What Price for Subcontracting?

Discussion in 'Lawn Mowing' started by tjr, Nov 3, 2004.

  1. tjr

    tjr LawnSite Member
    Posts: 5

    What would you do in this situation?

    I have a friend who runs a lawn care business. He currently has around 50 accounts. His wife is from another country and sometimes in the winter he subs out his snow plowing and they stay with her parents for 3 months. He now wants to be able to go out of the country for several months during the summer and sub out his mowing. He would be around during spring then be gone Jun-Sep, then return for fall work and plowing. He has approached me about doing his work as a subcontractor during the summer months. (I will be a true subcontractor as I will have my own business, equipment, accounts, etc. so that is not an issue for discussion here.) The question is what pricing arrangement should I consider for mowing his accounts. I was thinking about an arrangement where he takes a certain percentage of the gross and then I get the rest. Annother factor to keep in mind is that I am starting my own business and even though I already have some accounts lined up I could probably use the extra work, so both of us could benefit from the right arrangement. What do you think make sense?

    Thanks in advance for any responses.
     
  2. out4now

    out4now LawnSite Bronze Member
    from AZ
    Posts: 1,796

    I'd be leary of a et up like that, especially if you're small. If that would be the majority of your income and something went wrong then you could be really hurting really fast. It has the potential to be instant workbase or instant problem. I would thin a percentage of the gross would be the way to go if you choose to do it. How will you be paid? He would owe you the $ if customers pay or not but outside the country I don't know how the collection would go if there was a problem.
     
  3. tjr

    tjr LawnSite Member
    Posts: 5

    There would be a contract of at least 2 years in place. I have known this guy for quite a while and we are good friends, of course that could either be good or bad. I know being friends and doing business together don't always mix.

    Any ideas of what percentage of gross would be reasonable?

     
  4. CathyLynn

    CathyLynn LawnSite Member
    Posts: 77

    Sounds like the guy is trying to have his cake and eat it too!

    One idea is to take on the work with him getting 10% and you do your best to bank all the rest except for actual expenses so that if and when you no longer have it you won't be hurt because you are not living off that part of the income. He can't expect to get much more than that if its all your equipment and so forth.

    Remember, some good advertising and word of maouth and you could hustle up a lot of work on your own without his stuff so don't let him value it real high.
     
  5. tjr

    tjr LawnSite Member
    Posts: 5

    Thanks for the input. I have a feeling that he is going to expect a higher percentage than is reasonable. I guess I'd better be prepared to get my own accounts if we can't get things worked out.
     
  6. MMLawn

    MMLawn LawnSite Gold Member
    Posts: 3,569

    Let me get this straight. You will be using your equipment, your wear and tear on that equipment, your gas, oil and trimmer line, your vehicle and your sweat and he still wants a cut?? I bet! For me it would be IF I decided to be VERY Nice to him, 95% for me (and I collect the Invoices payable to ME) and 5% for his doing nothing. But I doubt I would even be that nice and would expect 100% for what? Doing 100% of the work. If he didn't like it, well see how long he can keep customers without actually being there.
     
  7. kootoomootoo

    kootoomootoo LawnSite Platinum Member
    Posts: 4,369

     
  8. kickin sum grass

    kickin sum grass LawnSite Senior Member
    Posts: 628

    tjr,
    which part of cincy are you from?
     
  9. zmowingmaster

    zmowingmaster LawnSite Member
    Posts: 236

    well, i do the subcontracting thing all year round,if the customer pays 25 i get 20 ,,,,30 i get 25 ,,,,35 i get 25,,,,some are like 55 i get 40,,,, or they pay 75 and i get 50 for it, it all depends on where the accounts are and how far from each other, i get 20 for all the accounts that pay 20. you know , i don't worry about collecting money from customers,just mow ,trim ,blow and go. when it is leaves season well, it is the same price all year round. some people might not like it that way, but at least it keeps me busy 6 days a week and i take the day off whenever i like, but i keep in mind that i am on scheduale before doing that. i use my own truck, trailor,equipment, and i have a helper whom i pay.i don't know, am i doing that right?... but so far so good.
     
  10. zmowingmaster

    zmowingmaster LawnSite Member
    Posts: 236

    i forgot to mention, that i do plowing the same thing, my own truck ,plow and soon a salter :) , but here i got paid hourly
     

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