Expanding business Through Use of Subs

Discussion in 'Business Fundamentals' started by beastmode5, Jul 27, 2020.

  1. beastmode5

    beastmode5 Junior Member
    Messages: 17

    For several years I’ve debated on taking on more work and using subs to fulfill the work. I am struggling with relying on subs especially If i don’t know their work ethic? What do you do when they don’t show up to plow/salt a site? How do you track this?Have any of you had a major success with going down this route or has it been nothing but a nightmare? Unfortunately, i keep coming across contractors that don’t carry insurance. I struggle employing someone and being liable for their mistakes. Have any of you added subs to your insurance policy or is it just best to have them carry their own policies? I’m assuming the latter.
     
  2. seville009

    seville009 PlowSite.com Addict
    from CNY
    Messages: 1,777

    In general, if you’re making a nice living just working by yourself, that’s pretty good. Sometimes when you want to scale up a business, you have to grow a certain amount to actually gain a benefit.

    The worst two things about any business are customers and employees (subs).....
     
    m_ice likes this.
  3. Philbilly2

    Philbilly2 PlowSite Fanatic
    Messages: 13,211

    In my current line of work, I use a lot of subcontractors. It takes time to find good ones that you can just turn loose. While you are attempting to find the good ones, you constantly have to babysit them, follow up on them, attempt to fix their screw ups by yourself, or even sometimes you have to pay another contractor to fix their mistakes.

    If you are going to have subcontractors, make sure that you have a subcontract and USE IT. The only thing that will save you when a sub tries to take you to court for some reason or another is what is in that subcontract.

    Do not put them on your insurance. They are your employee if they are on your insurance. If you have subs that cannot get you a certificate of insurance with you listed as additional insured, then you need to move on to someone else. If they do not have work comp, when your business is audited by your insurance company, you will be on the hook for it (unless they are a one man show)
     
    Randall Ave and m_ice like this.
  4. Luther

    Luther PlowSite Veteran
    Messages: 3,444

    What are your aspirations? Are you just a one man show, or do you already have a real infrastructure of sorts (shop, office with staff, a number of employees, multiple trucks with equipment, etc.) but want more? You can't/won't grow without hiring employees, and/or utilizing subs. When done right it's a win win.

    You roll the dice when hiring people, and you roll the dice when hiring subs. At least spend due diligence before doing either, and vet them as best you can. Weed out and toss the weak links before committing to anyone. You need to have standards, you will need to require all subs to have their own GL and workers comp if they have employees, and you will need to have a written contract in place with them. You pass reasonable liability onto them. Don't deal with a piker who's running under the radar, or under the table.

    What do you do when they don't show? You do it yourself, or get it done another way. Failure is not an option.
     
    beastmode5 and m_ice like this.
  5. m_ice

    m_ice 2000 Club Member
    Messages: 2,192

    These guys always crack me up when they don't have proper insurance and want top sub rates...LMAO