For those who subcontract mowing....

[USA Lawn Care]

what's your going percentage ratio? 80/20? 90/10? 85/15? What rate seems to keep everyone happy?

[ritchiem]

Lawn care business tips

I base all my subcontracts at a 28% markup. And to keep it affordable to the end client I also make sure I receive a discount on their rate, since I brought them the work.

[Steve]

What is your view on when you should sub-contract out mowing?

[USA Lawn Care]

RitchieM....sorry, but you lost me with the mark-up / discounted rate thing.
Guess I'm looking for "it's a $50 cut a little out of my area....but there are guys right around there looking for extra work".....what is a fair rate to pay the crew cutting it for me? 80% ($40)...85% (42.50)?
I'm just looking for opinions (to add to my own). I mowed years ago full steam and was able to quit my job and start my own business but took on a lot of work at 70/30...I got the 70%. I found that to be too low. It still paid but was too low for nice profit especially when I had 2 trucks and 3 guys working for me.

Now, the guy subbing out all the mowing (I think it was about 200 accounts at that time).....that's roughly $200,000 and he kept 30% of that each year so he was pulling in $60k without touching a blade of grass.

Steve,
I'm working on increasing my own account list, along with having the ability to take a little time off and sub lawns out to a responsible lawn guy for a week or two to go out of town, etc. I'd actually like to build the account list up and do exactly what the guy did for me years ago....except I'd bump my percentage up to keep the guy I'm subbing out the work to happy.

[Steve]

Very interesting!

What do you feel is the benefit to doing it that way versus having employees do the mowing?

[USA Lawn Care]

Originally Posted by Steve

Very interesting!

What do you feel is the benefit to doing it that way versus having employees do the mowing?

Steve,
The main benefit right now is I can actually RUN a business instead of creating another job for myself. It fits into how I want my life right now. I could do what I did....go buy more expensive equipment....maybe, possibly, hopefully, find an employee who is actually responsible, actually has a driver's license, will actually show up for work, or I can build the business again and find a few good people already in the business who are looking for extra work. If residential yards average $1000 / year, if I can sub them out at 80/20 then every 5 I acquire is $1000 in my pocket. I can still deliver customer service and do everything else that I would do with a crew of employees, with no major equipment / employee issues and no major overhead costs besides the usual insurance, advertising, etc.
I did it for 5 years as the guy getting the work sub'd to him so I know the ropes and know for a fact that it works, can be done and has been done and is still being done very profitably.
If I need to jump in and help out, I've got some gear and can do that but I want to run the business, not create a job for myself.

[devuono311]

VERY CAREFUL on who you sub to. I just started out last year and when I got a little over my head I subbed out to a guy, (though I was still making profit on the jobs I subbed him to do ) just to catch him trying to steal business. Damn snake that he was, hurt a little. Subbing is nice because they provide their own equipment , just be careful not to sub out and find out your not doing it because they provide equipment but YOU provided THEM with clients in fact!

[USA Lawn Care]

well, I just received another opinion from a guy with an extremely large mowing company and he's telling me I should never take less than 40% if the sub is using his own equipment......so 60/40......which doubles my 80/20 opinion.....hmmmm.....

I'd love to hear more opinions on this one. Feel free to chime in.

[wandfsmall]

Originally Posted by USA Lawn Care

well, I just received another opinion from a guy with an extremely large mowing company and he's telling me I should never take less than 40% if the sub is using his own equipment......so 60/40......which doubles my 80/20 opinion.....hmmmm.....

I'd love to hear more opinions on this one. Feel free to chime in.

only a fool would take on subcontract work when he has the ability to do the equipment to do it and the address of the customer that could give him the job for long. So either you have a fool for an employee or a competitor at your customers house.

[Steve]

VERY CAREFUL on who you sub to. I just started out last year and when I got a little over my head I subbed out to a guy, (though I was still making profit on the jobs I subbed him to do ) just to catch him trying to steal business.

What was he doing? What should others who try to manage their business this way, look out for?

The main benefit right now is I can actually RUN a business instead of creating another job for myself. It fits into how I want my life right now. I could do what I did....go buy more expensive equipment....maybe, possibly, hopefully, find an employee who is actually responsible, actually has a driver's license, will actually show up for work, or I can build the business again and find a few good people already in the business who are looking for extra work.

That is a very interesting plan. Have you thought of maybe helping other small business owners, manage their business? Could something like that work? Where you take a % to handle all the office work and other services? Or no?

Maybe you could look into property management, where you offer many services to a client and sub them all out.