Because after I finished a job I used him on, he went back and did more work for the h.o. without asking me. I was mad at the h.o. for hiring my sub behind my back, but madder at the sub for doing it. I let him know, and he apologized and said he wasn’t thinking. But that was after he said I finished my contract, and so what did it matter what happened after I left?
I told him as the GC it was my job and my client. If she had hired him to work on another house thats one thing, but this was my project. If he had called me, chances are I would have told him to take it and don’t worry about it – but he didn’t call me, and that’s what ticked me off.
I asked him if it was cool with him if, after he finished a job and got paid, I hired his helper to come out and do a few extras on the same job. Not the same as doing a side job for the neighbor, he admitted.
CaliforniaRemodelingContractor.com
Replies
Right on! He failed to abide the unwriten code of conduct. Personally, I thin it should be written into every contract and every subcontract. He should give you a cut. Not that it's the money, but the principal. That is your customer!
Customers, on the other hand, shouldn't be expected to know any better.
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Cheap Tools at MyToolbox.net
See some of my work at AWorkOfWood.com
Although I agree with you and would start looking for someone else, I am not surprised. It is hard to find people who follow basic business manners. And I am the same, I would have given my ok, but to not call would p$ss me off. And I think once I see that they are no longer reliable to me as a business partner. DanT
Apparently some here would disagree. But I don't like subs who give their price to the homeowner when I ask them for a bid. And I don't like subs who hand out their business cards to the homeowner and tell them to call them direct next time.
I had a carpet sub tell a homeowner on a job I was bidding, 'come by my showroom and you can look at samples, and I can give you the prices.' I pulled him aside, and asked, How can you give prices to my customer on my job?
I turned the job over to him, said do it without me, but I don't use him anymore. I still use the same carpet company, but requested that I deal with another salesman. Not just for that reason alone, there was some other stuff, but that was a big no-no, in my book.View Image “Good work costs much more than poor imitation or factory product” – Charles GreeneCaliforniaRemodelingContractor.com
"I turned the job over to him, said do it without me, but I don't use him anymore."
And I concure. If you chose to not want to follow my game plan when working with me then you simply won't be a team member of mine. And the few subs I use realize I am far more valuable to there lively hood over the long haul then any one client. So if you chose to handle things as Sphere a few other believe is ok it is fine with me. But don't expect me to use your services any longer. Simple as that really.
My flooring sub for instance gets 20-30k worth of work from me each year for the last 5 years. I doubt any one client (or two) would provide that. So pick you direction and I will pick mine. DanT
That's funny ... I had a GC once say to me "Remember- you work for me!" Not true.
An independent contractor is just that - independent. I may have a GC as a customer on a particular job ... but he has no obligation, or expectation, to keep me busy 24/7/365. He has NO claim to my services beyond that job. Stories circulate about GM/Ford/ some big firm breaking suppliers by first making them dependent on the big guy for all their work - then putting the squeeze on. Whether the details of the stories are correct, or not, the same lesson is still valid: A good business plan will ensure that the firm can survive the loss of any one customer. Or, as the old fable has it: don't put all your eggs in one basket! As for the GC I referred to at the start of this post ... sure, I see little of him these days. Oh, we have worked together - sometimes that's not up to him to decide - but we both get on quite well without the other.
