Subcontractor Question

Discussion in 'Pesticide & Herbicide Application' started by TURFGOAT, Nov 17, 2007.

  1. TURFGOAT

    TURFGOAT LawnSite Member
    from iowa
    Posts: 2

    I am a Fertilizing Manager for a small company in the mid-west. My companies owner has approached me with the option of subcontracting the customers from him for a "certain" percentage straight off the top. I would be responsible for everything except collecting. What is the fair percentage rate for a guy in my shoes?
     
  2. indyturf

    indyturf LawnSite Bronze Member
    from Indy
    Posts: 1,873

    I'm going to say somewhere around 30% but I'm not sure, because you need to find out if you will need to carry liability Ins and possibly pay your own income taxes and social security since he may want to pay you as a independent contractor. then 30% might not be enough?
     
  3. patterson

    patterson LawnSite Member
    Posts: 54

    Good points on the SS and income taxes. I don't really know what the "going rate" on that type of deal is, but if you say everything but collecting is your responsibillity, I would think your percentage should be at the very least, the better part of the income. I'm assuming everything includes gas, insurance, fertilizer, weed control, repairs, maintainance, replacement equipment, time spent on service, estimates, and on and on.

    In other words, if this is to become a turnkey business for the owner, what percentage should he get for doing nothing? Remember, the customer's happiness is directly related to yours. If you're getting screwed on a bad deal, you probably won't do as nice a job, and in turn the revenue will drop for everyone.

    And, whatever you decide, get it in writing.
     
  4. indyturf

    indyturf LawnSite Bronze Member
    from Indy
    Posts: 1,873

    I wasn't even thinking about material cost! Will you be paying for for equipment and maintenance too? I was probably way to low!!
     
  5. TURFGOAT

    TURFGOAT LawnSite Member
    from iowa
    Posts: 2

    Thanks for the comments. Just to add some info- I would be responsible for everything including equipment, product, insurance, exc. I'm just wondering what his cut of the gross off the top should be. Thanks
     
  6. turf hokie

    turf hokie LawnSite Silver Member
    Posts: 2,744

    His cut = as little as possible.
    If you are responsible for everything then he should be happy with taking maybe 10-20% to cover his billing and office hours. But it is your butt on the line when it comes right down to it.
     
  7. indyturf

    indyturf LawnSite Bronze Member
    from Indy
    Posts: 1,873

    I agree totally! maybe you can work out a deal to just buy him out? or at the very least any new customers you bring on are yours! then in a couple years you have your own customer base and can go on your own.
     

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