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New business questions

Discussion in 'Business Fundamentals' started by Blizzard38, Aug 30, 2015.

  1. Blizzard38

    Blizzard38 Junior Member
    Messages: 8

    I'm in the process of starting a facility management/property maintenance company. One of the services we would manage is snow removal. My company is more from a management perspective of maintaining a facility and all of the usual sub contracted services. I don't have a plow and have no intention of performing snow removal or ice management services at this time. Thanks in advance for any info that you can provide. This site has been great.

    Insurance- I've done a lot of reading and made a few phone calls. Some suggest I would need snow removal insurance since my company is technically responsible for the service. Others think general liability would be enough especially with passing on liability to the sub contractor and or being added to their insurance as additional insured?

    Bids-I'm assuming most companies would use an hourly rate then determine the length of time it would take to plow. What other factors affect your quote? If you received payment the following day for your services would you bid the job differently?

    Obviously we are being paid by the business whose facility we will maintain however I realize the importance of maintaining a positive relationship with our subcontractors.

    Any other insight or advice would be greatly appreciated.
  2. SnoFarmer

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

    Have you meet Mr.Jhon Allen?


    why would we want a middleman to get his hands on our $$
    When We can go to management ourselves.?
    Last edited: Aug 30, 2015
  3. Wilnip

    Wilnip Senior Member
    Messages: 592

    No offense to you, but read some posts on USM, Merit, Brickman, and countless others. You will find many members here are not pleased with the way they treat subs. Probably won't get much help from Plowsite members.
  4. 1olddogtwo

    1olddogtwo PlowSite Fanatic
    Messages: 12,174

    Bud, u just walked in to the lions den at dinner time.

    U won't find much help here as most will not work for a middle man such as what ur proposing
  5. Sawboy

    Sawboy PlowSite.com Addict
    Messages: 1,700

    I'll echo everyone else's sentiments. We aren't going to help middlemen who do nothing, other than collect checks on the backs of our efforts. I will add that I'm quite impressed at how everyone has responded cordially.
  6. Blizzard38

    Blizzard38 Junior Member
    Messages: 8

    Apparently I touched a nerve, that wasn't my intention. As someone who has been in management and in charge of signing snow removal contracts, I meant more to allow a business to outsource all of their facility needs (which will usually be 10-15 different services in a year) through one point of contact. If you can submit a bid on a lot to me because a company has hired me to handle that process what's the issue? You would get whatever price you agreed to. I do appreciate the feedback and I apologize if I've offended anyone.
  7. Camden

    Camden PlowSite Fanatic
    Messages: 6,604

    You can pull off what you're proposing as long as you've got the financial backing necessary. The reason so many people get a sour taste in their mouth when they hear the words "management company" is because the person who hired them didn't have enough working capital to pay their sub contractors until they themselves got paid.

    It's backfired more often than not. Some guys are owed 10's of thousands from these management companies and the outlook to get paid is pretty grim.

    Several years ago I adopted the philosophy of "if you can't beat 'em, join 'em" and now I have a quasi-management company of my own. I only have a few clients but I am responsible for over 1000 locations. You'll never see my name on these message boards saying that I didn't pay my subs. They all get paid before I do. Aside from my own cash, I have a line of credit that can cover me if I would ever run short. You're going to need something similar because you'll get blasted if you don't pay your subs in a timely fashion.

    As far as insurance goes, I am the contractor on record for my clients therefore I'm the one who carries the insurance.
  8. SnoFarmer

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

    Ok so they hire you to hire me,
    Why is the pie still the same size as when you didn't work for them.

    In other words the pie is smaller for me becuse they have to pay you to find me.

    Or are you the new Angie's list of snow removal?

    You have a rough road to hoe as a lot of guys have been burned by the Nationails
  9. Diesel Dan

    Diesel Dan Senior Member
    Messages: 219

    Guys on here B**tch about middlemen, but hire subs...

    I have no problem with subcontracting, it's how 90% of our got our start in this business.
  10. Blizzard38

    Blizzard38 Junior Member
    Messages: 8

    Excellent info Camden thank you. I will be operating in the same manner.
  11. Sawboy

    Sawboy PlowSite.com Addict
    Messages: 1,700

    Thank goodness! Another national to shuffle paper and collect 60% of the bid for doing nothing. We need more of those.
  12. Sawboy

    Sawboy PlowSite.com Addict
    Messages: 1,700

    If you don't know the difference between an NSP, and working as a real sub, I feel bad for ya.
  13. LapeerLandscape

    LapeerLandscape 2000 Club Member
    Messages: 2,247

    Management companies are just like the Federal Government, they take $$$$$ and do very little for it.
  14. Mark Oomkes

    Mark Oomkes PlowSite Fanatic
    Messages: 13,250

  15. Blizzard38

    Blizzard38 Junior Member
    Messages: 8

    I am not a national. This will be a local operation. Taking care of a larger facility is time consuming and a 24/7 job. There is a often 10/15 sub contractors that are needed in a typical year. If a business sees value in hiring me to handle that work load it really shouldn't matter to any snow removal companies. You submit your bid and sign a contract and will be paid quickly. I see some negativity yet no one has made a legitamate argument. I understand payment issues seem to be a concern which is why I'm planning for that to be a strength of my company. Claiming that I'm "taking your money, or a piece of the pie" or "doing nothing and taking a cut" aren't supported by any facts. If you sign a contract with a $ amount that you submitted, and then are paid quickly for your services, what is the problem?
  16. SnoFarmer

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

    Yes ,if you sign a contract you agreed to the price.
    And you sigen the low baller.
    Why would you take the high or mid price bidder as you have to save them $$$
    to earn your fee.
    You have to save tha company money to justify your "service" Right?
    How is this good for us, To play a active roll in the race to the bottom?

    it doesn't really matter if your compeneys is named as the primary or as the insured,
    A contractor doing subcontracting still is a separate business that is hired, they have to carry the level of ins that is required. They are not your employe.
    Last edited: Aug 31, 2015
  17. 1olddogtwo

    1olddogtwo PlowSite Fanatic
    Messages: 12,174

    Pipe dream....

    That never happens in the real world.

    What happens if they don't pay you?

    What happens when they change the requirements after you have a signed contract with a contractor?
  18. Camden

    Camden PlowSite Fanatic
    Messages: 6,604

    I'm loving these comments....

  19. derekslawncare

    derekslawncare PlowSite.com Addict
    Messages: 1,003

    OK, I will try to explain what everyone else is saying that you aren't understanding. These #s aren't accurate, just using easy #s for ease of discussion. You approach Wally World with your proposal to manage their facility for them. Wally World used to handle this on their own, so they know that they have had snow services done in the past for 300.00 per occurrence, so they won't pay more than that. So now, you have to find someone that will plow the site for 225.00 so that you can bill WW 300 and make your cut. The problem is is that the only contractors that will service that size property for 225 are the low ballers with junk trucks/plows that are always broke and unreliable. So now WW says piss on you, our lot wasn't serviced on time and we lost business because all the crack heads cars got stuck in their lot trying to go spend their welfare checks on their monthly allowance of Eggo waffles and Schlitz beer. So you don't pay the contractor who screwed you out of the account and go in search for another. Sooooo, long story short is you want the good reliable contractor to service your account for you at the low baller rate. That is what we mean by taking our money for shuffling paperwork. Hope that helps clear it up. I do wish you luck, sounds like you are at least TRYING to do it right.
    western w/lml likes this.
  20. 1olddogtwo

    1olddogtwo PlowSite Fanatic
    Messages: 12,174

    Anyone know the difference between a NSP and a LSP?