"An independent contractor is just that - independent. I may have a GC as a customer on a particular job ... but he has no obligation, or expectation, to keep me busy 24/7/365. He has NO claim to my services beyond that job."Your "Lone Ranger" mentality is typical in the construction industry; particularly in the smaller residential remodeling fields. Your resistance to the synergy that is critical to efficiently deal with the multitude of challenges in the remodeling industry is a huge reason why so many companies (on both sides of the GC and Sub) equation fail to become strong, vibrant and profitable. I've been a sub and over the years, my fierce independence was my own worst enemy. I didn't see it that way till I was much older. Now I know. However, even in my earliest years, no one had to tell me who my boss was. It was ALWAYS the guy who signed the check and I was always ready to do my service and find a different guy that signed my check. Whether you want to admit it or not, you DO work for that guy and the sooner you understand it, the smoother your business will be. Do good service for HIM and you won't have to worry about what basket your eggs are in. Some will be in his, and some will be in every other nest you've visited in the proper spirit of harmony and co-operation. I'm operating as the Advanced Construction Group. That name honors and gives respect to every different sub trade that graces the jobsite. I sell my GC services and explain to every homeowner that I make my money by supplying the subtrades with a service: I find them jobs and in return, they offer me wholesale prices because they don't have to put in the marketing and sales fees into their proposals. I'm getting the benefits of wholesale prices becuause of the volume discount. That's my pay. My wholesale prices allow me to offer the same electrical services to a homeowner that they would receive if they dealt direct because my sub trades would not offer the same discounted prices to someone that only does one job per year with them.When you view the business partnership from that point of view (that's my point of view and Dan's too) then you can see that there is no benefit from dealing direct. There shouldn't be. If I found out that the sub was not giving me a discount and I was receiving the same price that a one time homeowner got, I'd find another source for my subcontract needs! This is just business 101. It's not about ethics. It's not about getting the homeowner the lowest price on the planet. It's just about building a synergetic relationship amongst many different trades, then watching each other's backs. Bob's next test date: 12/10/07
Jimyou've come a long way babygood read
Barry E-Remodeler
I'm not quite sure I understand the your point. That working relationships can benefit everyone involved can't be denied. An example of this was where a tree trimmer dropped a branch, and damaged a roof. Having a long-standing relationship with a roofer, the roof was repaired in no time - and everyone went home happy. However, let's extend this same scenario. The tree trimmer was called by the GC, who was there to remove / relocate a drive, build a new garage, and convert the old garage to living space. In the course of this project, it was necessary to remove a tree.
Job is completed, and everyone is happy. The OP is asserting that if, six months later, the customer calls that same tree trimmer to remove a different tree, that the tree trimmer needs to have the customer go through the GC. This is where I disagree. The GC has no relationship with the customer at that point, the work is completely unrelated, and a GC is not required. The fact is, it is the GC who needs the tree trimmer in this instance. The GC license does not apply to trades that have specialty licenses; and there's a reason the trimmer has his number in the phone book. Now, if the GC wants to serve an apprenticeship, get the experience, and fulfil all the requirements to get his own license ... more power to him.
The OP is asserting that if, six months later, the customer calls that same tree trimmer to remove a different tree, that the tree trimmer needs to have the customer go through the GC.
This is where I disagree. The GC has no relationship with the customer at that point, the work is completely unrelated, and a GC is not required.
Apparently you have reading comprehension difficulties. What you stated is 180 deg. apart from the OP.
I haven't checked your profile but I doubt that you have much if any experience as a real General Contractor.
The job may have been "finished", but the paint was barely dry on the walls and the electrician is stiking up business deals with the HO on the SAME project. You have any doubt that she had allready spoken to him perhaps BEFORE the job was complete??
Let's move down the road six months or a year. The HO is experienceing some electrical problems in the new project area of the house. She calls the GC as she should and he comes out and sees work done that was not included in the scope of the contract.
Now what? What do you think Huck is going to tell her?
All it would have taken is a call.
It's called communication where I'm from.
Eric[email protected]
I stand by my original statement even though we are talking about tree trimming now. I wouldn't expect to find the same type of commitment between a tree trimmer and a GC because their number of contractual relationships would be minimal and incidental to most remodeling projects. But, if a GC/Sub relationship has developed as a result of multiple projects, then , yes, I do think the sub should remember who's hand has fed him.Remember....you need to think about the above statement while acknowledging that there is a wholesale/retail pricing arrangement between the GC and Sub. I doubt that arrangement would occur if the GC only calls on the tree trimmer once a year. The reason that wholesale pricing is extended to GC is because of volume. One tree per year does not constitute volume. Therefore, there wouldn't be the same type of financial arrangement that I see necessary to set the disputed policy. That financial arrangement would be in place with an Electrician because that particular trade is on "incidental" to the overall General Contracting business. It is a major component. Therefore, if the player (you), wants to play, then you are going to have to understand that I, the GC, gets to make up some of he rules. Like Dan said; you don't have to agree with the policy and I, the GC don't have to use your services anymore. If I'm contracting with you and allowing you to make 10% of your year and you want to jeopardize that to make .01% of your year...so be it. It's a free country. The lack of understanding about those basic numbers are typically why
so many small remodeling subcontractors never flourish. There is a lot of biting the hand that feeds you in the residential remodeling arena and theres also a lot of one man shops that don't understand why they should have two price points: wholesale and retail. They'll sell wholesale to anyone wanting $25 worth of services, then try to sell retail to a custom builder trying to put together pricing on a 5000 sf custom home. The sub reasons that "the builder can afford it" forgetting that the builder needs to markup everything too. Without wholesale pricing the product gets too expensive and the other builder, who is working with wiser subs gets the work. Bob's next test date: 12/10/07
Ah, yes ... the 'bone tossed,' the promise of future work. I am first to admit that among the major factors that affect my price is the nature of the customer: a customer already proven to provide regular work, and payment on time, will get a better price. Pay attention to this, GC's! For it is in payment that many GC's drop the ball. I expect timely payment - not to have my bill put off, simply because the customer is 'holding back,' as the result of a dispute with the painter. While, according to our law, the subs are to get paid BEFORE the GC takes his fee, in practice many seem to save paying the subs for last. There is also the matter of there being more than one GC, or there being no need for a GC. GC's are generally needed where there are more than three trades at work; if the job calls for but one trade, there's no more need to call in a GC than there is to bring in a dentist.
