A director at my largest commercial account recently took a new position managing the cleaning of 185 facilities in 19 states. He has approached me about possibly getting the carpets cleaned in some (if not all) of these facilities.
Naturally I would have to use subcontractors in other states. As I have never done this I'm wondering what I would have to go through to do it?
Do I need to get some type of contract drawn up by a lawyer?
What tax pitfalls will I face doing business in multiple states? (obviously I need to talk to my accountant about this and also get 1099's on every sub ) but any early warning advice?
Any other issues I need to be aware of?

Where/who would I go to for advice on this? Hate to spend thousands on a lawyer who doesn't know crap!
We just had a brief phone conversation about it and will be speaking in more detail next week and I'd like to be somewhat knowledgeable prior to the discussion. ANY ADVICE appreciated!

BTW I've already given two referrals from this board and they worked out great these are mainly hallways and lobbies Avg Facility is 40k sq ft according to him and either I will be doing the subcontract or referring cleaners cause he likes our method. Thanks

Because you are in a different state subbing the job, you would at the very least want a 2 year no compete clause from date of last service, drawn up that would be signed and notarized by each contractor you hire BEFORE you give them any work. This will help protect you from a sub that would do the job once and then try and steal the account locally.

I have done sub work for a couple of janitorial companies and as a Sub I would want something in writing that says who is hiring me, Who is paying me, when I will be paid for the work,and how much I will be paid for every job.

Many subs will want to be paid imediately. Or as soon as the work is signed off on. Especially sinc eyou are out of town.

If you are doing the paying you would then have to 1099 each contractor that you have paid more then $600 to.

You would want to talk to an accountant but to my understanding you would only be taxed on your profit from the transaction not on the moneys you pay the contractor.

You will also want to demnd that they have at least a general insurance policy of $1mil/$2mil and a surety bond of no less then $10000. You will want a copy of there bond and Insurance that lists your company and your client as insured.

There are probably a few things that I am forgetting. But off the top of my head those are the larger issues.

Don't forget workers comp. laws vary from state to state as well be sure to have sub provide you with a copy if they have employees. I know this is true in Calif.

Al Taylor

Wiegh the meaning and look not at the words.

If you want to keep good subs, don't be a skinflint on the pay. Don't try to charge $0.21 and pay $0.05. At the same time, don't pay $0.18 and charge $0.21. If you keep the pay fair you can keep good subs and good subs aren't falling out of the trees.

You might want to specify cleaning methods. If your juice gets you the contract you don't want someone using the cheapest juice they can find losing the contract for you.

Good luck, that could be a real cash cow for you.

I'll throw my hat into the ring if you need a sub in my area 48430

Most of the sub Work I have done has been an 80% 20% split. I did do some work at that was 70/30. But not much.

How many of those places were either trying to find people or had shoddy work? They have to be able to do more than just cover costs or you won't be able to keep top people. I might do a job that covers cost to keep a good crew running, but, I'd be looking for something else. OTOH, if I can make more than cost and I don't have to market the job and the checks arrive when they are scheduled I'd stay around as long as the job was running.

I've been on both sides of the sub deal. There is money for both parties. The person with their name on the line should get most of the cash. If you are fair you won't go wrong.

Both places subbed about 90% of all there carpet jobs to me. Because it was good business for them. They have other services that they supply to make their money.

The expense for the Contractor for jobs like this is on the front end. And that expense is finding good reliable subs. After that network is found then there are very few expenses for the contractor.

What you are forgetting George, is that other then making sure they are using a good cleaner they have no cost to the job. There only expense is a stamp and cutting the check. maybe a small amount of follow up also. The money made by the contractor in a situation like this is made in volume that of work that is getting done.

What I would do in a situation like this once I found the contractors and confirm they use the chems and methods that I am needing. Get all the paperwork filled out and sent in. Is e-mail a work order for the job that needs to be done. Explaining price and what not. Then have the cleaner take before during and after pictures. That way the cleaner knows that he cant cut corners. The contractor sees what was done and the Customer can get copies of if any problems arise.

But in all reality there is another consideration to take into account by percentage also.

If Rick is a great sales person and he is able to get customers to pay $.25 a sf or more in places like Phoenix. Then most encap and even HWE cleaners arnt going to have an issue with cleaning for $.15 a sf. or for 60%

But if he is only pricing at $.10 a sf it will be tough to talk a cleaner into doing the work for 80% unless the average job is 8000sf or so. and there are 3 - 4 jobs a month. So it is all relative.

