Contract Labor - Pros/Cons

[James]

I just purchased 20 MTD Toro 22" self propelled commercial mowers last month. So far I have lined up 110 accounts for an average of $26.50 a lawn. Found more than enough HS kids who want to mow and make a % of each lawn they cut. Bonuses to the "over achievers" including referals and customer satisfaction. Each mower is bonded for the cost of the mower and insured. Hired one field supervisor to oversee the action.

[Stonehenge]

Very bold move. I applaud the cajones it's got to take to try that. How do you measure customer satisfaction for bonuses? Also, do you tie customer satisfaction to their percentage (ie. if they do a poor job and get complaints, do you dock them)?<p>Can you tell I'm curious? One more thing...What kind of paperwork do you have to do so your state sees them as independent contractors, and not employees?

[cjcland]

i would like to know how you got 110 yards thats incredable, please let me know i am seeking to add another 30 thats all<p>----------<br>CJC Landscape Management<br>Winter Haven, Florida

[James]

Stonehenge, the commision is based on the field supervisors and the customers feedback. The contract for my operators was written by an attorney and includes provisions for &quot;poor&quot; work, conduct,etc. Each operator makes a base rate but must meet the field supervisors minimum approval to continue contracting.

[James]

cjcland, I went door to door in a middle to high income residential. I explained my plan and drafted a flyer that explained the plan in detail. The kids that I contracted got about 40% of them for me so they will be making &quot;extra&quot;. I'm getting lots of calls asking for more info as well and I hope to turn those into customers. It helps to have a good supply of HS kids eager to make money for the summer.

[lawrence stone]

James wrote:<p>&gt;I just purchased 20 MTD Toro 22&quot; self propelled commercial mowers last month. So far I have lined up 110 accounts for an average of $26.50 a lawn. <p>What almost $3k gross per cycle ($75k yearly<br>gross at 25 cycles) you could<br>have bought some &quot;real' lawnmowers. A two<br>man crew sould be able to handle those<br>110 small accounts with the right equipment.

[Charles]

What do the Kids need you for? They could just hand out flyers themselves or run and ad in the paper. Buy themselves a little push mower. And keep all the money. Like I use to do back in school. This what they must mean when they say our schools are &quot;dumming down&quot; :)

[James]

Charles,The kids needed someone to &quot;front&quot; the money for the mowers and basically do the front and back end customer service part. All of them liked the &quot;no-hassle-show-me-where-to-mow&quot; approach<p>Lawrence, I'm sure you are right about a good two man crew. The one thing my service provides is earned money to these kids for the summer. The 110 accounts was accomplished in two weeks time. Referals and bonuses make this attractive to this labor pool.

[GroundKprs]

Really good idea, James. I'd like to live in your area where you can count on HS kids doing real work! Is each operator given a machine; and who transports them, or are jobs compact enuf that each can operate near his home? <p>----------<br>Jim<br>North central Indiana<p>

[James]

GroundKprs, Each one is responsible for their own transportation. All but three live in the areas that I signed up. As a side note the field supervisor also checks the condition of the mowers on a regular basis to ensure proper care of &quot;their&quot; machine.

[MJM Landscaping Inc]

What happens when they return to school?

[James]

MJM Landscaping, Some will continue to work after school based on their available time. After that any person working a FT job looking for extra $ will be contracted. I met with several HR managers at local businesses that have allowed me to post flyers onsite. I'm getting tons of calls and as each &quot;area&quot; opens up I will sign them on.

[steven Bousquet]

what will you do when one of these high-end accounts has a plant need,like scale on the euonymus, or their betula pendula gets leaf miner? just examples. what if the lawn gets brown patch? Who mows when the kid doesn't show up? who mows in the fall? who cleans the leaves? just wondering?

[Charles]

This has been tried in our area by 2 companies that I know of. Both went bankrupt after a few years. These companies got very large under cutting everyone. I got alot of their work after they were let go by customers. On one of the yards The customer let the kids use her pool everytime they came and they spent half the day there. I heard that employees did shoddy work and most of the time didnt show up at all. I can just tell you that these owners thought they had a great idea at the time but both went bankrupt. One of them used college Kids and did a little bit of everything like landscaping. I get alot of jobs from people who wanted to save money by letting the neighborhood kid do their yards. You are not the first person to think of this and definitly not the last.

[James]

Charles, thanks for your opinions on this. Can you explain in more detail why these others failed? I sure hope I wasn't the first nor the last to be creative in the business world. I will keep you posted

[gene gls]

James: Be prepaired to start mowing when it gets hot and half of your crew decides they don't like to sweat and head for the AC jobs,even for lower wages.

