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huggytree
06-20-2009, 11:35 AM
i had another call to repair a waterheater today...i dont know how...its a steady customer...he's begging me to send a tech. or give him a name...i have a service friend but i know he's booked 2 weeks out right now.

i need to find a large service company to send out on these jobs under my company name...is there any legal issues w/ this? do i need a contract w/ them?

what % should i tack on to their labor rate? 10%?

Paul Elliott
06-20-2009, 12:59 PM
HT, here are some similar situations with which I have personal experience.

CASE #1: I had a client who did tile installation and repairs for whom we designed several very successful ad campaigns. He had moved to Phoenix with no contacts. In 2 months he had too much work.

At first he hired good, but underworked tilers, bid their jobs and handed the jobs off to them giving them 90% of the bid. Soon, he had too much work to even do the bidding of the jobs.

In 5-6 months he was only generating the jobs and giving them to his tiler contacts for 10% of their gross. By that time he was only doing the ads, taking the orders, and handing the jobs off making about 4 times what he could make as a tiler. This was also better, since he could do the whole thing from his den! I don't know whether he ever went back to laying tile.

CASE #2: A landscape and lawn maintenance company got regular calls to deal with lawn and landscape pests. My client didn't want to get the certifications or set up for pest control, so he found a man who had such a business he could trust.

My client would offer pest control as an additional service to his accounts. When he generated a pest control account, he would hand it off to his source who would make the call wearing the landscape maintenance company's shirts and caps with a landscape company magnetic sign on his truck.

The pest control guy would try to upsell the homeowner to a comprehensive pest control program which he did fairly successfully. The pest control guy would give the landscape guy 10% of his gross on the lawn pests and any upsells he was able to make.

This was recurring income in perpetuity for the landscape guy and a guaranteed stream of qualified contacts and business for the pest control guy.

In both cases both parties--the finders and the vendors--signed a Letter of Agreement. LOAs are just as enforceable as contracts but written in common language allowing the agreeing parties to use their own wording instead of needing a lawyer to write it. Of course, your wording still needs to be precise with correct English.

If you wish, PM me and I'll email you some sample LOA forms I use and which you are welcome to modify.

Paul

Spider
06-20-2009, 06:01 PM
Joint ventures are excellent ways to increase business and can even BE the business, as in Paul's example with the tiler. However, I believe there are certain public health safety issues with which one must be careful in the pest control and plumbing situation.

There is no public health safety issue with floor tiling, I think. In the case of pest control, there are some serious chemicals in use and proper local authority lisenses would be required by the applicator - the pest control company. The landscaper may well be liable for any misapplication by the pest control company, but full responsibility may finally rest with the lisenseholder, the pest control company.

The public health aspect of the plumbing situation would likely be different. If HT is the lisensed plumber and his joint venture partner screws up, whether he also is a lisensed plumber or not, HT will be fully liable for any mishaps. And a Letter of Agreement would probably not exempt HT from liability.

So, it would not be wise, I think, to work the plumbing joint venture on such an arm's-length arrangement as the tiling work or even the pest control applications.

The concept of joint ventures is good, and I'm sure the issues I have raised can be overcome, but they do need to be addressed.

huggytree
06-20-2009, 06:50 PM
i made a phone call today to a company i know does quality work. Ive heard many good things about them and met the owner on one occasion.

i left a message on the answering machine...it was probably a mistake..it should have been a face to face meeting to throw the idea at him...well see how hungry he is right now....i only want them to do the things i dont....if they see the water heater is bad, then they need to contact me to replace it...i want them just to do what i cant and not what i can.

Paul Elliott
07-07-2009, 09:42 PM
i only want them to do the things i dont....if they see the water heater is bad, then they need to contact me to replace it...i want them just to do what i cant and not what i can.

Be sure your Letter of Agreement covers those things in sufficient detail that you both understand the terms well.

Paul

huggytree
07-08-2009, 06:55 AM
ive been sending people to a 'drain cleaner only' on a weekly basis now for a while..he does a great job...no complaints...

he says i should tack on $40 and bill for the drain cleaning myself...i have 2 concerns.

1. being overpriced and losing future plumbing work (he's already higher than most drain cleaners)...adding $40 more could make him double what the lowest priced guys are.
2. having problems w/ him in the future and having it reflect back on me...all for $120-200 extra per month. It will cost me extra office time and stress of collecting $$(right now i get paid before i leave the house on homeowner jobs..no collecting stress)

i vote no right now....too little return vs potential problems...He does give my cards out, but hasnt gotten me anything yet....ive gotten him 15-20 jobs...

any opinions?

Spider
07-08-2009, 10:45 AM
Yes -- continue being a good friend and pass the work to him. You don't want to do this work. There is little potantial income and not worth your time and effort.

So what if he doesn't get any work for you. Just be a good friend and give the referral.

What goes around, comes around!

Dan Furman
07-08-2009, 01:32 PM
What goes around, comes around!

Totally live my life this way. Big believer in karma (or, more accurately, your actions generally dictate your outcomes.)