Heres My Phone # 1-888-DRY-N-2HRS

Al Taylor

Wiegh the meaning and look not at the words.

Hey Rick, count me in if you have any work in Florida - in particular east of Orlando, and as north as Jacksonville or southern Georgia - Got the Cimexes, Whittaker GLS's and the TM all warmed up and ready!

Thanks

Joe DeSouza

Marinercommercial.com

888-447-2003

Joe
You are right about the no compete clause all it'll take is one person to screw up the whole thing
up until now it's been done by the individual places and they haven't been doing it. The plan is to get them on schedule cleanings via corp and me. But your right someones gonna get greedy and try to go direct even though it'll end meaning less money as my money will come from the corp. The cleaners will get what they normally charge for cleaning facilities this size

Al
Workmens comp might end up being the deal killer as most O/O probably don't have it and the size of the jobs Avg 40k sq ft will require help
But if the sub thing doesn't work out I'm gonna try to get them to hire me as a consultant

George
I'm not trying to become an MM or screw cleaners like the coupon subs do. The price will be in the ranges discussed normally on this board if someone is way out of wack price wise then we'll look for someone else. I'm not taking a percent from the cleaner my part will come from the corp level at the acct.

Jeff/Al/Joe
Either way sub or me just working as a consultant I'll put you down

Put me down if you have anything in the Mpls/St. Paul, MN area.

Thanks,

Fred

Would workmans comp be a deal killer even if the sub has help? I know in Alabama and North Carolina, w/c is not required unless the sub has 5 or more employees - so even if the sub has help, w/c may not be an issue.

Just a thought.

David Edwards
Carpets To Go
New Bern, NC

If the sub doesn't have workmans comp and someone gets hurt the subcontractor is liable by law. So it is required from all I've read

Some management companies such as those like who Rick is dealing with, require all w/c insurance from subs and will have you fill out a waiver form in accordance with the workers comp laws of the state.

This is to reassure their clients and investors that they are not dealing with illegal enterprises or those not able to provide proper insurance and documentation. They will also ask to be added as additional insured and certificate holder as well.

Al Taylor

Wiegh the meaning and look not at the words.

Workman's Comp, bonding, and insurance requirements also help weed out the companies that don't have the resources to handle a bigger job. Joe Sixpack with a 17" 175, a carpet brush, and a bottle of encap juice probably won't have the insurance, WC, and bonding; they also probably wouldn't be able to get the chems, equipment, and people to do a 40k sq ft job over a weekend.

Me, I have the credit line to buy and a list of folks to call if I need more than I have equipment to cover. It's nice to have a little group of friendly competitors who help each other out on big jobs. :D

I didn't think you would, but, as I said, I've been on both sides and I always erred on the side of good subs. One of my favorite (and fairest) tactics was the first job at a reduced rate in case I had to fix it, then pay well.

Workman's Comp, insurance, and bonding requirements are great for my business. So many single truck operations don't carry the minimums. Just about all my work requires it and back ground checks on all employees.

I think you'll do well. If I can get a signed contract I'm willing to work for a little less to have a "sure thing" locked in for cash flow. I think most thinking people would agree.

I'm not saying show anyone what the contract is for. All I am saying is give the cleaner a fair price. Your costs are low, but, YOUR rep is on the line. If you get $0.21 or $0.45 and are paying $0.15 nobody is going to call you a skin flint jerk. Some of use would line up to get the local contracts. One of the MMM groups here thinks we should be tickled to death to clean for them at $0.05 in cube farms.

Before and after pics are a great idea. Makes things easier for everyone.

I'm sure you won't have a problem finding subs. You seem to have a good plan started and a way to hold everyone accountable for their actions. The only things left are the ability to pay in a reasonable time and getting paperwork out and back to everyone involved. Nothing that can't be readily solved.

I hope you get all of it at a good price and keep it until you are sick of the money.

If your account should require cleaning in North East Ohio or near Buffalo NY, we are available to assist.


Thanks,
Rich McDonald
330-573-6904
www.bmscleaning.com

Rick,
If you remember you and i talk sometime back its the same type of set up

If you need someone in my area I'm always willing to do commercial work. I'm pretty much a have van will travel type of guy. Knoxville and about a 100 mile radius if the job is big enough.

I am interested in the work here in Southern Idaho (Twin Falls, Pocatello, Idaho Falls if available.

Thank You,

Brandon Jones
Clean America
208-961-1845