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How do subcontractor deals work in Minneapolis area

Discussion in 'Introduce Yourself to the Community' started by tornado, Sep 22, 2007.

  1. tornado

    tornado Junior Member
    Messages: 5

    I have a 92 f-250 7 1/2 western unimount Pro Plow. What are people paying in this area for subs and do they guarantee any hours. Insurance will cost me $950 for liability and workmans comp. I do not want to pay for insurance up front and then not recoup some of my expenses. Am I being unreasonable. Will they give me a hard time for having a manual trans? I have 410 gears so on large commercial lots I wont need to shift much. I did some driveways last year and having a stick did not cause me any problems. I have done commercial lots in my neighbors truck before with an automatic. I used to be a Ford automatic transmission mechanic so I feel more confident of not having any tranny problems. Fords E4OD does not hold up well even with all the updates. Or should I just sell my plow and buy a sled and enjoy winter. Sorry for all the questions but I just dont want to waste my money.

    Thanks for the space
  2. SnoFarmer

    SnoFarmer PlowSite Fanatic
    from N,E. MN
    Messages: 9,883

    Welcome to plowsite.

    1. Get the sled:nod:
    2. Get the sled:nod:
    3. get the sled:nod:

    Seriously get the sled:nod:

    Leave the plowing to the professionals.

    Workmans -comp? really
  3. tornado

    tornado Junior Member
    Messages: 5

    Workmans Comp?

    Thanks for the reply Snofarmer. But the largest plowing contractor in my part of town requires subs to have it. Not all contractors require it of their subs though.
  4. SnoFarmer

    SnoFarmer PlowSite Fanatic
    from N,E. MN
    Messages: 9,883

    If you want to be a sub- CONTRACTOR you still have to be a CONTRACTOR. first.

    Are you?

    He pays you by the hr=employee

    He has you give a bid or you set the price for the lot=contractor.

    You need to start up a business like a LLC, INC, or a CO.

    A sub-contractor works for the person/business that holds the contract for the lot that is all.
    If you are not a contractor you are an employee.

    one you fill out a W2 the other he has you fill out a 1099.
    Last edited: Sep 22, 2007
  5. tornado

    tornado Junior Member
    Messages: 5

    I agree with you SnoFarmer. It appears that what these guys want is for me to get insurance then they will pay me 55-60 dollars an hour with no guaruntees. I know this is a tough business. Its got to snow to make money. I do have at least 30 hours of comercial plowing experience. By the way I do most of my sledding in your area nice place you live in. And I do appreciate your feedback.
  6. SnoFarmer

    SnoFarmer PlowSite Fanatic
    from N,E. MN
    Messages: 9,883

    Sorry if I come off being a jerk but.. It is getting late in the season to get in to the business.

    Kind of looks like they want a cheep employee.

    Let me ask you this.

    How much is a truck and operator worth an hr?.
    How much is your ins? commercial liability.
    wear and tear/maintenance.

    $60 is a little low, It is a o.k.price if you were his employee.

    I just posted this in another thread but what the heck...lol

    it will help you figure out what you need to make to be profitable.

    yea if we get snow:dizzy: riding is good, on the south shore ridding is better:nod:
    Last edited by a moderator: Sep 22, 2007
  7. dakotasrock

    dakotasrock Senior Member
    from MN
    Messages: 260

    whatever u do, DO NOT lowball. Theres too many of those in the metro.
    Last edited by a moderator: Sep 22, 2007
  8. Niteman9

    Niteman9 Senior Member
    Messages: 165

    I sub for a landscape company here in Michigan and get paid $60.00/hr. I receive a 1099 from them at years end. They do not require any type of special insurance, All they want to See it you regular auto liability policy. Just because you get paid by the hour does not make you and employee. I am an Electrical Engineer and also do work for Ford Motor Company and Bill through another company. We charge Ford by the hour the company who bills for me takes 10%. For the 10% he covers the billing and liability Insurance. This work is also paid by the hour but I am not an employee of Ford or the company I use to bill Ford.

