Subcontracting in the Snow & Landscaping Business
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Transcript of Subcontracting in the Snow & Landscaping Business
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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