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How much do you pay subs

Discussion in 'Starting a Lawn Care Business' started by Smitty58, Dec 27, 2003.

  1. Smitty58

    Smitty58 LawnSite Senior Member
    Messages: 531

    I'm a solo operator ,but looking to expand in 2004. I've been struggling with adding a partner or using a sub when needed. How much is a fair rate to pay a sub? Would a sub be covered under my insurance? Do those of you who use subs pay a finders fee for them getting you work? And if so how much is that finders fee?
  2. glenjr10

    glenjr10 LawnSite Member
    Messages: 98


    I do not understand this question.

    Are you saying that you will be hiring a sub, and then telling them wath the other company can cahrge. Ex. Smitty's Lawn care hires Joe's Pesticide, and prices the job at $xx.xx and then you tell Joe, that this is the price. I do not see how this would work.

    I would not pay a finder's fee, I would just make a commitment to them to give them business also. I would give some reward to a customer though, but never a sub.

    I would never tell a cstomer a price on a job, if you are going to have someone else perform the work, unless you are able to eat the difference in price.
  3. Smitty58

    Smitty58 LawnSite Senior Member
    Messages: 531

    glenjr10- I'm struggling with how to bring a helper into the biz. I've posted it a couple of different ways to get some advice. My question here is about paying someone to help me. I'm not farmng the work out and dictating the price ,I just want to know if you use a sub to help you do your jobs (mow, mulch ,whatever) how much do you pay. I don't want to hire a employee since I only do this part time. So for example if I have a sub help me with a route of say 10 yards and it pays $30 per yard ($300 total) ,how much would I pay him. I'm thimking a flat 30% but I don't know if thats good or bad.
  4. glenjr10

    glenjr10 LawnSite Member
    Messages: 98


    This may answer some of your questions.

    I personally think that you are going about it all wrong, because he is working for you, he is not working for himself. You are hiring him, on "paying" him for his services.

    Cleck out this link
  5. Smitty58

    Smitty58 LawnSite Senior Member
    Messages: 531

    glenjr10 - I'm not sure we are on the same page yet. I'm not doing anything yet so I can't be doing it all wrong. I'm trying to figure out how to do this in the upcoming year. I know years ago when I worked in the construction field I was paid as a sub ,although they set the schedule and the jobs. Maybe they were not doing it right I don't know ,however that is how it was done. I had to have my own basic tools and was paid an hourly rate ,but no benefits and they called us "subs". Looking back at it it doesn't seem legal since they paid us an hourly wage. Actually we all started out as regular employees then some genius figured out they could save money by calling us "subs" and not pay benefits. At the time I was young and they were offering a better hourly rate to go this route so I took it. What I'm trying to decide on is which is better: A partnership (50-50, 60-40 whatever), Staying solo and hiring an employee, Staying solo and hiring subs as needed ,or 2 guys working together as 2 different companies.
  6. SodKing

    SodKing LawnSite Bronze Member
    Messages: 1,641

    If you pay an hourly rate, or even a per diem rate, tell him where to go , what to do , when to do it, he uses your vehicles and tools (or even if he uses his own) he is an employee and subject to the rules governed by osha, irs, insurance, and unemployment.

    When you wre paid as a sub...that was illegal.

    Also, I have also seen a question as to if you have to pay overtime. You do on any hours worked in excess of 40 hours per workd week, time and 1/2.
  7. Johnny

    Johnny LawnSite Member
    Messages: 101


    Think of your equipment and your employees in terms of production. If you start off with yourself and a 36", you don't need to add an employee or bigger equipment until you have maximized you and your 36" production. When this occurs you may hire an employee or you may buy a 52" to increase production. You will probably opt for the 52". Then when you, the 36" and the 52" maximize production, you will hire an employee to increase production. Then when you, the 36", the 52", and your employee maximize production, you may hire another employee and run a 7 day per week schedule. When you, the 36", the 52", and 2 employees have maximized production, then you may want to add another truck, trailer and all the bells and whistles.

    I guess the question is, do you really need this guy in the capacity you have spoken (partner, a second crew, an employee, etc)?
  8. Soupy

    Soupy LawnSite Gold Member
    Messages: 3,125

    You will make more money paying an employee by the hour and paying taxes on him, then you would paying a sub. A sub isn't going to do it for 30% more like he will give you 10%. Even if you paid a sub to use your tools and pay him 30% you are losing most of your profit. He is making just as much if not more off the job then you are. Plus it's illegal and when uncle sam comes collecting you will be bankrupt.

    In your example you mentioned 10 yards at $30 a piece equaling $300. How much of that is your profit? If you break the law and pay your employee as a sub. and give him 30% you will be paying $90.00 Why not just pay him $8 an hour to start and you should be able to cut those lawns in 4-5 hours. That is about $50 including taxes.

    Are you legit? After you deduct your expenses for the day, uncle sam will take about 15%

    My point, You can not look at it as $300, I'll give you $90 and think you made $210.

    The only time you want to Subcontract is when a customer wants a service you don't offer. you sub it out and keep a few bucks for yourself, But the Sub makes 90% of the money.
  9. hole in one lco

    hole in one lco LawnSite Bronze Member
    Messages: 1,793

    so here is my question if i use my equipment to cut for some other comp what shooed i be getting payed all checks are pad to my comp

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