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Future Employees???

Discussion in 'Lawn Mowing' started by LoneStarLawn, Nov 29, 2000.

  1. LoneStarLawn

    LoneStarLawn LawnSite Bronze Member
    Posts: 1,415

    My partner had an idea which I didn't like about future hiring of employees. He had stated that I could save us money if we subcontract the work, paying the taxes(workman's comp), supplying the equipment, but the sub supplies vehicle. He wants to do this to avoid the costs of vehicles on our part but the auto insurance as well. He wants to give them an amount per job, instead of an hourly rate.

    Any suggestions....I don't like the idea but am looking on suggestions on why this won't work or someone to change my mind on how this will work.

    Thanks in advance.
  2. 65hoss

    65hoss LawnSite Fanatic
    Posts: 6,360

    This is an idea that I've been looking into. In a recent article I think in the Lesco newsletter, there is a guy in middle TN that has been doing that. He supplies the work and the equip and the employee supplies the truck.

    The employee gets paid on the amount of work he does. After expenses 50%. This insures that he performs quality work, because if he goes back out there to correct something it is on his time. Also, since he gets 50% AFTER expenses, he will be very careful with your equipment, because that all adds into his bottom line. End of the year, he does 80,000 after expenses you made 40,000 and didn't have to get very involved in the day to day.

    In some ways you loose some control over your name. These guys would be very similar to working for themselves. It wouldn't be subcontracted work, so you would have to carry all insurances, taxes, and other types of paperwork.

    Your only job would be to find new business and keep putting crews out on the streets to make you money. Is this a great idea? I don't know yet. I still haven't decided to take this approach. You would still need to find this guy a hourly helper, that would be the only way to do enough work to make it worth you time. Then you still have the old labor problem.
  3. Lanelle

    Lanelle LawnSite Bronze Member
    Posts: 1,361

    How long before the guy with the truck decides that he wants to make all of the money, cutting you out of the picture? Seems like you would be vulnerable to losing these customers to the guy who is actually doing the work. If he can figure out how to get through the route, working for you, he may decide that he is smart enough to go buy a mower and compete.
  4. jaclawn

    jaclawn LawnSite Senior Member
    Posts: 490

    It is a good idea in theory, but I doubt that it would work well. Granted, in the right area, with the right people and right contitions it may fly.

    In this time of plenty, everyone seems to be wanting a lawn service. People that are gaining high returns on market investments have a little extra, and choose to spend some of it on lawn care servces. This means that there is an abunduance of new work out there. It would not be all that difficult to obtain your own clients.

    Also, in this time of plenty, everyone and their borther wants to lend you money. Look at just about every ad selling something above $500. No payments No interest for a year.

    It would seem to me that if an individual had a little smarts, he or she could do equally as well on thir own.
  5. GroundKprs

    GroundKprs LawnSite Bronze Member
    Posts: 1,969

    Don't even think creative subcontracting unless you have a good lawyer, who can criticize your arrangement. Those you consider a subcontractor may not be considered a sub by IRS. And if that happens, guess who gets to pay thru the nose?

    In this case, since you are supplying specialty equipment to the "sub" to do his work, he may not really be considered as an independent contractor. One big IRS test of subcontractors is: does the sub supply the tools of the trade?

    But I would consider Lanelle's comment to be the most practical arguement against the idea.
  6. 65hoss

    65hoss LawnSite Fanatic
    Posts: 6,360

    I don't disagree. But there are non complete clauses that you could use. I personally know that they are upheld. If you read my 1st post, I said that they would not be considered a subcontractor. It is because of the very reason you mentioned. You are supplying everything but the truck. There are very many people in this world who only want to work a "job". They don't want to work for themselves. Its about risk and rewards, and most people don't like risk.

    Everyone is correct, in theory it is great. But reality is different. This is the reason I'm not sure. Think about this, how many people call you during the year to ask if you have any job openings?
  7. LoneStarLawn

    LoneStarLawn LawnSite Bronze Member
    Posts: 1,415

    Well when I say subcontrcted I mean that there will be an actual contract between us and the employee that would also include that he would not be able to gain our customers to his business if he diecides to work for himself. This would last for 3 years after leaving the company. We don't plan on doing this soon..just wanted to here if any "big boys" are doing this. Thanks for your input guys.
  8. Toddppm

    Toddppm LawnSite Senior Member
    from VA
    Posts: 268

    There is a co. here doing this, not sure about the truck though. Got about 7-8 crews doing 900-1000 yds. a week. Supposedly living high on the hog only doing the paperwork. But i have heard he has been having a very high turnover this year, what do you do with that many yards and can't find anyone to do the work? These are 2 man crews, the foreman gets the percentage and hires who he wants for a helper by the hour. Pretty interesting. I tried paying my guys on percentage earlier this year, by the yard, any call backs or people saying it didn't need to be cut was on them. It was working pretty good until i fired the foreman for stealing work, guess where he went to work? Killed that idea, i might try it again in a couple years when i build up some year round lawn customers instead of by the cuts.

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