    I always hear "Leave it to the professionals". Well most landscape company need more trucks to handle snow removal than mowing. It is not good business to let trucks sit over the summer months. Therefor they use subs. If they choose to pay them buy the hour does not make them employee's.
  9. SnoFarmer

    SnoFarmer PlowSite Fanatic
    from N,E. MN
    Messages: 9,883

    employee or contractor.
    $60 would be rock bottom even then will you cover your costs.
    He will not pay to fix your equipment.
    he will not pay your ins.
    He will not pay your taxes.

    lets take just your Ins costs.

    $950 ~$60=15.8333hrs
    You will have to plow for 15hr at $60 just to make back your INS costs.

    what about gas, wear and tear, taxes and your time?

    working for your self you should be making around $120 to $190 an hr.
    Last edited: Sep 23, 2007
  10. hydro_37

    hydro_37 PlowSite Veteran
    from iowa
    Messages: 3,790

    I sub out at 50 an hour but also do my own accounts. I average close to $120 an hour for myself. If you can work some of your own accounts in then you come out ok running a route.
  11. T-MAN

    T-MAN PlowSite.com Addict
    Messages: 1,363

    The Employee versus's Sub debate is endless.
    Personally I dont think you will ever get 120-190 an hour as a sub:dizzy:
    There are alot of HUGE contractors out there who do millions in snow with just a handfull of employee's. Im sure all there subs are not considered employees. I would also bet many have been audited, and have not had to pay employee tax let alone COMP.

    This statement from Sno's post pretty much sums it up for a Snow plowing Sub contrator:

    · Significant Investment— if you have a significant investment in your work, you may be an independent contractor. While there is no precise dollar test, the investment must have substance. However, a significant investment is not necessary to be an independent contractor.

    · Expenses — if you are not reimbursed for some or all business expenses, then you may be an independent contractor, especially if your unreimbursed business expenses are high.

    · Opportunity for Profit or Loss — if you can realize a profit or incur a loss, this suggests that you are in business for yourself and that you may be an independent contractor.

    There ya go, still think you may be an employee ?
  12. tornado

    tornado Junior Member
    Messages: 5

    Thanks for the advice

    You guys have all given me some good advice. I wish I could get $60.00 an hour with only my regular auto liability insurance I would do it. But for me to shell out $950 and hope it snows alot is unreasonable I think. So if anybody wants a western unimount Pro Plow 7.5 for a 92-97 HD Ford let me know. It needs sandblastiing, paint and a new cutting edge. Has new lights and mounting kit. $1200. Otherwise I will just do some driveways again this year.

    Thanks for the space

  13. SnoFarmer

    SnoFarmer PlowSite Fanatic
    from N,E. MN
    Messages: 9,883

    I didn't want to turn you away from snow removal.
    Done right it can be a money maker or a just getting by winter job.

    How many drives do you have?
    You know you will still want to have liability ins.

    Was the 950 for 4-6 months or for a year?

    If you have an established clients expand on that and work for this guy all you can this year.

    Watch the business around you that receive poor service or lots that are not done on time.
    This could be an opportunity ripe for the picking.

    Go over your expenses.
    A lot can happen plowing snow.

    Talk to this guy ask him how many hrs his subs/employees worked last year.
    Try to get a feel for how much work there is.

    Good luck.

    on the IRS's page the part that caught my eye is.

    "Who is an Employee?
    A general rule is that anyone who performs services for you is your employee if you can control what will be done and how it will be done."

    Most plowers that are "subs" are directed by their boss/contractor. That would make them employees?
    It looks like a lot more folks are employees instead of sub-contractors.

    You have to take every thing in to consideration just one little thing can make all the difference between employee or a contractor.

    I found thoes links interesting, they answer the old question.
    Last edited: Sep 23, 2007