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Getting Away From Being A Sub

 
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Old 04-29-2019, 10:26 PM   #1
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Getting Away From Being A Sub


About half my business is with me as the main contractor and half with me being a sub. Not a sub in the traditional sense where I am doing a small part of a big job but rather someone subbing the entire jobs to me and talking a cut off the top.

The person subbing the work used to have a big business that was sort of a competitor and sent their overflow work to me. They have since “retired” and no longer have any crews but they actively market and rely on their client base they built up over the years and have me do the work.

It is an ok arrangement but I am continually doing great work and building up their client base. We have got lots of repeat work on things we have done but it all goes through the other company.

I will not outright stab them in the back and steal customers from them that they introduced to me. Not going to happen. That being said I want to figure out how I can do more work on my own and less subbing so that I can build my own business up.

My fear is that things are trending the other way where more and more of my work is subbed work and I eventually will have very few of my own customers and then all of a sudden these other guys control my destiny.
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Old 04-30-2019, 06:27 AM   #2
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Re: Getting Away From Being A Sub


The grass is always greener on the other side.

Being someone that hires subs and plan on doing more of it, as I get older, let me give you another view.

When you are a sub, and have a good relationship with the General, you don't have to bid the work. When you do, it's a pretty easy bidding process. For the most part, I already know what my subs charge. I can bid a job, without even bothering them. Yesterday I sent 2 pictures and one question to a sub. He answered with a short text. His part is done. If I get the job, he will get the job.

How much time do you spend doing estimates for the guy that is hiring you?

The good part for my subs is they don't have to do any selling. They get a job with a scope of work. I have one guy that supervises the job, answers any customer questions, makes sure all material is on site as needed, and takes care of anything that falls between the cracks.
The sub, shows up, works, then goes home. I pay quickly, once I get an invoice. They don't have to wait for the customer to pay. They don't have to spend any time trying to collect from a customer.

As far as you building your own business. You already are. People know who is doing the work. When this guy decides to hang it up, don't you think he will be referring calls to you?

Nothing wrong with wanting to build your own business, but make sure it is worth it. Worth you spending the extra time, selling and making multiple trips to someone's house to make a sale. Make sure it's worth the extra time in writing bids.

Looking back, I was better off when I was a sub. I had alot more free time.

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Old 04-30-2019, 08:17 AM   #3
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Re: Getting Away From Being A Sub


Thanks for the reply.

In a scenario like you describe it does sound like you are making it easier for the subs on the bidding process, payment, etc.

In my scenario I spend just as much if not more time doing estimates on the sub work. The other guy never looks at or goes to the job sites. I basically handle everything like it was my own job and he just adds his percentage to the top for finding the customer. It has been two years since he even stepped foot on a job site.

While he does handle the finding the customer, contracting them, and collecting payment it is not like I am paid fast. He pays me once they pay him so it is really no benefit.

Yes I think if this guy eventually hangs it up and our relationship is still going on at that time then I will get all the customers but my worry is he finds some other guy before then who will do the work for less and cuts me out.
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Old 04-30-2019, 08:25 AM   #4
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Re: Getting Away From Being A Sub


I mean I'm all for capitalism and everything but I can't imagine not having a problem with just selling a job and never go into it or having any input on it and marking everything up. LOL.

Realtors are that way. That's why I don't like them. LOL. A lady i know is trying to sell her house , really good deal, just put it up for sale by owner. A realtor brought a buyer but wanted 4%. She asked if I thought that was fair. I said $25,000? F*** no. Tell that guy to kick rocks. It's only been like two weeks since you put it up for sale. LOL. As it turns out I ended up bringing her a buyer that I'm pretty sure they will close with. No referral fee. Just glad that guy's getting a house he wants and she's getting rid of a house she doesn't want. See how that works? LOL


If I was that guy I would probably try to hook up with you and see if you could pay a commission for any sales I brought to the table and sold for you.

I know exactly what you're talkin about, we did exactly the same thing but with houses when we were slow during the recession with a builder my dad used to work for. Very good guy, very talented Builder. Pretty good deal for both of us, we did not get much of a markup but we did get some. Definitely glad I broke off of that as well though.

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Old 04-30-2019, 08:50 AM   #5
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Re: Getting Away From Being A Sub


Is that guy marking up your price, or taking a cut from it? Are you giving him a discounted rate?

Do you know what he's invoicing the customer, and do you actually see it?

