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Subcontractors - Is this a good deal for them?

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  • Subcontractors - Is this a good deal for them?

    I am looking to bring on a sub-contractor. I have ~18 accounts, maybe 2 days of mowing (8+ hours of blade spinning + travel). My schedule is just too busy to take on the accounts this year. I have had the customers for three years mostly. Have to turn down several each year because I'm too busy.

    I am going to offer 80% of the bill rate. For these accounts, the subs take would be ~$400. The sub invoices me monthly at the end, I pay at the end of the month, within 10 days or so.

    I handle the cash float, billing, sending in sales tax, any marketing, etc. The sub carries insurance, pays for damages, and handles all of the help. I also have insurance.

    Is this a good deal for the sub? Or will they think I'm taking too much?

    Any takers?

  • #2
    We are in a similar situation

    I'm a one man show with a full time job. My mowing business grew quickly this year due to word of mouth, flyers and newspaper ads. Once I approached 20 residential customers (and more calling for estimates)...I realized that I could not do these myself.

    I already used part time guys as needed, but they also had jobs during the week, so it was a rush to get all done each weekend...but what if it rains?

    So I invited my best part-time guy to come on full time as a subcontractor, and explained the "down sides" that apply for him (tax-wise). He'll run my mowing which frees me up to handle other stuff, including growing our customer base to 40 or so customers...then hiring him a helper.

    That's my intended path...

    Mort

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    • #3
      How/what are you gong to pay the subcontractor?

      I know I can get 100 accounts by the end of the summer, if I want. It pretty simple marketing from what I can see. I get a lot of leads that I don't even follow up on. I have a 90+% close rate on residentials. And I try to be in the upper end of the price range. $60+ per hour or better.

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      • #4
        edrenckh ... with that 90% close rate and hourly return, sounds like you have an untapped market ... suggest doing it in house with own employees and press on now for rapid growth. Focus primarily on sales and managing. Group the accounts into crew leader "batches" of responsibility of X number of customers.

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        • #5
          I would raise my prices, Ca Ching $$$$$...

          I get a lot of leads that I don't even follow up on. I have a 90+% close rate on residentials. And I try to be in the upper end of the price range. $60+ per hour or better.
          If your closing rates are that good, I would seriously consider raising my rates & hand picking my customers & work areas!

          I would go at least 10% to 20% more & keep an eye on your closing rates. Even at 50% closing rate thats real good!

          That 20% extra could easily help pay you a a nice salary!

          If you are good & get plenty of work, always charge as much as the market can bare & then some... People will pay for what they want.

          Anybody that can close 50% sales leads is one hell of a Salesperson!
          GrassMaster, LSF Administrator!
          LawnPro - Lawn Care Business Software:
          www.lawnbook.com --- www.lawnservicing.com

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          • #6
            Thanks for the advice!

            I have pared down my farthest accounts, I was driving 12 miles to two last year. Now mine are all within 5 miles of either my house or my rentals (2 duplexes). I could raise my prices, but I try to stay at the top of the market, but not go over. This year I raised most $3 or so. One I raised $7.

            I also have a full time job, make pretty good $$ at it. As long as they don't ship it overseas, I should be set for a while. Between that and the rentals, I don't have a lot more additional time.

            I may do the employee thing next year, or get a group of subs. I sub tree triming and fertilizer and have subbed a landscape job.

            Plenty of money to be made here and it's a good business. I have a good image, good equipment, and seem to be able to close the sales. I don't even have a sign on my truck anymore, I hate to turn down $$ but I get over committed.

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