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Subcontracting in the Snow & Landscaping Business

Ed Laflamme LICThe Harvest Group

284 New Canaan RoadWilton, CT 06897

www.harvestlandscapeconsulting.comed@harvestlandscapeconsulting.com

203.858.4696

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NIGHTMARES

Yikes!

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• Financial

• People

• Equipment

• Expertise

• Workloads

• Geography

Why Subcontract?

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Financial1. Don’t have the cash 2. Can’t take on more debt3. Reduce exposure if job is lost4. Sub smaller jobs to free crews5. Fix the cost to prevent overruns

Why Subcontract

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People

• Don’t have the right people

• Don’t have enough people

Equipment

• Need Specialty Equipment

• Not Enough Equipment

Why Subcontract

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Expertise

• Don’t know or have the experience

• Don’t have the license

• Avoid dangerous work

• Don’t have the right insurance

Work Loads

• Can’t make the time requirements

Why Subcontract

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Location of Job

Too far away

Undesirable location

Why Subcontract

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1. Only potential sub is a direct competitor

2. Customer expects you to do the work

3. When you need the revenue to cover overhead

4. Potential damage to site doing snow work

WHEN NOT TO SUBCONTRACT

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How To Find Good Subs

– Network

– Newspapers

– Yellow Pages

– Internet

– Tradesman

QUALITY SUBS

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Qualifying the SubsInsuranceReferencesVisit their jobs unannouncedSee proof of licensingGet size of company, equipment, historyCompetitively priced?ReputationDriving recordsWeb sitesCriminal & credit records

SUBS

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Pricing Your Subcontract Work

Pass through – no markup

Sub gives standard price – conservative markup

Sub gives volume discount you markup more

Note: Beware of the really cheap price

PRICING

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Requirements

General Liability including property damage

Workers Compensation

Auto liability – property & casualty

Inland marine coverage on equipment, tools, materials

sub will have on site

Special coverage’s, i.e. snow plowing, tree work,

pesticides

WHAT LIMITS SHOULD SUBS CARRY?

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Assuring Quality Work

1. Written Specs2. Meet & review work on the site3. Have – on site supervision4. Have work in progress meetings5. Take the “pulse” of your customer6. Have sub understand level of quality expected7. Progress/final payment tied to your satisfaction

QUALITY

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Attaining Operational SuccessCommunication is the key – Example

1. Alert sub of pending storm – from long range weather forecasts

2. Contact sub within 24 hrs before the storm

3. Contact within 4 hours before predicted start

4. Notify when to go

5. Require them to notify you upon arrival on job

6. Give them feed back after storms

7. Be sure to get all contact information from your sub

Operations

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Protecting Relationship With Your CustomerPrevent sub from talking with customer?

Be careful what information you share

Don’t confide confidential information

Consider having sub wear your uniforms

Consider putting your signs on their trucks

Inform your customer you may use subs

Your contract should have sub provision

*Video or pictures of all jobs pre-season

Your Customer

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1. Consider setting safety requirement

2. Hold safety meetings & include subs

3. Be sure equipment on jobs is safely used

4. Consider checking OSHA ratings on subs

Safety

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Relationships with Your Subs

1. Seek their advice

2. Set ground rules & expectations up front

3. Be friends but business is business

4. Pay your subs according to your agreement

Subs

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Referrals from Subs

• Ask for referrals from their customers

• Refer your subs when appropriate

Subs

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Dot All the I’s

Some Contract Essentials

• NAMES, ADDRESSES, CONTACT NUMBERS

• WORK SITE LOCATION

• DESCRIPTION OF THE WORK

• START & END DATES AND ANY SPECIFIC TIMING

• COST OF LABOR & MATERIALS OR PHASES OF THE

WORK

Legal Aspects

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• Payments

• Signatures of those authorized to sign

• Special requirements

• Consequences for non performance

• Consequences for non payment

• Consequences for cancellation of contract

Legal Aspects

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• Guarantees

• Safety requirements

• Sub-contractor can not sub contract clause

• Non compete & confidentiality clauses

• Contractor (you) ability to sub clause

Legal Aspects

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QUESTIONS?

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Ed Laflamme LICThe Harvest Group

284 New Canaan RoadWilton, CT 06897

www.harvestlandscapeconsulting.comed@harvestlandscapeconsulting.com

203.858.4696