5 Tips to Effectively Manage Sub Contractors... | DYB Coach

5 Tips to Effectively Manage Sub Contractors…

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5 Tips to Effectively Manage Subs by Ryan Anderson

 

Hey it’s Ryan Anderson, I’m a painting contractor in the Dallas-Fort Worth area. This is my third full campaign as a painting contractor.

 

Before I was a painting contractor I was a planning controller for Georgia Pacific and some various other companies before that. But what I want to do today on this video blog is share with you five tips that I think will help you manage subs.

 

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If you use subs there are benefits and pros and cons to using subs and not using subs, and using employees. So we’ve been pretty successful with subs. I want to give you my tips on you can be successful with your subs as well.

 

So when I first started my business I was blind. I used a sub model but I didn’t really know how to find or keep or attract good subs. In fact, I didn’t even know what it looked like to prep a job properly.

 

So I was really shooting from the head. I remember the very first sub I ever found, I use in my very first project. His name was Hallow Andro.

 

He was a good painter actually. I saw him painting a house in my neighborhood and I stopped and talked to him. And we ended up working on a small media room project.

 

We arranged to meet before the job about 20 minutes before and go over the scope of the project. I had sent him a work order prior, so he knew the scope, he knew the pay, everything.

 

We show up, it was my very first job I was really nervous. Mostly about someone not showing up and just kind of making me look bad. Well the guy showed up we walked the job.

 

And we showed him what we were doing that was the client. And we were in the media room itself and it was a two coat job wall ceilings and trim. It was like going from like a beige to a brown, like a dark brown. It was a Turkish coffee was the color.

 

And in front of the client, the guy said, well this is going to take two coats. And I said I know that’s why I quoted you two coats. He said, no you didn’t, and this was in front of the client.

 

And I was not happy, so I took him outside and he said he was going to need more money to paint the room.

 

And I was really, really upset because I was fully transparent with this guy, what we were going to do. So this is a bad story. The guy wanted more money after we started, and me on the hook and he had the leverage.

 

He knew he had the leverage at this point. So I agreed to give him a $100 more dollars. He painted the room, he did a really good job actually.
And it came down to payment I paid him what I had originally agreed to pay him, and I fired him and I said was never going to use him again.

 

So that was a bad experience.

 

But these 5 tips are going to help you to avoid that bad experience. And so here are my five tips to effectively manage painting subs.

 

The first one, probably, I don’t know if it’s the most important. But to the painter, it’s really important that they get paid weekly no matter what.

 

A lot of guys that use subs will pay them when they get paid. And I don’t do that I pay them every week for the work that they have done, whether or not I’ve gotten paid.

And usually we’ve been paid but on a job; we pay every Friday. So on the job, this week if I painted a house and it’s a full week in a full interior project and it would take Monday to Saturday, even though I didn’t get paid and the job not done on Friday, I will still pay them for that entire job on a Friday.

 

And I do that every single time. Because if I don’t pay them it’s not good and if I don’t get paid, it’s really not their fault. That’s my fault, so I take care of my painters and I pay them every week, every Friday.

 

There are exceptions sometimes where if we start a job on Monday and it’s a two-week job I won’t pay him for the whole thing the first Friday, I’ll pay him half or something like that.

 

Give him some money to cover his expenses and I’ll him the rest when we are done. But most of our work is a one week stuff and I will pay them every single Friday.

 

The next thing that is really important is, I called them individual job agreements. They are basically a contract for every single project. And they lay out very detailed and I make them sign every single one of them.

 

And what’s in there is the price they are going to get paid for the job, lets them know that they are required to provide their own tools and own sundries and I will provide all the paint. Lets them know what happens if there is damage done to the client’s home.

 

They are responsible to fix that stuff. In fact, I make them sign a contract that states that they provide a tier warranty on their work.

 

And so that’s how I get around paying a sub to do the job twice basically. If we have to go back and do a warranty work, if I still have that sub working with me I will have them go back and do it for free. I won’t get charged for it.

 

I may have to pay for some product or something. But the labor portion they cover that. And I also layout no competition. They can’t compete with me in the neighborhood or around that house they are painting.

 

So they can’t go around and solicit themselves for work. They solicit my company all they want and they are wearing my shirts. And sometimes they have stickers in the van of my magnets in their vans.

 

But individual job agreements are very important because it lays the expectations out and they are signing a contract. And they know up front what the price is that they are going to get paid for that job and it also let them know what I’m getting paid for the job.

 

Because I don’t want them to feel like I’m screwing them over and they are not getting their cut. And so I show the price of the project, not all guys do that. It’s never a perfect answer but for me that seems to work the best.

 

The other thing that’s really important with subs, man once you find a good one or a good subs you want to keep him busy. And so the way I look at my business is I look at providing for my people first.

 

And then if I provide for them I know I’m taken care of. So I always try to keep my guys busy and the ones that I have I want to keep them around. And so I do everything I can to keep those guys busy.

 

Another thing that I like to do, I’ll buy lunch for them every once in a while. I make them feel like they are a part of a family, really. I have a crew that has been with me almost two years now or about two years. And they’ve done work at my personal home.

 

And they feel like they are a part of my family. My kids know them, know their names. They know my kids, they know my wife. So we try to keep a close knit relationship. So that they feel like they are a part of the team. And so treating them fair is really important. And you lose some control of subs a little bit because IRS regulations require you to provide or you can’t tell them what to do basically.

 

And so there is a lot of grey area with that. But my guys know what the expectations are, and walk every job with them to make sure or I check up on them to make sure that they are doing a good job. And they know I’m going to be there.

 

So treat them fair., and probably the most important thing that I think you need to do with these guys,

 

the fifth tip is going to be, be consistent.

 

So if you say, at the front of this whole thing, like that gentleman that I was referring to earlier…Andro. I fired him but let’s just say that I would have given him more money. And I would have paid him that money and I would have kept him on.

 

The expectation would have been set that he could do that in every single project. So he would ask for more money every time. And I’ve had the happened with other painters too. I’ve had guys take advantage of me.

 

They know they have the leverage when they are at the job site and they are doing the work and I’m a nice guy. I like to take care of my people.

 

But I had a guy by the name of Mario that would always take advantage of me at the front end when I first started. And he would always get more money out of me.

 

I found that the best way to manage that is just to be consistent and to say, no. You signed for this amount of money for this job and that’s what it’s going to be.

 

And I use to have a lot of problems with guys wanting more money. But ever since I implemented this consistent policy with them, letting them know that, that’s the number and that’s all you are going to get, I never really have any problems with that anymore.

 

Now sometimes I’m not perfect, I’ll miss a bid and a guy, he says hey, this isn’t enough money. It’s not every time, it’s once in a blue moon this will happen and I’ll throw him a bone. And you know, I eat that because I do mistakes sometimes.

 

And when they bring it out and it’s a legitimate concern I will compensate them for that.

 

One last thing, I guess this is more like six tips to managing your subs properly of effectively would be managing the IRS part of this.

 

I have been told by my CPA’s to get w nines every single year from your guys if you use them across different years, you need to get W9’s from them every single year to make sure all the information is updated and to make sure their EIN or social security number,

 

whatever it is that they are using, and that you are using to pay them with, make sure that’s all updated. Make sure their mailing address is updated and phone numbers and contact information.

 

So those are my five, maybe six tips to managing subs effectively.

 

I hope that if you are out there and you use subs, I hope that some of this will help you manage your subs more effectively and that you can have a better experience subs. Again my name is Ryan Anderson. I’m a painting contract out at the Fort Worth-Dallas area.

 

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