sub-contracting percentage

[spbutton 14]

Hey everyone

Happy Thanksgiving... I am just starting in this industry and have been talking with a contractor in my area about doing some sub-contracting work.

What kind of percentage of a contract do you pay your sub-contractors - during initial talks he has mentioned paying me 25 -35% of the contract. This appears to be low, I would have thought that this figure should be his percentage and the lions share come to me for doing the work on my time, with my equipment. Please correct me if I am wrong as I am new to this industry.

My prior experience in the UK and in Swimming Pool Service & Maintenance had led me to believe that when I have someone else do the work, I am freed up to pursue more business while still making money and not getting my hands dirty.

Thanks in advance for any help.

Regards

Steven

[spbutton 14]

sorry, forgot to add signature... it's below --------->

[PressurePros 249]

Sounds like a bad arrangement. You bid the job to him then he bids 20%-30% on top of that to the customer. This guy could lowball to get a job and you will be busy, making no money and hating life.

[PPC 37]

sometimes being sub contracted out will help you get started also leading you to bigger jobs but 25 to 30% is crazy tell him you want 75 or 80

[MMI Enterprises 289]

No way man!. You need 70 to 80%.. Yes you may be saving some marketing and sales dollars in a ready made work situation but you gonna be having to suffer all the equipment, chemical, and labor burdens as well as taxes. Surely he gonna 1099 ya to get out his huge tax burden. With that said no way I would sub out work and go through all the fund handling or the like and take less then 30%. ..If it were all his stuff and yer like his employee then you could expect 40% or less.

[Kory 14]

In most cases the first 50-60% covers costs and the later is your profit. So you would be getting screwed, unless its all his equipment, chems, and GAS! Also make sure your very clear on pmt terms.

[Jeff 232]

Hey everyone

Happy Thanksgiving... I am just starting in this industry and have been talking with a contractor in my area about doing some sub-contracting work.

What kind of percentage of a contract do you pay your sub-contractors - during initial talks he has mentioned paying me 25 -35% of the contract. This appears to be low, I would have thought that this figure should be his percentage and the lions share come to me for doing the work on my time, with my equipment. Please correct me if I am wrong as I am new to this industry.

My prior experience in the UK and in Swimming Pool Service & Maintenance had led me to believe that when I have someone else do the work, I am freed up to pursue more business while still making money and not getting my hands dirty.

Thanks in advance for any help.

Regards

Steven

Stay away from this contractor!!!!!! If he's trying to screw you with the percentages mentioned, he'll probably try to screw you at payment time also

Move on

Jeff

[Russ Spence 76]

I only make 10 to 20 percent the sub makes the rest

[Jim Carroll 14]

blah blah blah, blah. heck with the percentages, what kinda dollars are you talking about. if the money is there and you are not busy than check it out. have him show you a job and let him tell you what he is willing to pay and then take it from there. i just completed and big $$$ job that I would have done for 30%, you just have to look at it on a job-to-job basis.

[MMI Enterprises 289]

For sure Jim yer right when there is huge padding going on...After all the guy securing the sale deserves what he ended up selling in the way of extra gravy and we really don't know what them figures might be.

For sake of common sense though it would be wise that a fella break down his costs and understands what his profit percentage needs to be in a minimum sense.

Steven, If you have such info into your costs and needs then they usually can be translated directly into a percentage that you can use in the real world. Check the deal out if you do as Jim says.

Part the reason why some are sighting figures like 20 or 30% profit on the contractors part is because if you imagine a true partnership deal where all profits or costs are split down middle then you'll see that many opperate under premise of about 40% profits(can be alot less dependng on business model, marketing, etc.). When you split that profit he get's 20 and you get 20. In yer case though you need the other 60% to cover costs. Reason why you take no less is because your already gonna be soaked in labor as he is silent partner doing nothing.

Know your figures then let him have his gravy if it there.

[spbutton 14]

Hey guys

Thanks for all the replies, you have confirmed my thoughts with regard to the percentage I should get.

Jim, I completely understand what you are saying with regard to the amount of $$$ a job may bring in, irrespective of the percentage... I hope one of those jobs comes my way some day!!!

I just want to make sure that I know the normal practices for this industry - I will be using my own equipment and will be seeking my own customers. I approached this guy to see if was looking for subcontractors, he is very busy and doesn't have much time to manage the business. He has offered to provide some training and sub contract to me - it should work out well for me and I am very grateful for his help... as long as I make money, there's no point in being in business otherwise.

I will sit down and work out my costs to ensure that we both get a fair deal, thanks again for the input!

Regards

Steven B