Please tell me what you think of my large contract policies.

Discussion in 'Business Operations' started by Element Property Mgmt, May 9, 2013.

  1. Mark Oomkes

    Mark Oomkes LawnSite Fanatic
    Messages: 15,290

    Well, not sure of the policies in Wisconsin, but it sounds like you are most definitely bending if not just flat out breaking the law.

    How much does this guy make? If it's over $600 per year, he is an employee. There is no way you can consider him a subcontractor. So you should be paying taxes on his income and unemployment, etc. You might be required to carry WC on him as well.

    Just because you are an LLC and have an EIN does not make you legit.
  2. grass-scapes

    grass-scapes LawnSite Bronze Member
    Messages: 1,552

    If he makes a dollar and is under your direction or uses your equipment, he is an employee, not a subcontractor, and as such, you are required to take out taxes and all of that government stuff.

    Workers comp insurance is different and varies by state. It is a great idea to obtain a policy no matter if it is just you working. If you are working on a commercial property, you are usually required to have a policy in place. Otherwise, if something happens to you or an employee while on their property, you could, in a sense, make a claim on THEIR policy.

    in MY state, i do not have to have a policy unless I have 3 employees, but I can assure you, I haven't gone a DAY without a policy with someone in my employ. Thats just asking for trouble. Wait till someone gets hurt on the job...
  3. rootytalbot

    rootytalbot LawnSite Senior Member
    Messages: 273

    Are you a bank?
    If not, then use their money.

    I think folks like that want to be in the drivers seat. He can have you jumping through hoops. Let him make someone else's life miserable.

    In the past I have told clients that I don't hire subs or buy the material until the money is in my bank. I never had an issue with that.

    When I built larger projects - additions to houses - I used this method successfully...
    I would get a deposit to cover initial costs to a certain stage - lets say footers poured.
    Then I would meet with them, with invoice in hand for work completed, and ask for more money to get me through the next stage - lets say framing, then I would meet again and ask for more. The closer I got the end the end, the more frequent the meetings. I was never more that a few hundred in the hole right before the occupation inspection. And I always got that before the final inspection was scheduled. I always stayed ahead of them with the money. And I was able to sleep very good at night.
    Getting behind on the money (using your own money) is not smart in my opinion.
  4. 32vld

    32vld LawnSite Gold Member
    Messages: 3,983

    Never tell a customer you need to pay an employee.

    A healthy business has the money on hand to operate. It is a bad sign that a business is fly by night when they give the I need to pay my guy line. Not saying your are fly by night or not honest but you sound like it when you say those things.

    Never tell a customer that you need x dollars in advance to do a job to cover materials.

    You do not want the customer to know that $1,000 job that you are only spending $200 on materials. His mind will cause him to wonder why is the labor so high.

    Better to say you need half $500 to start.

    Then there is the option to get paid as the job gets done in stages. I did a $2,700 job. I got $1,400 after first stage done. $600 2nd stage. $700 final stage. Now I have to add that I did not need to buy $200 for materials until the third stage

    Customer happy to pay that way. Without saying the customer knows that this job got spread out over three weeks and I need cash flow and the way no customer wants to pay up front and get ripped off from a no show. She knew that I was only willing to trust her in stages so there had to be a payment schedule. Again unspoken.

    Do not be sad that you lost a job. Be happy you lost a customer that had stiff written all over him.
  5. 32vld

    32vld LawnSite Gold Member
    Messages: 3,983

    Half the time I work solo. The times my friend comes out and helps me if I do a bunch of small jobs, and or mowing route at the end of the day I will have the cash to pay him.

    Then when there is the big job where I have to wait to get the check, he waits. He knows I have a small business and even though I try to always have cash to cover expenses sometime things come up.

    Such as I had to buy 4 tires and an alignment. BFG TA KO's. Like them a lot. They cost a lot.

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