They expect you to send your choice of expert to do the work and are trusting that you have a top person qualified to do this work he needs done.
Your business and the repeat calls and business with this customer for this and other services you later offer them, will be
tied to their satisfaction with the present work. Therefore the quality of your subcontractors will have a big bearing on your repeat business.
You need an understanding with the subcontractors that they represent they are working for and book work thru you. They are NOT to ever offer their services direct, and if you ever hear of that offered they are no longer on your referral list.
Therefore, your choice of subcontractor to send to do the work for you, should be A1- good. If not 100% drop them off the list and find another.
It is NOT house painting, it is not selling this or that, it is not coming out and installing this or fixing that
You business is handling and filling the customer’s needs.
You may have many different businesses that serve many different needs and the work or installation or whatever gets farmed out and done by someone else.
Your customer having his stump removed may not know that you also have tree trimming and removal. (done by a different contractor.) You are developing a relationship on this one job which will get your foot in the door and if this work was satisfactory they will refer you to others and contact you for other services because that you are reliable, reasonable and counted on to deliver what you say.
You do not mark up your subcontractors prices and add your cut on. The rate to be charged the customer is at or under the local ongoing competitive rate,
You tell the contractor what you pay for his doing the work. You do not ask him for a price.
Here is what the contractor gets from you and what you do to earn your cut. You come up with a steady stream of business for them. (this is what you are good at)
Each different service may require a different percentage for you, depending on what you do, what risks you assume etc
You keep the subcontracting booked up and working. He has to do no advertising or promotion etc. he knows you send him business.
He has no collection worries or waits.
You collect from the customer and he has no credit card problems, or bad checks, no customers that are "not pays," he has no billing expense and sit and wait for his money etc. You pay him almost instantly if he desires it.
If you do this right, charge a reasonable percentage or he gets enough business anyway and income, he may switch all of his work to you and let you handle his regular customers, in effect you handle all his office work problems and overhead that he gets from direct referred business and he can have you handle all that and he then is free to concentrate on just doing the job.
Do you do all this pay and collect work?
yes or no, you can do it yourself, or subcontract it out to some superb person out of work and home able to do this for you at their convenience for a fraction of what they got paid having to go off to work to do it. How do you find them? Easy. Craigslist. You can have a stack of applications in 12 hours.
They do not necessarily have to be in your town or even your country. They are a subcontractor, not an employee. They handle all this or whatever part you want to farm out, at a fixed cost per transaction.
If there is no business, they are paid nothing.
You pay them regularly, weekly for example, using PayPal or xoom. You talk to them free with cell, or Skype, no matter where they may be.
Email or Instant Messaging, all free.
Different businesses you will get a different cut of the transaction from a third to 15%.
The work or product has to be to the customer’s satisfaction and customer pays you. If there is a dispute the subcontractor pays. (Customer is always right) If the customer is a no pay you are out.. Not the contractor. We will show you how to avoid this.
Prices are very competitive these days and the price you quote have to be well under the big brick and mortar firms. (Those that have business store fronts etc.)
..........and the customers pay you whatever is determined a fair percentage for that type of business.
This is the you in Control of the Customer.
System, You may need to carry insurance etc. to protect you in case the sub contractor accidentally burns the house down and they go after you. You will need to consider this and then you may want to go where you are merely a referring agent. You send the contractor and he does the work and he collects and sends you a check. Subsequent works will likely wind up booked direct with the contactor.
You will be cut out of the loop.
There is more than one way to do this, and nothing is set in cement. We are not a controlling franchise, we just supply information and ideas, and you set up your own business policies and procedures.
The customer has little leverage with a contractor. If they do a bad job or over charge, and tick off the customer, they do not care because he likely was never going to do business with them again.
However, if the customer books thru you,
the contractor knows if he screws over the customer, he will never get another nickels worth of business from you, a steady source so he HAS TO TREAT THE CUSTOMER RIGHT ..... The customer pays no more thru you likely then the contractor would charge direct. Therefore there is every reason if the customer realizes this to always book his work thru you, even if the contractors try to cut you out of the loop.
Next: More on the Sub Contractor Relationship
More on developing customers long term...
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