Fairly making money by sub-contracting - New Business Startup

[puffy]

So far job-hunting sucks but I'm always trying. My background is really web development/programming and business but I love electrical installation with a passion but never seem to landed that job so I've decided to give the business side of me another go.

This post is no way advertising but rather to get your deep opinion on the subject.

I am building a website, an interactive one. It will no way, shape or form be similar to ratedpeople. I've used it, never liked it. So let us not discuss that business here. About the website/ mobile app:

1. User logs in
2. User selects house type etc
3. User tells us what needs to be doing etc
4. Maybe pictures / video of the areas etc - this is important to the business

This business will solely sub-contract the job out and we would take 10% - 15% off the profit (when all expenses removed) would that be reasonable? The difficulty I face is that most jobs require an onsite quote. Since I know technology very will, I can use a beautiful app for tradesman. It has killer features where the sub-contractor would do the site visit and finalise the quote based on the customer price range. The customer will select their budget so we know for sure that he/she would give the go ahead once we stick to the price range or give them some wow factor if we go above their budget.


The trust relationship

Sub-contractors will know the actual cost of the project that's why we say the business will take 10% - 15% as we will process all transaction online and with handy technologies which you will use and those techs cost money. Is the percentage range fair?

About the business

We advertise heavily. We give you t-shirts and mobile app. You invoice us after the job is completed. You get paid by BACs. We would minus CIS or you pay your own. Legal way of doing things will be reviewed. We have our own guys to sign off work. We make you happy, you make us happy. Win, win.

 

[puffy]

If you go for the first option you would have no idea of the actual materials used and stand to get ripped off left right and centre. The only way to verify materials used would be to make regular site visits which would insult the contractor, or install it yourself.
If you go for the second option you are not bypassing the awkwardness of a job, you are becoming the awkwardness in a job.

It's a non starting business model. I'm sorry it's not what you want to hear, but at the end of the day it's just another middleman service, and probably the most poorly thought out idea for one at that.

True. This was the only bit I could not get my head around. So I guess back to the drawing board.

 

[Spoon]

and probably the most poorly thought out idea for one at that.

Don't sit on the fence Andy, say what you mean....

 

[Andy78]

True. This was the only bit I could not get my head around. So I guess back to the drawing board.

Looking back through your posts you are also assuming you can take your percentage from the money left after materials. I would be taking my wages off that too to make sure I'm not losing out. so in effect you are looking to end up with 5% of 5% of the total cost of the job. If the job over runs and makes no profit does that mean you don't get paid ?

The only way you are going to get electricians to give up any portion of their hard earned is to offer value for money that advertising and other methods of revenue creation currently don't. That's going to be hard to beat.

I currently spend £0 on promotion and am as busy as I can manage right now. I do promote myself, but through services that do not charge. Any paid for service would need to virtually guarantee work on a money back basis to make me even consider them.

 

[puffy]

Looking back through your posts you are also assuming you can take your percentage from the money left after materials. I would be taking my wages off that too to make sure I'm not losing out. so in effect you are looking to end up with 5% of 5% of the total cost of the job. If the job over runs and makes no profit does that mean you don't get paid ?

Well if a job cost 2K and materials 1.5K then Ill take 5% of £500 so you get 95% of £500.

 

[Octopus]

Ahhh the customer may have more than one quotes so I'm eliminating just to have my quote.

that does not make sense!

 

[Andy78]

Well if a job cost 2K and materials 1.5K then Ill take 5% of £500 so you get 95% of £500.

Exactly. You're not taking into account wages. The profit on a job is what's left after deductions including wages and overheads. That could be as little as 5% of the total price of the job.

 

[puffy]

that does not make sense!

What makes no sense?? You come on my site select few things then presented with £3K for argument sake. You can walk away but if you request a visit know that it will cost £3 - £4K and you are happy, then you basically got the job. Dont you all see that? You already know the cost so you invite me over to make sure its not more than £4K.

The calculation will be based on feedback so it's not a case where I guess the cost.

 

[hightower]

Easy. Ask customer these first:

• What is the business
• What are your targeted audience
• Are your selling products/services or just displaying static content
• Budget

So I still don't understand what are you trying to get across. If I have a web development business and someone asks that question, my website would extract those information already.

My point is this (and I'm truly flabbergasted you're so ignorant to it):

You can't quote for a website design without the full details. You can't quote for an electrical installation without the full details. The difference between these? Maybe you can work out the full details for a web design by pinging a few emails backwards and forwards. Try that with electrics and you're in for a shock, as the full details can't be uncovered until tests have been carried out, and in some cases the floorboards are up.

But I don't know, maybe you have money to burn, and after seeing your 'head-up-your-dark-place' responses I think all you're wanting from us is to have us say "what a great idea, sign me up".

 

[puffy]

I was just riding along the energy-wave in this post and I see all of your points. Electrics quotes are different from all other; I got it. I'll have a rethink and find a different approach towards this.

 

[sean_ork]

What's to stop the homeowner doing a deal direct with your "subby" to cut you out of the deal ?

The homeowner will get a cheaper job.

 

[puffy]

What's to stop the homeowner doing a deal direct with your "subby" to cut you out of the deal ?

The homeowner will get a cheaper job.

I have that covered already.

 

[sean_ork]

I have that covered already.

Remind me please.

 

[Octopus]

I have that covered already.

Really? I doubt that VERY much

 

[Spoon]

Well if a job cost 2K and materials 1.5K then Ill take 5% of £500 so you get 95% of £500.

So you are intending to take 5% off the electricians wage and not just from the profits now..... This is sounding better and better.....

 

[Andy78]

The last mickey taker that instilled the same sense of irkedness in me was a local sparky. He gave me a call one evening and told me he was expanding and had loads more work than he could handle so needed a decent spark to subby the work out to.
"Yep I'd probably be able to help you a out a bit there" I said "I charge £26/hour"
"Hmmm yeah so there's the problem see I could only really afford to pay £16 and was hoping to pay you less"
"This is on a self employed basis right ?"
"Yes"
"Sorry mate but you'll have to scrape the barrel at that price"
"But I want a decent job doing to protect my reputation and don't want the idiots"
"Then you are going to have to pay the rates.... you must know a self employed electrician's overheads ?"
"Yeah I know but I can't do it any other way if I want to make my £10/hour on you"

I gave the moron some choice advice about the way he conducts himself on the phone, and that the next bloke he insults may take more offence than me, directly at his face.