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welcome back to callahan’s corner mike
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callahan here where
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you ask the questions we answer them
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live on facebook let me tell you before
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we get into subcontractors
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um and how to go out and find the best
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subcontractors
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and the things you need to be doing to
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cover yourself legally and make sure you
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have retention of the whole entire
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season
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um i gotta i gotta tell you check out
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turf’s up
00:21
radio specifically carpool was just on
00:26
uh with darren over there had a great
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time this morning for uh trips up radio
00:30
dropped some knowledge and had a lot of
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fun so uh something that i was really
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excited to get on there trips up radio
00:34
today
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uh check out the podcast they have but
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uh i’m on the carpool episode from today
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august uh i believe today is the 12th uh
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time is flying by so speaking of august
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12th and one of the questions submitted
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was mike what is the best practice to go
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out and find subcontractors specifically
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for snow removal
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but i’m also going to hit on lawn care
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as well so even if you’re in the home
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cleaning industry
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and you are going out and finding
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subcontractors this will be applicable
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so uh question at hand was how to go out
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and find the best subcontractors
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for your snow removal or lawn care
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business so first thing that i did is i
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created a video just like this
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put it on top of a landing page with a
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service autopilot form
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for people to actually fill out and
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start the application process to become
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a subcontractor
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so the things that we want to talk about
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to differentiate ourselves as
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the a level um
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top contractor to work for as a
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subcontractor is the first thing i want
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to hit on
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and exactly what we did at callahan’s
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was week the pay
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so most subcontractors are paid monthly
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or
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even longer than one month so in the
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example of
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lawn care or snow removal if we have a
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subcontractor agreement um
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traditionally is that i finish all the
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work
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as a subcontractor i send the bill to
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the company i’m doing the work for and
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then i get paid
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probably another 20 to 30 days later so
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the first thing we did to differentiate
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ourselves and find the
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best most qualified subcontractors was
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we paid our subcontractors on the same
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weekly rhythm as our employees now don’t
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get confused they are not
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employees they are subcontracting to
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break down all the things in between
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but instead of paying them every month
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and making them submit that invoice
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we paid them for everything they would
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have done this week we paid them the
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following week
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now if you’re doing snow removal you
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know this is important because cash flow
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is king especially if you get into a
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massive snow storm
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back to back to back as you can see in
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the northeast i mean you’d run 30 40 50
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maybe 60 thousand dollars a payroll
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uh in a couple days when these storm
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events hit
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so the first thing is we’re going to
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differentiate ourselves and have good
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cash flow in our company internally so
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we can pay our subcontractors
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on a weekly basis uh next thing
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is if we’re doing snow removal we want
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to
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inspect their equipment uh depending on
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the piece of equipment if it was a truck
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they would actually drive to our office
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it was a bigger piece of equipment such
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as a skid backhoe loader
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we require those pieces of equipment to
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be on site and those are dedicated
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pieces of equipment
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so in order to make sure they had the
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piece of equipment or the piece of
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equipment they were using was going to
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hit a certain threshold we would want to
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see the equipment we’d inspect the
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equipment
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when impossible we would ask for a list
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of references
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and inspect their jobs so one of our
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lawn care
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landscape maintenance subcontractors we
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went out and inspected there were
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um and we found out where their work was
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from them and some other ones we did
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some digging
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to make sure the quality of work they
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did was at par
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to what we did in our company
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now the main thing here is is when we do
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the subcontractor agreement we want to
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go
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and pay a lawyer we want legal
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assistance in here
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no matter your state if it looks it
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smells it feels like an employee the
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farther the state is concerned
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it’s an employee so we definitely want
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to make sure
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um that they’re running their own
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workman’s comp their insurance and they
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are indeed a subcontractor legally we
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don’t want to get in that gray area
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but once we’ve kind of solidified that
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we’re getting
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all the tax documents we need um and
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getting that set up for 10.99
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and then we’re going to a lawyer and
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having a
