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Need advice on sub-contracting a route

Discussion in 'Commercial Snow Removal' started by Jguck25, Jan 31, 2010.

  1. Jguck25

    Jguck25 Senior Member
    Messages: 592

    Hey I have been plowing with my dad for the last couple years and this is my first year completely on my own with my own truck and equipment. I am 19 and really getting into this whole snow removal service.

    This year I have 25 accounts that my father and I split and some of them are fcommercial and take a good amount of time so I do not think i would be able to take on too many more myself or customers will be unhappy with the wait time because they have to be done every 2-3 inches of accumulation, and when we get fast falling storms it gets a little cramped. I do slightly over half of the driveways and then my father does the other half, i do everything with the business and just pay him after the storm for 100% of what he plowed.
    So far everyone has been very happy with the quality, promptness, and prices. This is great but I am getting a lot of new calls that i cannot take on but would love to expand my services.
    My question is what would be the best thing to do in my situation. I want to set up a third route and sub-contract it out to someone local under my business name. I am not sure how i would go about that whole situation with paying him, but i have thought of two different ways

    1.). Would I pay him by the hour? If so how much if he does not have his own business, just a local guy with a dependable truck and plow.
    OR

    2.) take a percentage of the whole route and tell him that I will pay X amount for this route. If so, say if it is a $450route for me, how much should I pay him?

    The only reason i am not too sure about paying hourly is because what if i get someone extremely slow and likes to milk it and take as long as he can for that route, or what if i get someone who has a blizzard 810 and has been plowing for a while and can do the route in half the time as the slower guy? The guy who is better should not get penalized for being faster and make less than the slower guy because he does a better job..

    Overall, I just want it to be honest and make it so the sub-contractor respects the job and knows that I am treating him well. I have definately realized that people do a better job when they have respect and know that the employer is not trying to be cheap and cheat them out of a few bucks. thats what i beleive anyway..

    Any advice would be greatly appreciated

    Oh and when i say "Sub-Contractor" I dont mean what most of you think of as in like another company. I am talking about someone around town who doesnt have many dirveways and wants some extra money
     
  2. dforbes

    dforbes Senior Member
    Messages: 247

    We do commercial only. The way I pay my subs is per stop. They get $50.00 per stop for lots, $25.00 per stop for walks and $12.00 per bag for ice melt. Durring the storm when the lots are full they can do 2.5 to 3 stops per hour. Then at night they go back and clean everything off they make much less per hour. If they have to go back and fix anything its on their own time. It seems to work well for everyone.

    You have to have the right person for this to work (attention to detail)

    Make sure they have the proper insurance. Get a certificate and keep it on file. If you don't you will be responsable.
     
  3. forestfireguy

    forestfireguy PlowSite.com Addict
    Messages: 1,276

    There are many different ways to do what you're thinking. Try the search feature, you'll find ALOT of talk on this topic.

    But we have two different kinds of subs, ones we use to augment our trucks in our routes, these guys get paid hourly, but are supervised by our route captains, therefore we are in control of the time they spend "on the clock" and can monitor their efficiency, we have a really detailed route book, each service address has a page, each page has a google earth pic, which indicates where snow is to be stacked and any hazrds. Also a pic of the sign or front of the building, so theres no OOPS I plowed the wrong place. We only take this step in case someone unfamiliar with a particular site is sent there for whatever reason, guys are assigned to a route and are expected to know their normal sites, but trucks break, big storms happen and we shift around assets as needed. The pages also have production times for plowing 0-4.4-8 etc, and salt amounts per app. I don't have any idea what the going hourly rate is in your area. We pay between 70-95 hr depending on expierience and truck/plow size. We give these guys a minimum of 5 hours work each storm, say for a 2 incher, more as the accumulations go higher.

    Then there's site specific subs, they do one site for us, be it a large one where they run multiple trucks and or equipment or just a site that fits their area better than us having to send a truck 10 miles out of the way for us. These guys get paid a percentage usually they run between 65-75 % of the total. This is arranged to be set prices for specific services.
     
    Last edited: Feb 1, 2010
  4. Jguck25

    Jguck25 Senior Member
    Messages: 592

    Dforbes, when you say that you pay 50 perstop for each commercial lot, is that a set price or does it depend on the size of the lot?

    So overall my main question would be, If i had set up a route that would take about 3-4 hours to do one way and I bring in say 400. would a good amount be between 275-300 to give them? 300 would be 75 percent of the money. It would be hard to set a solid amount for each driveway because the drives around here greatly in the size and condition and difficulty.

    Or when you pay hourly, do you tell them how long this specific route takes and pay them that amout? or wait until they are done and see how long it actually took them? If i were to pay them hourly my estimate would be 75, which would still put the person at about 300 for the 3.5 to 4 hour route.
     
  5. forestfireguy

    forestfireguy PlowSite.com Addict
    Messages: 1,276

    I'd say go with the fixed price for the route, that way you maintain fixed accounting. No matter how you do it there will be challenges and choices.
     
  6. fordmstng66

    fordmstng66 Senior Member
    Messages: 527

    I am a sub for someone. He pays me by the hour. I am sure he has an idea of how long it should take me for my route. I have also been working with him for 12 years.
     
  7. hydro_37

    hydro_37 PlowSite Veteran
    from iowa
    Messages: 3,790

    You covering the sub's insurance? or will he even be required to have
    We pay hourly but we know how long the route takes
     
  8. dforbes

    dforbes Senior Member
    Messages: 247

    It is a set price for the lots that I sub out now. I have had larger propertys in the past that I paid more for because they were much larger and required more time. The final cleanup on the lots on these routes should not take longer than 1 hour to complete.

    If it were me I would prefer to pay a set amount to complete the route as aposed to paying hourly. You will always know how much your profit would be. The problem might be if he does part of the route and has a problem and you have to finish it. Make sure you discuss how you would handle this.

    Right now most of our propertys are real close to the same size and difficulty. In the past I have had lots that I payed $75 or $150 for. Maybe you could figure out what you want to pay for each drive. smith drive pays $20. Jones drive pays $25. Just write it on the top of his work order. Then he gets paid this amount for whatever he completes.
     
  9. Brant'sLawnCare

    Brant'sLawnCare PlowSite.com Addict
    Messages: 1,754

    I think this is the most fair way to do it. If you are charging per hour, then you can cover yourself a little better doing it the hourly route. That's probably the only way I would pay subs hourly.
     
  10. Jguck25

    Jguck25 Senior Member
    Messages: 592

    Yeah thats a good idea, I think i will go for the set amout per route. that makes things much easier and both of us know what we will be paying out/getting paidpayup