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Old 04-30-2019, 09:07 AM   #6
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Re: Getting Away From Being A Sub


This year I got out of a situation very similar to yours. The reason for getting out of the situation was much different however, and there is now some bad blood between us that I don't want to post on the internet.

That said, while your relationship is still strong and he's keeping you and your crew busy, step up your advertising. Try to fill your calendar with your own work. Use him as much as he uses you to fill your gaps. If he's paying you what you ask, continue working with him until your brand and your advertising can keep your crew busy without completely relying on another contractor to find your leads.
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Old 04-30-2019, 11:36 AM   #7
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Re: Getting Away From Being A Sub


Hammerswing called it, want more work that's all yours, you've got to generate it one way or another.
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Old 04-30-2019, 07:41 PM   #8
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Re: Getting Away From Being A Sub


Quote:
Originally Posted by MarkJames View Post
Is that guy marking up your price, or taking a cut from it? Are you giving him a discounted rate?

Do you know what he's invoicing the customer, and do you actually see it?
A little of both. I give him a 7.5% discount and he is marking up my rate 7.5%. I feel my discounted rate is justified because of the volume he brings and the fact he is finding the work. At the end of the day though his 15% over what I charge sure would be nice in my pocket.

Yes I see what he is invoicing the customer. He always CCs me on the email contracts and invoices with them.
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Old 04-30-2019, 08:39 PM   #9
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Re: Getting Away From Being A Sub


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A little of both. I give him a 7.5% discount and he is marking up my rate 7.5%. I feel my discounted rate is justified because of the volume he brings and the fact he is finding the work. At the end of the day though his 15% over what I charge sure would be nice in my pocket.

Yes I see what he is invoicing the customer. He always CCs me on the email contracts and invoices with them.
Your GC is very lucky to have you. We run things similar to what your GC does. We bring all the leads and sell the jobs, take care of payments and on our contracts etc. We had a sub run all the construction phase, dealing with customers etc. We always paid on time and we paid them a lot more than we should. The jobs never finished on time, customers were complaining and we found out the subs charged change orders on their own. We no longer work with them and it's tough finding a sub who is capable to running a crew and taking on a job that produces quality work.
Our mark up is higher than 7.5%, but they dont know what we make, we just pay them what we agree to pay to take care of a job. If I can find a sub like you, I wouldnt mind paying a lot to keep the guys busy as long as they are reliable.
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Old 04-30-2019, 11:04 PM   #10
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Re: Getting Away From Being A Sub


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A little of both. I give him a 7.5% discount and he is marking up my rate 7.5%. I feel my discounted rate is justified because of the volume he brings and the fact he is finding the work. At the end of the day though his 15% over what I charge sure would be nice in my pocket.

Yes I see what he is invoicing the customer. He always CCs me on the email contracts and invoices with them.
If I am reading everything right, 7.5% and 15% is nothing. I will pay 20% every day for a gc to find jobs, handle all the legal problems, collect the money and be liable for backing up the work. Don't forget that the entire 15% does not belong to the gc because he has bills to pay like everyone else. Maybe, if he is lucky he ends up with 3%.
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Old 04-30-2019, 11:44 PM   #11
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Re: Getting Away From Being A Sub


The way I look at it is this: If you need this guy to keep your crew rounded out to 40 hour weeks then you have to keep him for now till you can get rid of him. I get it, I wouldn't poach customers either, I have morals too. As much as you deserve that 15% you don't want your guys walking away either. Maybe your hard work in bidding and doing all the footwork would be better served biting off bigger jobs for yourself rather than for him so when he comes callin you get the luxury of saying "well dude, I'll look at it and I can calendar it but I'm into this job for the next two months unless I want to hire another crew, wanna earn that 15 and supe?"



Intentionality is the name of the game, get it out of your head that you need this dude.
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Old 05-01-2019, 06:46 AM   #12
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Re: Getting Away From Being A Sub


A good chunk of my work is sub work, I think I probably make more doing that than I do on the jobs I manage myself. So much less BS in subbing.
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Old 05-01-2019, 07:01 AM   #13
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Re: Getting Away From Being A Sub


Miss just subbing being 80% of my business like it was back in the day sometimes.
No advertising

No selling

No PITA homeowners

Made as much 20 years ago with just me and a helper. Didn’t have this small beast to kept fed at all times. Way less stress too.
Don’t miss chasing the money though. That was something that used to drive me crazy





