Subcontract Agreements Help please

Discussion in 'Starting a Lawn Care Business' started by christian80, Feb 3, 2006.

  1. christian80

    christian80 LawnSite Member
    Posts: 8

    My name is Christian I have been in the buisness for 9 to 10 years now and I am on my own now. I have recently taken over 38 accounts from a friend I helped start his buisness over 7 years ago,and he is doing great. I am getting 38% of what each account brings in,I do not feel as if that is enough, after I pay the equipment payment to him plus gas and insurance it hurts what do I do? I know he didnt not have to help me but I feel as if he is using me. Right now that it is winter I do my accounts twice a month versous 4 times and if it is hard now shitt when summer comes I dont know what I am to do.
     
  2. work_it

    work_it LawnSite Senior Member
    Posts: 976

    Wow, sounds like you're in a bit of a bind. How did you come to your agreement and what are the percentages each party is to receive of either the gross/net income? I wouldn't have agreed to anything less than 40% of the NET income. You mentioned that you're paying him for the equipment. Is it a purchase or are you renting? Honestly Christian, it really doesn't sound like you put together a business plan or anything that even resembles a business plan before jumping into this deal head first. And before anybody can give you any useful advice there's a lot of information you're not sharing. On the surface I can honestly say you're not going to be able to afford to stay in business very long. You're making less than minimum wage if you're only getting 38% of the gross. What would really help is if you posted a signed agreement...if you have one.
     
  3. christian80

    christian80 LawnSite Member
    Posts: 8

    Thanks for the reply,ok here it goes I am making 2971 dollars for 38 accounts I am buying the equipment from him,the loan was 5000 dollars I got a 42 inch standard low miles a new 21 inch micro cut honda mower a new weedeater and I just bought a new shandawa blower the best one out for 600 a 8x10 trailer sprayers ectttt. I pay him 310 dollars a month for the loan and I pay the taxes and insurance, I do not have a signed agreement with him yet thank god,but I just cant give up now I have 3 wonderful girls to think about,and I dont quit when the going gets tough, I am making it but just not satisfied with the out come so far. If there is any info you need to help me I would be glade to help thanks christian
     
  4. work_it

    work_it LawnSite Senior Member
    Posts: 976

    Are you making $2971 each week on 38 accounts? That would be $78/cut which would bring me to the question of what size are the properties? In this area each property would have to be 1 1/4 acres to get that price. The reason I'm inquiring is because you need to factor in future repairs. I can buy 38 accounts (ea. bid at $35/week) for $4000.

    Just out of curiosity, you mentioned sprayers. If you are licensed to spray chemicals as an employee of another company have you been re-licensed as a business owner? If yes, are you happy with the prices your friend was charging or are you going to have to rebid them to meet todays standard prices?

    It sounds like you have a lot of things to reconsider and will find even more once you start figuring out your expenses and what you need to make. Hold off on signing an agreement until you punch a lot of numbers and weigh your options.
     
  5. christian80

    christian80 LawnSite Member
    Posts: 8

    Thank you for your help,no I am making that a week it is a month and no I do not have my spray license in this state as long as you are spraying chemicals that you can buy from the store you do not need to get a license for that. I do these accounts every other week during the winter months as you know or may not I have found that during the summer months you may give your clients four visits but I make up for it in the winter as I give them 2 visits a month,and still get payed the same amount. like I said yes I kinda jumped into it but I thought as a friend he would help me not take advantage of me,so if you where to do this what would the bottom line be for you % wise an account.
     
  6. christian80

    christian80 LawnSite Member
    Posts: 8

    Sorry I have had a few drinks and a long day now I get it.Ok I am not buying these accounts he doesnt want to sell I am strictly subcontracting these accounts out for so many months to see how things go at 38% of each accnts net worth. K now it seems to me that after I do the calculations that yes it is not enough when I add the equipment repairs into this along with the taxes I am to pay.What do I do?
     
  7. work_it

    work_it LawnSite Senior Member
    Posts: 976

    Christian, you may want to look into getting a commercial applicators license. Check this out: http://agr.wa.gov/PestFert/LicensingEd/Licensing.htm
    Just as I expected; you've been misinformmed. As with any state, only a homeowner can apply chemicals to his/her own yard without a license as long as the property isn't being used commercially. But that's because they own that property. There are states which will allow an LCO to apply fertalizers (only) without a license, but that doesn't include pesticides. You seriously need to contact your state dept. of agriculture. http://agr.wa.gov/PestFert/docs/Form4375.pdf
     
  8. LB1234

    LB1234 LawnSite Gold Member
    Posts: 3,210

    One word...

    Attorney.


    Have a legal, binding contract/agreement made up.
     

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