[Charles]

I think because this is hard work. To do a volume business. Young people can find easier jobs elsewhere. The heat and humidity and all the weedeating. Day in and day out. The monotony and boredom. Most young people need constant supervision and motivation. Customer will not put up with too many slack jobs. Even if they are saving money. Most of us have to do this work to perfection or we get complaints. I don't know all the reason those companies failed. They just did and not by choice.

[James]

Again, thanks for the input. I will post regular updates for the forum so other people can benefit from my experiences.

[Nilsson Associates]

James .. where do you see the &quot;upside&quot; to all this? Just the mow/blow/go and let other landscapers take care of the rest?<br>Certain parts of the plan have merit, are you figuring on covering the &quot;no shows&quot; with the remainder of the crew? And what marketing did you use to get those initial<br>110 accounts?<p>And to Steve Bousquet ... how are you?<p>Phil Nilsson

[thelawnguy]

There's a guy who lives near me who does the same thing but with house-painting-calls himself Collegiate Painting or something like that. Drops off a couple school kids during the summer with a ladder brushes and paint, he does well enough so he doesnt have to worry about income thru the winter. Plenty of kids ready to make 10 an hour when they want to work and catch some rays to boot. Same type of thing with driveway sealing, the kids work from the back of their car he pays em 20 an hour plus car allowance to dump sealer on drives and grosses 250 for a 50x8 drive not bad.<p>Let us know how the mowing thing turns out. I too want to know what happens when sept hits, or during the 95 degree heat wave when they say screw this and decide to hit the beach. At least with paint and driveways its more or less a one-shot deal so if they scrw up oh well.<p>Bill

[lawrence stone]

It's obvious that this is an amusing troll<br>for why would any businessman that developed<br>a $75K gross sales a year biz would even<br>think of using teenagers.<p>Those 110? accounts managed correctly could<br>return $25k yearly to the owner of the biz.

[James]

I have noticed most everyone has a negative attitude towards high school kids. Around here the labor pool is so tight that kids getting a job like this is gold to them. The work ethic is also very high. Granted, I will find a few bad apples occasionally, but I do not see this as large problem in my area. I spent the weekend solicting more accounts and was able to secure 33 more lawns. My goal is to hit 200 for this first year and work from there. James

[Scraper]

And where might this market be? I am in a large metro area in the Northeast and teenagers are not really an option...especially when they go back to school in the fall just as the leaves start to fall. What then? I really find it hard to believe that you'll be able to provide quality fall cleanups for all 200 properties. Not to mention without the equipment to haul away all the cleanup (i.e. trucks, trailers, etc...) Not to bash, just don't see how it is possible....

[Charles]

Go to any fast food place and see how many times the kids get your order right out of 10 times visited.&quot; I SAID NO CHEESE!!!!&quot;

[lbmd1]

Sorry,<br> But I don't buy this one. 143 accounts in one year? Door to door, 33 in one weekend? Contract Labor? If these kids use your mowers, they are not contract labor. If they get hurt or hurt somebody, what then? How much is your workmens comp on all these kids? How do these kids get to and from accounts with their mower, gas, weed trimmers, blowers? This sounds like a plan from Grassboy!

[nlminc]

LOL! :)

[Charles]

That is right if they use your equipment. They are considered employees not contract labor. And that definitly increases your liability. And you may have to offer them health insurance etc.

[James]

Folks believe what you want too. Do you think it is that hard to spend two 10 hour days drumming up business? People are sold on the fact they can get there lawns mowed for cheaper than a &quot;full service&quot; lawn care while helping out kids preparing for college. 145 accounts to a full service lawncare company is quite different from what I'm doing. Charles, contract labor is based on the &quot;contract&quot; not the equipment. James

[Charles]

Lbmdl look that contract stuff up for us. I don't have my lawyer handy:) I was thinking of an independent contractor James. When they are usng your equipment they are no longer independent. They become employees. The laws may have changed. I don't know. This seems to be a question for Phil. Anyway our town is changing to a all year around schooling. So we won't have to worry about beavis and butteheads of the world running around for much longer:)

[Stonehenge]

Student Painters is one of the larger organizations in the country. They do fine with all summer help. In fact, the foremen are also students. This business certainly presents seasonal challenges that painting doesn't, but I don't know if they're insurmountable.<p>James, I can give you an idea to get some additional part time labor. E-mail me if you're interested. It's worked pretty well for me, but it's an idea I share begrudgingly.

