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Has anyone tried this?

Discussion in 'Starting a Lawn Care Business' started by howardsells2000, Oct 26, 2007.

  1. howardsells2000

    howardsells2000 LawnSite Senior Member
    Posts: 355

    I have an opportunity to take over another LCO's route. I already have enough customers for me to handle. I want to expand but I didn't have very good luck with employees. I will have enough equipment for two crews but I was thinking I could sub-contract someone to cut these other properties and basically rent them my equipment. For instance if he grosses $1500.00 a week, I would charge him $500.00 a week for the use of the equipment. This is just an example. That way he has an incentive to get his work done faster, he isn't paid hourly. He would be responsible for maintaining the equipment as well, so hopefully he would take care of it.

    The numbers will probably be different . I was thinking I could charge him about a third of his gross, so if he adds more customers we would earn more if he looses customers we lose money. I guess I would still have to pay for the insurance but he would be an independent contractor. Would this idea work? Has anyone tried this or is this crazy thinking?
  2. howardsells2000

    howardsells2000 LawnSite Senior Member
    Posts: 355

    Anybody, someone must have an opinion.
  3. IMAGE

    IMAGE LawnSite Bronze Member
    from midwest
    Posts: 1,134

    I havent run a LCO business yet, but in a general business sense, I dont think thats a good idea.

    Bad for you:
    Your equipment
    Your liability
    His Profits

    Bad for him:
    for $500 a wk he could finance all new equipment and get his own route.

    Rather then privide ins and rent equipment to someone, it sounds like you would be better off employing a crew to do it.
  4. topsites

    topsites LawnSite Fanatic
    Posts: 21,653

    The taxicab business is kinda like that, drivers lease the cabs...
    But it's not as plain forward as it sounds.
    First the driver just pays X amount per day for the cab, ALL the money the driver collects is his or hers to keep, I do believe he has to fill up the fuel tank. Now ALL the maintenance is the owner's problem, I'd say prepare to do maintenance far above and beyond what you're used to.
    Then the cab company itself owns, well, it's weird...
    The company itself owns little to nothing, they sell or lease the name itself, then guys buy cars and paint and etc and they then lease them to the drivers... All sub-contracted, from the company to the taxi owners to the drivers, not sure where dispatch comes in but all these folks have to get paid, somehow, from one fare...?

    I dare say by the time it's all done it's another story with one too many middlemen.
    That's always been my problem with sub-contracting, somebody is getting paid for doing nothing, the customer has to pay for this, and it may sound good in theory but I think in the end it means less money for everyone involved.

    The old saying 'how many guys does it take to screw in a light bulb?'
    If it cost 5 bucks to have it done, and 5 guys are needed to have it done ...
    1) The business owner, who rents the name of the business to 2.
    2) The owner of the light bulb, who leases the bulb to 3.
    3) A sub-contractor (the supervisor).
    4) The secretary who answered the call.
    and 5) The worker...

    I suspect that's what happens when you get regulated :laugh:
  5. stevenf

    stevenf LawnSite Bronze Member
    Posts: 1,612

    I know someone now that actually does that for another company. The company got to busy and said that he could have a bank contract and get $1,200.00 a week yet the company is still making money off of the contract.
    I think its a good idea. It works great for the person I know.
  6. loom-gen

    loom-gen LawnSite Member
    Posts: 150

    I tried this and it worked for a while. I was doing all the maint and stuff and was charging the person 50%. The person would take a list of lawns and leave and come back. The equipment hours would be logged and the next day would start. This, I found out, is called having an imployee. So, I went ahead and put the person on payroll for $15 an hour. Now he is still happy and I'm making more money. You can't supply a person with equipment and give them the work order and call it subbing. In order to sub, a person must be a seperate company, have their own equipment and specialize in a spacific job you do not have the wish to do. If you contionuosly supply this person with a 10-99 and get audited, you will have to pay the back taxes for their employment like FICA and social security. If you want to lease the business name and equipment, you have to become a leasing company. Be carefull.
  7. howardsells2000

    howardsells2000 LawnSite Senior Member
    Posts: 355

    Thanks for the replies. I would like to hear more opinions, if anyone else has one.

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