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Old 12-16-2012, 02:16 PM
sgbotsford sgbotsford is offline
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Join Date: Aug 2012
Location: Alberta, Canada
Posts: 102
I've tried with piece work here at the tree farm. I don't like the results. They do the job to the minimum possible standard. I pay by the hour, pay 10% over what they can get pumping gas, and have a relaxed attitude about things that don't matter. (E.g. if they want to weed wearing just running shorts, I don't care. If they are working on their own, they can play their music. If they can't show because of football practice, and they phone me, no biggie.)

You are better off to run a semi-franchise, I think.

Step 1. You have them as your assistant. You both take both roles until you are comfortable that he is competent.

Step 2. You put him on his own working solo, using your equipment. From previous experience with the yard, you pay him a percentage of the contract. The percentage is X% at the beginning. Initially you check up the job at the end of the day, ideally with him.

Step 3. You give him an assistant. The assistant is payed a wage, but you handle that, but the wage comes out of your guy's percentage. Lot of guys will like this setup, because they have the work, but none of the paperwork.

Step 4. You give your guy the opportunity to buy into the company. He gets a larger percentage of the contract. He can start getting his own contracts. As a tier 3 partner he rents his equipment from you. You handle all his bookkeeping, collections, and payroll. This is the level you want most of your team. They have incentive to do the job right. You make money on the equipment rental.

Step 5. As a tier 2 partner, he owns most of his own equipment, but still can rent from you. E.g. He rents from you while his mower is in the shop. You negotiate with the shop for him. Moving him to to tier 2 means he has more incentive to take care of the equipment, and take a larger cut.

Step 6. As a tier 1 partner, he shares in the profit of the enterprise, but also bears the costs. Adding a new tier 1 partner will likely be two companies merging, or it will mean a guy buying into the company with a hefty lump. This is also how you handle the transition when you want to retire.
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