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contractual agreement built out that you
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are going to sign
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as the business and the subcontractor is
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also going to uh sign now
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inside that agreement should probably be
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a non-solicit
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a non-compete is probably not going to
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work but
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i don’t care if my subcontractor runs
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the biggest lawn care company or
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snow removal company in my market that
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doesn’t matter to me what i want in the
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legal agreement for the subcontractor is
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a non-solicit
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and a non-solicit particularly to the
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service
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the um properties that they are
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servicing
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and the other other properties they may
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have access to in their database
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so if they’re a snowplow subcontractor
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they may be backing up on other
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properties as well so we want to have
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that
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ironclad in a contract with a lawyer
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with a non-solicit
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up to the maximum years of probably five
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years after they stopped working with
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you
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very very important a lot of times if
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we’re not looking for subcontractors in
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july or august
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for this upcoming winner or if we’re
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looking firm in april and may when we
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need them last minute for landscape
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maintenance that’s too late we want to
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make sure we got our ducks in a row
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uh worst thing we could do is hire a
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subcontractor in a bind
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not have that legal agreement in place
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and they come back a month or two later
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and gut that account from you i’ve seen
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it it’s happened to us in the early days
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so those are things you want to be aware
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of
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so don’t make a short-term pain make you
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make a bad decision with the
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subcontractors where i’m going
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next thing is we want a quality control
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constraint built into the contractual
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agreement
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so if the job is not done to the
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predetermined spec
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to agree to we will call them or email
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them
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and with some certain timelines
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especially with the snow removal
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and ice conditions for our slip and fall
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litigation we want to get that
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subcontractor back now if the
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subcontractor
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is non-responsive in the agreed time
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especially for snow removal we may have
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to go out and clean up their mess also
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when there should be a predetermined
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hourly rate
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um if you have to fix it for them now i
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would suggest
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making it painful because the worst
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thing you want to do is after a huge
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snow event
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and we’ve got a quality issue where your
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whole team is going home and they’re
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sleeping and it’s the subcontractors job
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that needs to be fixed
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uh we go to column they don’t answer and
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they’re hibernating for the next two
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days
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uh that still needs to be fixed you’re
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still legally obligated to fix that slip
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and fall issue or melt or refreeze or
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whatever that
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is so we want to have some penalty built
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into that contractual agreement
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up front in addition to that
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um we also want to go in and really just
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define
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what the expectation is and with your
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lawyer
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around your state laws or subcontractor
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make sure you’re well within the
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reasoning of what a subcontract is
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versus an employee um so those are the
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main things and then the last thing
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especially
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uh in snow removal but really in
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landscape maintenance too
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is if they are a no-show so if the
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weather um triggers an event
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and they have to go out and plow salt
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and they know show and you can’t get a
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hold of them
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you still have to go out and maintain
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that property as a business owner that’s
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subcontracting that work out so
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what happens when your subcontractor
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literally uh goes off the radar and
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they’re nowhere to be seen
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and you’re scrambling to get the rest at
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work or you’re paying another sub to
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back them up
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um there needs to be a penalty for no
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show and i suggest making it
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double or triple whatever your hourly
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rate is make it a um
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an extreme penalty so they are
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really hesitant to turn their phone off
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after plowing
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and not answer those calls now in
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addition to that
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i like to have it as a basically
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end-to-ear retention
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payout for the subcontractor so this is
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all written in the contract but
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if you show up every time we have to
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plow every time you have to salt
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you’re you’re on time within the
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constraints of the service agreement
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that they’re subbing out to them
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there is a retention payout
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so maybe it’s 20 of the actual total
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value of the contract that you’re
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subbing out to them that is paid out
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april 1st or april 5th and it’s after
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they fix the turf damage
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uh can be the same thing fire is lawn
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care with some different uh