After all, a GC has but a few functions: See everyone gets paid, schedule the trades, pick up the trash, provide a toilet; provide the necessary utilities. It's amazing how few have grasped this concept. When I spend the job tripping over trash, have to carry a bucket in the truck, watching trades trip over / be delayed by each other, having to resolve issues on my own ... I have to wonder what I'm paying the GC for. That's what I'm doing when I discount your price: I'm paying you.
1% of my work? Sure .... in your dreams. We're back to that same basic business model again. If you think I'll let things develop so that any one customer has me 'over a barrel' ... well, that's simply poor business. Next thing, you'll try dictating prices and terms. Nice try.
If a GC is going to get upset when I "work solo," he's really going to love it when I work for his competitor. Look I care not what you guys think of each other ... I have my job to do. I'm sure not going to sit in my office waiting for the phone to ring. Just as you have the choice of many subs, I have the choice of many GC's ... or the option of working solo ... why would I give up the one thing that keeps everyone honest? Finally, there is the concept of the 'prime contractor.' Where a job is primarily one trade, that very trade is allowed to act as the GC. Yup, that's right ... I get to bring in multiple trades. A good example of this might be where a plumber, replacing a drain line, might need to bring in other contractors to move wires, fix the lawn, and pour some concrete. Finally, there's again that issue of "agreeing with my policy." Again - if there is such a policy, such an agreement, it needs to be declared up front, in the contract agreement. Inventing rules after the fact is no way to do things. Sure, you might decide "I'll never use that sub again." Don't forget, though, that the sub is also likely to be in a position to steer folks to a GC .... whose number do you think he'll give out? Since that sub is likely to have worked for several GC's, the GC needs to remember that he's "auditioning for future work" as well. As you might guess, a "my way or the highway" attitude isn't going to help me remember your phone number! So ... one can load themselves down with all manner of excess baggage .... or, they can happily take things one job at a time, and try to do their best for the final customer. In the end, that's who really pays the bills.
Don't forget, though, that the sub is also likely to be in a position to steer folks to a GC ....
