View Full Version : Sub-contracting

03-19-2009, 01:50 PM
We are a new lawn care service company. A tree service company contacted us and wants us to perform services that they are not equipped for (aeration with our new z-plug). What kind of agreement should we expect? For a $95 job, what should we collect and what should the tree company collect? What kind of percentage is acceptable? Thanks for your help!

03-19-2009, 04:39 PM
Couple of questions:

1) Are they expecting you to cut your current prices or bid as usual?

2) Are bids to them, or the homeowner?

3) Are they going to mark up your prices?

4) Or, do they simply want a commission?

5) Is it all one time work, or repeatable/annual contract work?

Lot's of ways to approach this. If they are going to be a decent source of leads, I'd give them 10% on a non-contract job, and bid 5% above what I normally would charge. After all, they've done the marketing/selling.

In short, need a little more info to give a good answer.

03-19-2009, 05:08 PM
I think you should collect it all. Tell them thanks for the references and if you find any one that needs tree service you will send them their way. It is not like they have a lawn service business and all the equipment and are over booked. Sounds like they want to eat both sides of the cookie and the cream in the middle. Are they going to give you the same % for tree service jobs you send them? The problem is, at what point do you stop sending them a %, next year? the year after that? What if they go out of business next month? I have a lot of companys (some are LCOs) that I trade references with but not much comes from it. No one has ever asked me to subcontract with them and I wouldn't if they did. Just explain to them that you prefer to stay independent and make friends with them and every one you meet. Pass out lots of business cards. If some one asks you for a business card give them 3 and always ask them for theirs. I always ask a business person for their card when I meet them and tell them I will send business their way if I can.

03-19-2009, 06:48 PM
[QUOTE=Littleriver1;2864258]I think you should collect it all. QUOTE]

they would stop subbing you or sending you clients then. especially if the trade isnt equal. if they are subbing you and you qoute 90, they should be charging 100 to their customer, if they arent, they are ******ed.

03-19-2009, 07:05 PM
make it simple...figure on what you want to make and then add their commision to it. That way it is coming out of the customers pocket and not yours. This work is work you wouldn't have been able to attain, so bid it like you don't need it. (unless you are that desperate)

I would try for 10% commission to the tree service. That way if you are doing a 100.00 job you would only be raising the price to 110.00 due to commission. Someone who paid 3000.00 to have trees taken down won't care about an extra ten dollars.

mr mow
03-19-2009, 07:21 PM
"Someone who paid 3000.00 to have trees taken down won't care about an extra ten dollars."

Think you mean $300. 10% of 3000 = 300

Land of Lakes Lawncare
03-19-2009, 07:34 PM
"Someone who paid 3000.00 to have trees taken down won't care about an extra ten dollars."

Think you mean $300. 10% of 3000 = 300

I think he meant that the client that paid $3000 for tree services wont care if you add $10 to the quote to get their lawn aerated.

03-19-2009, 08:10 PM
What I meant is what I typed.

If the tree service goes and performs a 3000.00 project and the client wants grass seed where the old trees are and it cost 100.00 for the landscape company to come in to do it (fictional numbers of course, so don't jump on me for that), I do not believe the 10% for YOUR LANDSCAPING SERVICES, which would equal ten dollars would break a deal.

That's what I meant by the above message.

03-19-2009, 08:28 PM
We do this with tree companies (4 of them). We give them our "going rate" they mark it up, it's net 10days (I guarantee you they're getting paid immediately upon completion of the work or their fools.)

If I refer a customer to a tree service, I get 10%. I have no idea if they mark up their prices or not. I get a copy of the customers invoice with the check (they're my customer... the tree guys aren't stupid enough to fake an inovice because they know I'll ask the customer what they got charged to remove the trees.)

Same with hardscaping we don't do it but once in awhile a customer will ask for a recommendation. I have 2 guys I work with, I give them both names and numbers.

After a hurricane I often make 12-15 grand on referral fees.

mr mow
03-19-2009, 11:11 PM
Sorry, Was jumping on anyone, knew I shouldn't have said anything. People can be a little touchy, mean't nothing by it, guess I was confused by what you were trying to say. sorry : )

03-19-2009, 11:30 PM
Thanks everyone for your advice/input on the matter. It complicates it a bit more that this person who owns the tree company is also a friend, however, i am not going to give away all of the profit. Since we are a new company this year and have some major purchases this first year (8 X 21 enclosed trailer, new Z-plug, Z820A mower, etc.) I do need to drum up some business just to get my name out there. We are offering 15% to the Tree company, which also does lawns and has approx. 25-30 regular customers for lawn service, to get some "buzz" going around our community about our new company. My hope is that when I pull up to a customer's house with my new 8 X 21 enclosed trailer with our logo across the side of it and on our equipment, it will get the neighbors talking and drum up some more business.

03-19-2009, 11:58 PM
It's nice to go out and get all that new equipment, but do you really need that size trailer at the start. I mean, hopefully you just paid for it and are not financing it. To me, I'd take the large sum of money and advertise or pay for door hangers and start hoofing it door to door for starters.