Starting a trades business but sub contractors do the work?

[chrislaforest]

@velaut Yeah but middlemen never understand how shit works. My drywall guy knows better than to hold up my schedule since he employs a second tier sub. Just be prepared to eat shit if things go south because if your field crew is dishonest and you manage money poorly, it’s your ass I’m suing

 

[becomingabeliever]

@velaut I do this, but we provide the services across a broad geography and do B2B. Build relationships with subs by giving them access to work they would never get and meeting them in person. Customers would rather hire one contractor to do many projects then manage separate local contractors. Take 20-30% profit.

 

[velaut]

@becomingabeliever Does that mean you also increase prices by 20-30%, which makes you a little more expensive?

 

[becomingabeliever]

@velaut Not necessarily, there are many ways to get a better price from subs. Pay faster, provide already won projects with their price so less estimating/bidding costs, no sales/marketing costs so less overhead on our projects, etc

 

[tinytaytay]

@becomingabeliever 20-30% profit is dirt

 

[newmove]

@velaut That's basically what a general contractor does. It might be a steep learning curve if you're not at least kinda familiar with various trades and that kinda work. And depending on location and the types of jobs, it can be more of a logistical hassle. Things like permits, licensing, bonding.

 

[lisafab]

@velaut No idea on your background, but if your not trade qualified, or we’ll versed in project management you will lose money faster than you make it… how will you quote if you can’t do the work? Say I ask you now to quote a 3000mmx4000mm deck 1500mm above gl.

How quickly can you quote a couple of reasonable options?

Let alone renovations?

The model your talking about is called being a primary contractor. It’s how all major developments work. They usually work off like 3-7% margins. Some jobs might get as high as 20% but it gets eaten into fast.

 

[velaut]

@lisafab Very good point

 

[lisafab]

@velaut Not to be rude, I’m a project engineer. Haha this model is my day job.

 

[lisafab]

But, why not go off on a tangent. How can you make money connecting trades to leads?

Can you get a job rundown from the customer in writing, then you deal with the trades get quotes pick a suitable tradie and manage the work… in exchange you offer a service fee. Basically a project manager for extremely small projects.

Every idea is great and there is something within it, you just need to evolve your idea until it becomes something that works in reality.

 

[613jono]

@velaut Please don’t listen to most of these people commenting. Seems they don’t know what they’re talking about and likely have no experience in the matter.

You can subcontract out any work, regardless of size or value. One of my first side hustles was creating logos, I just subbed the projects out to someone who knows how to use photoshop (I don’t) and profit the difference.

I’ve got years of experience in the construction sector, most companies already do this, big and small. I’d recommend starting small and offering one service like dry lining or painting. You’d also want to make sure your subby knows what they’re doing. Customer shouldn’t care about what brand comes and does the work, as long as it’s done for the agreed price. You are also completely liable for customer service so if anything goes wrong, you bet you’re gonna have to deal with it.

 

[velaut]

@613jono Thank you for this answer.

How do you prevent the law reclassifying subbies as employees? I wrote it on another comment but if i start a painting company and just sub it out, at what point would the subbies be classed as employees?

 

[613jono]

@velaut

Good luck

 

[613jono]

@velaut Sure. Go for it. I mean you’ll find out prettt quick you better know what the fuck your doing but I’m sure it’s easy to figure out along the way