Painting Company here: Employees or Subs?
My Texas painting company has been operating with employees since we started. We offer benefits, WC, of course pay taxes, etc. Employees are expensive. Strangely enough, I have also found employees often are harder to keep motivated without constant oversite - they get the work done, but often not as fast as subcontractors, so that cuts into profits as well. I understand that a lot of franchises, like That 1 Painter, and CertaPro, have managers who are employees, but their laborers are 1099 subcontractors they basically treat like employees. The subs wear the company shirts, and work to the company's standards and the managers pop in here and there to check on them. This way the company avoids paying taxes, benefits, etc., and if they are low on work, they have no obligation to keep paying their laborers. This all sounds really nice. With how expensive my labor force and overhead are, I find it hard to be competitive against other companies with a subcontractor business model and still remain profitable. Any other painting companies or similar businesses - what do you guys do?
Paying Subs
I'm starting a home services technician/handyman business in my local area for those really small jobs that general contractors don't typically take on. I'd like to initially hire subs for the work where I share a percentage of the profits with them per job. For those using this model, what percentage seems fair in terms of compensation 60/40, 50/50, or some other type of profit split?When do you know when to start hiring?
Here at GB Plumbing, we knew we should be starting to hire when we were working over 70 hours a week and not seeing any slow down with jobs coming in. We’re now up to 3 trucks, and are looking to hire again as things continue to keep growing and we want to continue to provide more services to our community.