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flexibility as far as like pruning
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season or mulching season things like
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that
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but we want to set some executables in
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there because they’re not an employee
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you can’t tell them the exact day and
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time they have to do it but we can set
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some
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parameters in the work agreement in the
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contract that they have to meet
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and let’s make some penalties in there
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already up front so kind of like a
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divorce nobody thinks they’re gonna get
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divorced
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but i’ll tell you when you get divorced
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and the lawyers get involved
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um all bets are off it’s going to be uh
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a battle to the end so have the due
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diligence done up front where you’re
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both agreeing in it you’re bold
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amicable and you both like each other
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because eventually that relationship
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with that subcontractor
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could end we want to have that in that
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legal agreement now
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the final thing is make it easy for the
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subcontractor
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so if you’ve got a landscape maintenance
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let’s say a subcontractor for doing your
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mulching your pruning bed edging and
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weeding
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um that that subcontractor
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is probably not set up with the process
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and systems that you have we had a
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really really good subcontractor
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callahan
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um and obviously he wanted to estimate
10:07
all his own
10:08
jobs but our estimating process for
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square foot production rates and things
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like that were um
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pretty advanced and this gentleman was
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more pen and paper amazing contractor
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but
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uh we gave them access to service
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autopilot as a vendor
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and restricted down the user roles and
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rights and
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they gave us their pricing structure and
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we built subcontractor pricing within
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service autopilot
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so they never sent the estimate to the
10:34
consumer but they would actually create
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an estimate
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for the property and we’d automate all
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of that through the mobile app so they
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could use our on-site estimate form
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and create estimates quickly our tiering
10:44
would take them turn key
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turn key them after marking them up and
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then fire them out to the client
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but that was a two-fold thing so now we
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had a
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documented written quote from our
10:56
subcontractor in the system that they
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basically signed off on
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so if there was an ever a billing or um
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payment issue discrepancy that did not
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require the owner myself to have to jump
11:07
in and kind of mediate
11:08
whatever they had quoted us that we had
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in the system um that had him
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manipulated
11:12
was what we were paying on and that was
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part of the agreement
11:16
so using a product like service
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autopilot to create a uh
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an estimating tool for your
11:21
subcontractors if they don’t have a tool
11:23
of their own
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is an added benefit for sure um and then
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they could use the mobile
11:28
to track their jobs and then we knew
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where they were done and when they were
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done and completed
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that would trigger our billing and would
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automatic automatically trigger their
11:35
payment
11:36
a week in advance or then the following
11:39
week so
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they didn’t have to necessarily go in
11:41
and create invoices and do all that
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stuff that most subcontractors just
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don’t want to do
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so i suggest differentiating yourself
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create a process so it’s easy to pay
11:48
them every week and
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if you’re comfortable restricting down
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some access in a software like service
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autopilot give them access to the mobile
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or the desktop user um pay for it
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but give them the ability to automate
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and streamline their estimates for you
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as a subcontractor and that makes it a
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lot easier
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and will streamline your payment process
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internally as well so hopefully that’s
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helpful
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but main things is we differentiated by
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paying weekly so we pay the
12:15
last week this week um same
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same cadence and timing as a employee
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get the contract written by the lawyer
12:23
make sure they got the right equipment
12:24
and inspect their jobs previously before
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hiring them
12:27
penalties for no show make it clear and
12:29
transparent in the legal document
12:31
uh if the sub doesn’t fix it they would
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be paying you an hourly rate with a
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minimal
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and make sure the expectation is if it
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doesn’t meet these standards that
12:40
um are provided by the subcontractor
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agreement that they are legally
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responsible go fix that
12:46
and the non-solicit so they’re not
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listening and trying to get your clients
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um and then make it easy for them to do
12:52
estimates in a product like service
12:53
autopilot once you have that
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relationship but just make sure you lock
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down those rules and rights
12:57
as far as that vendor logging in there
12:59
um but by all means offer them the
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ability
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you can’t require it you can offer the
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ability for them to log in and uh
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use that mobile when they do that we
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know the job’s done we have any
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particular comments in there
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everything’s
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uh a streamlined workflow of
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communication and then we can build that
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out immediately
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and pay them the following week so
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comments questions drop below callahan’s
13:17
corner
13:17
you ask the questions we answer them
13:19
live right here on facebook and if you
13:21
haven’t checked it out
13:22
check out today’s episode of turfs up
13:24
radio carpool with mike callahan
13:26
and uh the host darren so look forward
13:29
to hopefully seeing you on the uh
13:30
recorded version that had a good time
13:31
today we’ll see you again tomorrow on
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callahan’s corner