. He does this by contracting out certain parts of the work. If plumbing is needed, a plumber will be contracted to do his part of the job. The electrician will be contracted for the electrical work, right down to the plasterer and painter who will be contracted for their expertise. The general contractor has a crew of his own, who probably started the construction. Obviously everybody is getting their fee. The general contractor commands a fee, as well as each individual contractor. The general contractor can save money on the job as well as make more for himself is he has reliable people in his crew with at least a general knowledge of all parts of the construction. Maybe the painting and plastering part of the job is just a quick fix, something that can be done by a general contracting crew. By not calling in a separate contractor for this job and using his own crew, the general contractor has saved money for the client, as well as made some extra for himself.