[lbmd1]

Charles,<br> My CPA says that the enforcement on 1099 contract laborers is being stepped up. They were laxed on who could be a contract laborer but as soon as employers began abusing it by avoiding their responsibilities in paying the payroll taxes, they are now looking it over more carefuly. It states that if you sub-contract out work to a person who provides his OWN tools, then that is a contract laborer. If YOU provide any tools to the sub-contractor, then he becomes an employee of yours and you can be held responsible. We have a degreed certified horticulturist that does fine pruning for some of our fussy clients. He carries his own tools, pruners, shears, etc., and he can be treated like a contract laborer because of this. We provide him with a 1099 at the end of the year. I'm no tax man, but I listen to my cpa and haven't been audited yet.

[Charles]

Thanks for the info lbdm1.

[Charles]

$26.50 x 40% = $10.60 kids will receive each yard. Lets say your yards average 1/2 acre.<br>Drive to and from yard, mow, blow, trim one yard. 2 hours average. $10.60 divided by 2 = $5.30 per hour avg. Provided they dont use their on auto to transport. Minimum wage is set to go over $6.00 soon. Minus expenses you will be making on average $10.00 per yard. I understand that some yards maybe smaller and some maybe larger. That why its hard to say definitly.<br>

[GrassMaster]

Hello Everybody:<p>This is a very easy business & lets don't make it anymore complicated than it is. The Big Boys (I.R.S.) do want you to pay taxes & they are going to keep it this way. They do not care how hard you work or what you do, just send them money. They need it for their retirement, hospitalization, sick leave & ect... Pay it or suffer the Rath of I.R.S.<p>If you are not a Multi Million Dollar Corp. why would you need to hire a C.P.A. or an Accountant except to do your taxes? <p>Please don't ask me because I know how to make money, I know what my expenses are & I don't need any body to explain much of anything to me, except to do my taxes because if I did my taxes, I would get back more than I pay in every year until I get audited or put in jail for income tax evasion!<p>It's not Rocket Science it's called Lawn Service, Lawn Maintenance or Landscaping Business very simple business. Anybody can do it & yes a lot fail, but they would fail at any thing else they do also!<p>Now the question is Contract Labor- Pros/Cons? <p>Well help is here, a lot of people have been burned bad by hiring so called Independent Contractors. If you like paying others taxes I suggest getting some Independent Contractors, because everybody says you can save money, well I don't think so.<p>+++++++++++++++++++++++++++++++++++++++++++++<br>Straight from the Big Boys! Common Law Test.<br> <br>Applying the Common Law test to determine whether a worker is an employee or an independent contractor basically consists of analyzing the level of control the employer exerts over the worker. The more control possessed by the employer (especially over the means of accomplishing a task rather than the end result), the more likely a worker is an employee. Control, in this instance, is defined as the level of legal right to direct rather than the level of direction actually provided. <p>The IRS uses a twenty question test to assess the level of control. (Most states, on the other hand, use a more stringent, three part test [ABC Test], to determine whether a worker is an employee.) Yes answers provide evidence of an employer - employee relationship. <p>(1) Is the worker required to follow the employers instructions in completing the job or accomplishing the task? <p>(2) Does the employer provide the training necessary for completion of the job? <p>(3) Are the workers specific personal services required for successful completion of the job? <p>(4) Are the workers services crucial to the success or continued existence of the company? <p>(5) Does the employer set work hours? <p>(6) Does the worker have a continuing relationship with the company? <p>(7) Does the employer hire, supervise, or pay any of the workers assistants? <p>(8) Is the worker precluded from seeking assignments with other companies or from refusing assignments offered by the employer? <p>(9) Does the employer specify the location where the work must be performed? <p>(10) Does the employer direct the order or sequence of tasks to be performed? <p>(11) Does the employer required regular progress reports? <p>(12) Is the worker paid by the hour, week, or month, rather than for the completion (or stage of completion) of the project? <p>(13) Does the worker work only for the employer? <p>(14) Does the employer pay business overhead and incidental expenses? <p>(15) Does the employer provide equipment, tools, and materials? <p>(16) Is the work performed on the employers premises or using the employers facilities? <p>(17) Are the workers services not available to the general public? <p>(18) Does the employer provide a minimum salary and therefore shield the worker from the risk of profit or loss on the job. <p>(19) Does the employer have the right to terminate the worker even if the job results are achieved? <p>(20) Is the employer required to pay the worker for time spent even if the job is not completed? <p>Answers to the above questions will help determine whether a worker is an independent contractor or an employee. Job title, designation as a contractor within the terms of the contract, or the actual degree of freedom enjoyed by the worker have no bearing on the level of legal control and therefore no weight in the determination of status.<br>+++++++++++++++++++++++++++++++++++++++++++++<p>The above is the best reason not to hire a Independent Contractor.<p>If you do not like to cut grass & want to make big money the fun way! Wash windows big money & you don't think you would like it. Lets make it fun. Hire college girls to wash windows for you they can get double what a guy could. Go figure. <p>The guy that washes our windows makes .50 a minute, he comes in shop with bucket & squeege only. <p>We pay him $15 for about 20 to 25 min. work, 1 time a month, he has over 200 accounts & he says we are one of the smallest. He drives a 1 year old Cadillac. <p>Think what you could make if you pay a college girl $1 over min wage, lets say 2 of them & they wore cut off overhauls. You think of the uniform that would make them be noticed. <p>If you live in a big enough place, think of your income if you had 10 or 15 working for you. Not very much overhead.Go figure!<p>Hey, I was just kidding, but I love to think about it. I think it would be a great business idea!<p>I loved cutting grass & one day I will do it again. <p>The grass is always greener on the other side of the hill!<p>----------<br>GrassMaster - Home: www.lawnservicing.com<br>My Start Up Page www.lawnservicing.com/startup/<p>

