sub out fert. and pest. applications

Discussion in 'Pesticide & Herbicide Application' started by Doh!, Mar 2, 2003.

  1. Doh!

    Doh! LawnSite Member
    Messages: 50

    I did the search, but I was looking for a few more opinions on the topic.
    I'm a solo operator and maintain 40 or so residential and several commercial properties. Only mowing, mulching, pruning, clean ups, and the usual landscaping basic planting. I don't have the equipment or the time to do the applications, but if I were to sub out the work, I think I could get most of my accounts to use the company I recommend.

    I'm unsure how this deal would work. Would I collect the application payments from the homeowner or collect a percent (20% ?) from the applicator? Or would I be better off settling for a referral fee from the applicator.

    I don't really want to be in the fert. and pest. side of the business, Just looking to offer more service and increase profit margins. I don't do any kind of applications now, but I don't have a problem getting a license just to sell the work or collect payments. But if I do, I'll have to raise my insurance from a 200,000 policy to 1, 000, 000 (higher premium).

    Any suggestions? Thanks.
  2. ipm

    ipm LawnSite Senior Member
    Messages: 264

    check your PM
  3. cemars

    cemars LawnSite Senior Member
    Messages: 387

    There are a lot of ways that a referral agreement with a chemical only company could benifit you regarless of wether or not you collect any payment or fees at all. I work with a number of companies in this capacity that have been very beneficial for us both. As you mentioned-being able to "offer" your customers more services without actually providing the service is one. This reduces the chances of your customers swithing to an all inclusive service assuming that you can coordinate with the chem company on service timing (making sure you don,t show up to mow right after fert/weed services and visa versa. Also, if the fertilizing company doesn't mow, mulch, landscape-who are they going to refer their business to. Referrals go both ways and this in it self should provide you with the additional profit you are looking for without having to change your insurance coverage. Regardless of the arrangement, make sure you referring your work to a reputable company that you are comfortable working with and that will deliver on their promises to you and your customers.
  4. philk17088

    philk17088 LawnSite Fanatic
    Messages: 17,386

    I currently have a contract with a landscape maintenance company to do their applications. I receive 85% of the revenue, they keep 15% to handle all billing and adminstration. This works well for both of us. At the beginning we both went out to the customers and did the introductions and explained what was happening. If the customer has addirional needs beyond the program the maintenance co. sends me a work order e-mail to take cate of it. We had lawyers draw up a sub-contractors agreement with all the info about payment,non disclosure of proprietary info and no-compete clauses regarding both of our companies, otherwords, mutually exclusive.
    It's working well.
  5. Doh!

    Doh! LawnSite Member
    Messages: 50

    I am glad to see that this has worked well for others. I've got a good company in mind, they already service a few of my lawns on their own contracts and they don't offer any of the services that I do. I'm fairly sure that they would like the idea as things would be mutually beneficial.

    I would assume that the important thing, like any business relationship, is to have the responsibilities established in a written agreement.

    thanks for the input so far-good points!

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