Commission

Discussion in 'Lawn Mowing' started by rixtag, Jan 16, 2003.

  1. rixtag

    rixtag LawnSite Senior Member
    from Lehi Ut
    Posts: 280

    Last year was a less than favorable year for my business. In May my complete setup was stolen. It took a while to get everything back and by the time I did it was too late to get any accounts. My wife and I purchased our first home and to help with that purchase I sold all but my 36 exmark and some small handheld equipment. I am giving this info so that my question makes more sense.

    Forward to January 2003. It's time that I start to contact some properties that I lost bids on last year to bid again and I am not set up to do the work yet.

    Until I can get my setup back together and do the work myself, it may take all season, a friend of mine has a lco and we have talked about my continuing to make the sales and he doing the labor.

    My question is this: How would you all approach something like this? Would I be paid on a percentage of the total contract or would it be a one time fee? Would I take a percentage of the monthly or would it be based on involvement? I want to be fair. I have exchanged services with him in the past but neither wants a partnership. We also don't want to take advantage of the other. What ideas do you all have about this?
     
  2. FrankenScagMachines

    FrankenScagMachines LawnSite Platinum Member
    from IN
    Posts: 4,739

    I'm kind of semi-curious about the same thing, a friend of mine locally used to use only 21" mowers and primarily bagging. They do good work, and recently another LCO gave them a 48" Scag hydro w/b in exchange for them tending to some of his accounts. Then later, that LCO gave them alot of accounts (50 were available, I think they only took 30-ish) and now they are trying to grow it into full time, and I don't really want to use a push mower and bag a lawn, but I was thinking, maybe I could sub out lawns to them if a customer insists I bag with a 21", then I would still do the side jobs for that customer and still be in control. These guys do quality work and charge on the high end of the scale, they're no scrubs. Also they're thinking about a Z rider and I was thinking also sub them work I do not want to do due to size of job and my equipment. Then that way after I grow enough and get a larger mower, I can take the job over. This is probably a dumb idea one I probly wont' do because I need the money and all, but I was thinking that it could be an interesting concept, two different sized companies helping each other like that?
    Just some thoughts...
    Eric
     
  3. walker-talker

    walker-talker LawnSite Platinum Member
    from Midwest
    Posts: 4,771

    I am going to do something like that this summer. I have a lawn that I charge $35 to mow, but it only take me about 12 minutes. I told a LCO friiend he could mow it for $20 if he wants and bill me. I make $60 a month for doing nothing. It's on the other side of town and worth losing $20 a week not to hassle driving there.

    MATT
     
  4. bubble boy

    bubble boy LawnSite Bronze Member
    Posts: 1,020

    i guess treat him as a sub? will he go for it?

    get a non compete. this situation could get ugly fast.

    maybe wait until you can service these properties before opening up again. it's tough to sit "on your hands" but i think the situation could get confusing.

    if you do go thru with it, a % seems fair to both. BUT if i were you maybe a one time fee better, get your money up front (not so fair to him but oh well). just get a good finders fee.
     
  5. michael68

    michael68 LawnSite Member
    Posts: 11

    i would definitely get a non-compete agreement with him and make sure that I was the person talking with the property owners so that there was a minimal chance of him taking over my own accounts. Would also take a percentage each month including a small finders fee up front from him for good faith. You do not want to be stuck holding the bag when he doesn't show up th do the work one day. This makes it worth it to him to show up and do the work because he has money invested in it. As soon as possible, get back on your feet and handle "your" business. Just make sure that there are no misunderstandings. If you feel you cannot talk to him about a certain item of concern, no matter how big or small, come up with a new plan. I am speaking from experience. Friends are friends but business is business. Remember this, Whatever happens, in any case, ask yourself if you can live it? good luck......hope you work it out and get back out there!
     
  6. danp

    danp LawnSite Member
    Posts: 30

    I think a couple of the others here have it right. Get a non-compete for the account list, and write up a subcontract for the work. Be sure you outline the details of who is responsible for what, and waht happens if someone does not fullfill thier end. Be sure to keep an eye on his work so that you are sure it meets your standards. I would set it up on a commission basis, and collect monthly and pay the sub yourself. This way you maintian the contact and are sure to be paid.
     
  7. Gravely_Man

    Gravely_Man LawnSite Silver Member
    Posts: 2,076

    I would second the recommendation for lojack. That is what the company does. This should also give you a discount on insurance. The real key is to go with what Kirby has suggested. Anything and everything you can do to prevent the trailer from getting stolen in the first place is well worth it.


    Gravely_Man
     
  8. rixtag

    rixtag LawnSite Senior Member
    from Lehi Ut
    Posts: 280

    As these are props that neither of us have had, I would be looking at it as though I was the outside sales rep. When I get enough equipment to do the prop it would be decided beforehand whether I would take it from there or he would continue.
    As far as the managers are concerned it would still be the same lco just different crews.
    As for a no compete clause I understand the reasons there.

    What would be a fair percentage monthly for let's say a $700.00 prop? I am looking for some dollar figures from you all because you are impartial in this case.

    P.S. Gravely-Man. I am thinkin' that was meant for another thread?:D
     
  9. danp

    danp LawnSite Member
    Posts: 30

    Rixtag,

    I think you need to be sure and set up all the details of customer transition prior to landing the customer so that there is no misunderstanding when the time comes.

    10% is fairly common in many industries

    D
     

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