[Charles]

I often thought of that to Grassmaster. About the hiring the women with the cutoff jeans and the tank tops to work for me. But and the is a BIG BUTT. When the lady of the house catches her hubby checking out the babes... Its to the emergency room to pull the weedeater out of someones you know what:)

[GrassMaster]

LOL, Thank you Charles!<p>There's more than one way to SKIN a CAT! <p>If you give her enough spending money, diamonds, a new car every year & what ever else her heart desires. She will be happy! <p>Just ask any man that owns a Strip Club, resturant, all female office & so on. <p>If you don't believe them, ask almost any Doctor or Lawyer. <p>Just don't hire anyone as a Independent Contractor! <p>Because sooner or later you will pay Big Time!<p>----------<br>GrassMaster - Home: www.lawnservicing.com<br>My Start Up Page www.lawnservicing.com/startup/

[parkwest]

I once knew a contractor who thought he had figured it all out and claimed all of his workers as independent. The IRS eventually sent him a tax bill for over $75K. He had to sell off most of his equipment and his house to pay it.<p>The IRS wanted me to pay almost $50K in back taxes because some of the subs I had used had given bogus tax id #'s on my 1098 forms.<p>I don't understand why someone would not figure into your bids money to pay your taxes and avoid the risk of jail time and fines so your customer can get the job done cheaper.<p>The majority of them voted for these politicians who promise to take care of you if you give them all your money, so let your customer pay the tax.<br>

[Scraper]

Guido...thought I'd just bring another one up from the depths as I found this one just as funny as Grasboy's one. Haven't seen this guy since then either. Wonder how many of the 110 lawns he still has? :)

[BRL]

Scraper & others,<br>I thought this thread was fascinating so I sent the guy an E-mail asking him to return to the forum to give us an update. He replied to me & said I could post it, although, as you can read, it may be a little while before he responds. I told him good luck & I hope he doesn't get an audit because its pretty clear that he should be treating those &quot;contractors&quot; as employees.<p>Bill, Thanks for the e-mail. I just have not had a lot of spare time to keep<br>checking forums, e-mails, etc. Things have been going better than projected.<br>Now without its share of headaches of course but it definitley has boomed. I<br>myself had a run of bad luck being diagnosed with cancer. My youngest<br>brother is now working with me through the summer to help out. Here are some<br>highlights thus far:<p>237 residental accounts<br>16 comm accounts (so of my help wanted to team up and work in one place but<br>just have more to mow)<br>59 students, parttimers, etc are contracting with me to service the above<br>accounts.<br>I leased a 6,000 sq ft warehouse where we can store the mowers and/or<br>service them.<br>Toro is looking at doing an ad based on our success rate of using their<br>mowers. (Not one has failed to start thus far)<p>On the downside, we have to occasional flameout, but have recovered every<br>mower. Also, liabilty insurance has increased because they consider the<br>&quot;contractors&quot; non-experts in the field until they stay for at least one full<br>mowing season and then return next summer.<p>Aside that, the venture has been extremely successful. As the cliche says<br>&quot;Imitations are the sincerest forms of flattery&quot; There are at least three<br>other outfits in town gearing up to do the same thing. Well, sorry this is<br>short and sweet, feel free to post these results. Once I complete my second<br>cycle of chemo I will spend some time on the forum! Sincerely, James<p>