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Seasonal contract subcontractor

Discussion in 'Business Fundamentals' started by wewille, Dec 12, 2012.

  1. wewille

    wewille Senior Member
    Messages: 311

    I have a question for all you snow business whizes! Last week i picked up another condo association. Its a smaller one, 6 buildings, 12 units, pretty simple and easy. However i just dont have the man power to get the job done, so i brought on a subcontractor last Saturday 12-8-12. We are way behind in snow this year, but we got our first snow Sunday 12-9-12. The subcontractor an I have yet to finalize payment plan, so im looking for opinions. He has a three man crew get this done, all covered under workmans comp, unemployment, blah blah blah. The contract is seasonal, with no limit for snow. We slightly discussed ill give him 90% and I will keep 10% I dont want to pay him hourly, I think hourly pay is worst pay system ever. Or should I pay him a certain amount each time it snows? Only problem with that is if we get way more than normal snow this year... We are way behind already... What do you think? I need to be fair for both of us. He does a great job and I want to treat him well, but I need something too.
  2. merrimacmill

    merrimacmill PlowSite.com Addict
    from MA
    Messages: 1,823

    Well for only a 12 unit condo complex, the gross revenue from that account cannot be that much. So how much could you really be making off it at 10%? Even if it was a $20,000 account (which it sounds like it is not) you would walk away with $2,000. IMO situations like that are not worth the risk that you will assume as the contractor, and not to mention the stress of dealing with it over the winter. The only time I would disagree with it not being worth it is if you have plans of geographical expansion and are building a remote market to self perform in a following year.

    I would negotiate a seasonal plowing price for the lot, and then perform the salting myself, and also hire hand laborers and give them a snow blower since performing shoveling doesn't require large capital investment. That way you are pulling a % from his seasonal plowing, and you are also gaining revenue and overhead recovery for the salting and shoveling.
  3. wewille

    wewille Senior Member
    Messages: 311

    Thanks for the reply, the gross revenue is not very much. At the end of the season I would get about $600. Not much, but not bad for how little I have invested in this contract. I tried to hire a few more shovelers but since this one kind off fell on me I didnt have time to find anybody. My current staff is maxed out already otherwise I would just do the job.

    I do have plans to service more properties in this area next year, in fact just down the road we have a much larger 18 unit with private roadways, and requires alot of hand labor. It is in a very affluent and pretty new part of town. With out a doubt I plan to service the 12 unit with my own guys next year. There is also a good possibility we will be doing some landscape installs over the summer as well. I see potential with the property and do not want to miss out, I just cant service it quick enough this winter with my guys.