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Subcontract or not?

Discussion in 'Business Fundamentals' started by Jake's Lawn and Snow, Mar 21, 2020.

  1. Hey everyone,
    Starting my company next winter. Spending the spring, summer, and fall working full time and saving up some money to buy what I need.
    I'm wondering what I should do. I have plenty of experience on sidewalks, in a plow truck, in a salt truck, and in a bobcat. Should I get my own clients right away, or should I sub out to a bigger company?
    If I get my own clients, it will likely cost me more money to start up, because I'll need a solid 3/4 ton or 1 ton with a plow.
    If I sub for just sidewalks, I could start with a lot less money. Save money on the truck by getting a 1/2 ton, shovels, and snow blowers.
    A friend of mine has his own business nearby, and he subbed out to a larger company for sidewalks, they paid him $35 hr per person. He led a 4 man sidewalk crew for about 10 miles of sidewalks. Not sure what he paid his crew though.
    Is that a good idea for me to start with?
    What do I need to know about subcontracting? How and when is it typically paid? How much is paid in south-central Wisconsin? (if anyone is around here)
    How much insurance will I need if I'm not plowing?
    I've already got prices for the equipment, and insurance. Just need a little advice from those that have their own company.
     
  2. Fourteen Contracting Inc.

    Fourteen Contracting Inc. Senior Member
    Messages: 342

    If you were to get your own clients right away would they be commercial clients or residential clients?
     
  3. OP
    OP
    Jake's Lawn and Snow

    Jake's Lawn and Snow Member
    Messages: 34

    Residential to start. Then I would have to add in marketing costs.
     
  4. Fourteen Contracting Inc.

    Fourteen Contracting Inc. Senior Member
    Messages: 342

    Have you been doing residential mostly with the current company you work for? Or commercial? Apologies for being the one asking questions, just trying to gauge where your experience is.
     
  5. OP
    OP
    Jake's Lawn and Snow

    Jake's Lawn and Snow Member
    Messages: 34

    Ask away.
    I did commercial accounts with a bobcat and cage plow this past winter.
    I've done 4 seasons of sidewalks 2 seasons of commercial plowing in a truck with sidewalks and 2 seasons in a bobcat.
     
  6. SilverPine

    SilverPine Senior Member
    Messages: 137

    Why not both?
    When I started up, I took on some sub work to beef up my route. Most of the subbed site were just sidewalks, simple. After 2 more years, I phased out the sub work.

    If your not planning on gaining clients for summer work as well, stick with subbing.
     
    EWSplow likes this.
  7. Fourteen Contracting Inc.

    Fourteen Contracting Inc. Senior Member
    Messages: 342

    Nice. The WI guys on here can help you with what you should be looking at for pricing. I can tell you from my experience that a solid walkway crew / person is difficult to come by. I think you can do both as well in the beginning to fill out the route. I would think you might as well just put yourself in the 3/4 or 1 ton right away instead of going the half ton route...it doesn't seem like you're dabbling here, you seem determined to make a go of it.
     
  8. OP
    OP
    Jake's Lawn and Snow

    Jake's Lawn and Snow Member
    Messages: 34

    I am determined, just haven't run my own company before. I also dont have much of a financial backing. So saving up money is what I'll have to do then come fall, decide if I have enough money for a bigger truck and plow. I only make $18 hr as a pesticide applicator through spring summer and fall. So I'm gonna be putting in as much overtime as I can.
     
  9. OP
    OP
    Jake's Lawn and Snow

    Jake's Lawn and Snow Member
    Messages: 34

    When subbing for sidewalks, do you salt too?
     
  10. SilverPine

    SilverPine Senior Member
    Messages: 137

    Yes, they supplied bins and the salt.
     
  11. Fourteen Contracting Inc.

    Fourteen Contracting Inc. Senior Member
    Messages: 342

    Ok, try to save as much as you can obv. and try to be patient. If fall rolls around and you don't have enough dont force it. Jump on your friend's walkway crew or continue to work for your current company. I know that's not the answer you are looking for but it's more or less guaranteed money.

    Around here, yes. But check with your friend who does it, he'll have a better answer for your location.
     
  12. EWSplow

    EWSplow PlowSite Fanatic
    Messages: 7,430

    I pay my sidewalk subs per job. When I estimate the jobs and what I pay I try to make sure they can make $45 - $50 / hour (at each property). They have their own trucks, blowers, shovels, spreaders, etc and liability insurance . However, I always have spare blowers, etc they can get if theirs breaks. I realize I'm taking some liability if someone gets injured by doing this but, my main objective is servicing my clients.
    I supply the salt, but they have to go to the shop to load their own (not paid for this, its calculated into their jobs). They have tight routes with not a lot of travel time.
    Salting after dealing with snow is on them, as well as salting for freezing rain, ice, etc. I do pay per site for salting as well. Its easy work, but again, their truck, gas, etc.
    I hope this helps.
    Another thing, single stage blowers work great, are easy to haul, load, etc, but you may need a good commercial 2 stage when the sit hits the fan, even though it will rarely get used.
     
    Last edited: Mar 21, 2020