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Old 05-01-2019, 10:06 AM   #14
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Re: Getting Away From Being A Sub


That's weird to get seven and a half from you and seven and a half from them. I cannot imagine a situation I would ask a sub to pay me for anything. Crazy

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Old 05-01-2019, 11:03 AM   #15
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Re: Getting Away From Being A Sub


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Originally Posted by NYgutterguy View Post
Miss just subbing being 80% of my business like it was back in the day sometimes.
No advertising

No selling

No PITA homeowners

Made as much 20 years ago with just me and a helper. Didn’t have this small beast to kept fed at all times. Way less stress too.
Don’t miss chasing the money though. That was something that used to drive me crazy





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My roofer and gutter guy will both come the next day if I need them to because I pay same week. The roofer came with two days notice and tore off and replaced a u panel roof for me at a plant and The Gutter Guy came the following Monday and threw gutters up, no notice. The plant was moving machinery and needed the roof to quit leaking

I won't get a single dime for that roof for 30 days, not even enough time to get a deposit. Just a signed contract.

Amazing to me that there's that many contractors who will not pay their bills Timely.

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Old 05-01-2019, 11:49 AM   #16
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Re: Getting Away From Being A Sub


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My roofer and gutter guy will both come the next day if I need them to because I pay same week. The roofer came with two days notice and tore off and replaced a u panel roof for me at a plant and The Gutter Guy came the following Monday and threw gutters up, no notice. The plant was moving machinery and needed the roof to quit leaking

I won't get a single dime for that roof for 30 days, not even enough time to get a deposit. Just a signed contract.

Amazing to me that there's that many contractors who will not pay their bills Timely.

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I was doing 10-12 jobs a week. I’d say I saw the builder or contractor on 2 of the jobs. Sometimes wouldn’t mail the invoice for a few days or more.

Wasnt uncommon to have 30k owed to me at all times. I would still deposit 30-40k a month it’s just some of the deposits were 30 days after I did the job. Even when it was me and a helper for a few years I always had 30k of operating capital at all times.

I know some guys who work week to week and absolutely have to have the check that day. Never mattered to me


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Old 05-23-2019, 01:42 AM   #17
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Re: Getting Away From Being A Sub


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About half my business is with me as the main contractor and half with me being a sub. Not a sub in the traditional sense where I am doing a small part of a big job but rather someone subbing the entire jobs to me and talking a cut off the top.

The person subbing the work used to have a big business that was sort of a competitor and sent their overflow work to me. They have since “retired” and no longer have any crews but they actively market and rely on their client base they built up over the years and have me do the work.

It is an ok arrangement but I am continually doing great work and building up their client base. We have got lots of repeat work on things we have done but it all goes through the other company.

I will not outright stab them in the back and steal customers from them that they introduced to me. Not going to happen. That being said I want to figure out how I can do more work on my own and less subbing so that I can build my own business up.

My fear is that things are trending the other way where more and more of my work is subbed work and I eventually will have very few of my own customers and then all of a sudden these other guys control my destiny.
You wake up one day and get a call from a guy that has a contract he wants you to fill. He is not capable or qualified to do this job. He advertises himself as a "lawn and tree service" but cannot do anything to a tree above 20'.

You tell him you hope he chokes on a d and dies.
You tell him "I write the mf contracts around here mfer!"

Congrats you are a contractor
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Old Yesterday, 11:51 PM   #18
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Re: Getting Away From Being A Sub


I dispise working for other contractors. Only prime contracts for me. Although there are quite a few on this forum I'd have no problem working for.


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Old Yesterday, 11:56 PM   #19
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I dispise working for other contractors. Only prime contracts for me. Although there are quite a few on this forum I'd have no problem working for.


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Chit I feel the same way but I'd sub from you.

I've built some nice decks but I'd take a week off to work for you lol

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Old Yesterday, 11:57 PM   #20
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Re: Getting Away From Being A Sub


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You wake up one day and get a call from a guy that has a contract he wants you to fill. He is not capable or qualified to do this job. He advertises himself as a "lawn and tree service" but cannot do anything to a tree above 20'.



You tell him you hope he chokes on a d and dies.

You tell him "I write the mf contracts around here mfer!"



Congrats you are a contractor
You know, you can make some pretty good jack off of good contractors. My tree guy clears some pretty good money and I find a way to Mark him up at least 20%. LOL


Not all contractors are ****bags.

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