subcontracting

[cledry]

Not sure if this topic has been discussed. It can be a good way to increase your income.

Our company is commercial and some residential, we don't do automotive. So we have an agreement with a couple of locksmiths who are strictly automotive. The way it works is a customer calls us to have a key made for their vehicle, we quote a price (based on pricesheets supplied by the automotive locksmith), we add on a percentage, 25%. If the customer wants the job we dispatch the automotive subcontractor and he knows to add 25% to his normal rate. He gives a receipt from our company. Once a month these subcontractors come in and pay us our %. Becuase we don't do automotive and they don't do what we do it works out well.

They gain by having our advertising and we gain by not having to invest in the automotive end of things.

We also subcontract with a welder to weld gates, gateboxes etc. We add his normal rate to our quotes. We don't do any mark up on his prices, it just gives us the ability to bid jobs that require welding aluminium etc. If it is a minor thing we weld it ourselves.

We subcontract all our high voltage and fire alarm work without mark up. We subcontract our glass work with no mark up.

We occasionally will subcontract a fellow locksmith that just works on safes if it is something we cannot handle. He has the ability to move safes that weigh 5000 or 6000 pounds, plus he has more expertise in really complicated openings. We are limited to 2000 pounds in weight. We use his regular prices and he gives us 20%.

The only time we don't do this is if our contract with the customer specifies that no subcontractors may be used. We have a couple of customers that so stipulate.

[dll932]

I subbed for a local 'smith for several years, occasionally still do. He pays me $20/hr to do the stuff he hates (or doesn't know how) to do. He also passes work to other 'smiths and takes a cut sometimes.

[cledry]

I subbed for a local 'smith for several years, occasionally still do. He pays me $20/hr to do the stuff he hates (or doesn't know how) to do. He also passes work to other 'smiths and takes a cut sometimes.

If he charges $60 an hour that seems fair.

We sub work out that is not in our sphere of expertise and we then don't need to turn a customer away. There are days like today when we are running a man short, only 3 guys on the road today and we took in 23 jobs! So it helps to have a fellow locksmith as a subcontractor. You have to be sure of the person though that they will not try and steal your customers. This is why we mainly sub out work that we do not do. I gave the automotive subcontractor two jobs today, he made $160 we made $50 for basically doing nothing, and our commercial customer who leased the vehicles was happy.

That said, if we had an automotive locksmith with his own tools apply for a job we would hire him or her tomorrow!

[jeffmoss26]

I have a handful of alarm guys and electricians who will refer computer repair and phone wiring jobs to me, as they do not do that kind of work. It's a great way to grow a small business, and I try to refer people to them for the things I do not do.
I would not necessarily call it subcontracting since I bill the customer directly, and the customer ends up calling me in the future when they have a computer or phone problem.

Personally I have a few people I can call in if I have something in the field that I am unfamiliar with. In the phone world especially, most guys end up specializing in a handful of systems. I never know what I might run into!

I also have a good painter/drywall guy on call when I make a hole in the wrong place! He just patched a hole for me at a customer's office this past week. In that case I pay him for my mistake