In all my years of doing business with this sub, he has never steered one job my way. On the other hand, he told me recently that 2007 was his most profitable year since he went into business, because of me. He worked for me the entire year, on a large project that ran from Dec. 2006 to Dec. 2007.View Image “Good work costs much more than poor imitation or factory product” – Charles GreeneCaliforniaRemodelingContractor.com
Thanks for the lecture on what a good GC should do to make you happy. It's a nice diatribe, but off point. I think that's been hashed out in 86 different threads already. Do a search."Finally, there's again that issue of "agreeing with my policy." Again - if there is such a policy, such an agreement, it needs to be declared up front, in the contract agreement. Inventing rules after the fact is no way to do things."Some of the norms of networking aren't contained in the contract agreement. Does the contract agreement have to spell out that you're not to interrogate the client about their financing arrangements? Does the contract have to tell you that you are not to solicit their just turned 18 year old daughter to work for your brother's strip club? Does the contract have to tell you that your not to solicit donations for your KKK chapter? All those are "legal" but they don't pass the common sense test. I suppose we can wind this discussion up with your suggestion that an agreement needs to be explained. I think most sophisticated business people understand the true nature and function of networks, networking and synergy and it's clearly evident that many of the trades just don't see it that way. I myself ended up terminating a short lived relationship with a roofing sub when I found him discussing his wholesale pricing with my client. I was guilty of not having a written contract with him regarding his behavior WHEN HE CAME OUT TO GIVE ME A PROPOSAL! I recently had a contract carpenter talking about the wholesale prices on sticks of lumber to the customer. Again...I was guilty of not writing a 3000 page contract with him. Some things are just understood in business and some things need to be hashed out. Huck made the call and the guy apologized and admitted his mistake. It sounds like if he made the call with you, you'd be defensive and never admit the mistake. I don't know about Huck, but I know about me. I would continue contracting with the sub that made the simple apology and we'd probably discuss future strategies about calls like these in a friendly manner. Life would go on. I would not continue a relationship with anyone that got defensive about the issue because I'm a believer in the old saying "you can lead a horse to water, but you can't make him drink." Anyone who couldn't immediately understand my needs, wants, and desires as a GC would be dropped from the vendor list. We could part friends....there's no reason for animosity...just two different philosophies abou what a GC/Sub relationship is all about. Bob's next test date: 12/10/07
Another good post. DanT
I'm on a roll...it won't last long though LOL.I'm probably a lot more in tune with this topic because I've been thrust into the GC arena in a new town and have had to develop new relationships with EVERY trade. It's been an eyeopening experience. I am now to the point that I discuss these issues in my preamble. I'm feeling the guy out before I talk about a specific job. I'm figuring out if they are open to a long term relationship based on my selling their services at retail prices, while giving me wholesale pricing. I explain that I have a full time salesperson and we need that type of arrangement to keep our pricing competitive, yet still pay all the bills. I ask them if they are interested in simply making their money on the job sites and are willing to let us sell their services. I feel them out to find out if they truly understand that they are wearing ten hats and their retail pricing must account for that. I then show them why we BOTH can benefit if they allow us to wear some of their hats and get paid for it. My reasons are simple: if you are on the jobsite full time, you probably don't have someone selling your services full time and you'll have to work two jobs to get that job filled. A simple wholesale discount can put us to work for them! That essentially is the GC/Sub relationship. Not everyone will agree of see it that way. Like you, I'm okay with that. I'll simply partner up with someone else that is like minded. No hard feelings. It's just a business decision that each of us freely choose to make. Bob's next test date: 12/10/07
We only use subs on jobs where license or size of scope is an issue. So I am not a typical GC by any means. And we are remodelers so rarely does the new construction part of it come into play.
But again, I really don't care how someone else runs their show. If it aligns with my thinking then great but if not, have a nice day. We recently used an HVAC sub on a small commercial remodel. I explained (not in writing I might add) how cleanliness on a daily basis is a big deal to me. He apperantly didn't get it.
We finished the job together and I did my usual pay as soon as you are done deal. He was really happy and all of his equipment works well. He called recently to ask if anything else was in the pipeline and I explained (for the 4th time) about cleanliness and the mess from the last job. He hem hawed around but had no real reason of course other than the "we were real busy right then". So I said we wouldn't be able to use him in the future. I am sure he won't recomend us now. Oh well. DanT
Your "Lone Ranger" mentality is typical in the construction industry; particularly in the smaller residential remodeling fields. Your resistance to the synergy that is critical to efficiently deal with the multitude of challenges in the remodeling industry is a huge reason why so many companies (on both sides of the GC and Sub) equation fail to become strong, vibrant and profitable.
Geesus Blue.............for a guy who has self diagnosed himself with ADD, OCD and the whole host of "I can't sit still" illness's, your sure hit the nail square on the head.
Well spoken, well thought out.
Eric[email protected]
Well spoken, well thought out.
He copied it from a book!
Sorry blue, just having fun, it was well stated.
He's taking lessons from Diesel Pig.
We should all be as literate![email protected]
We should all be as literate!
There is no hope for me in that department.
Doug
"
That's funny ... I had a GC once say to me "Remember- you work for me!" Not true."
Well, I am glad to be of entertainment value to you on a holiday weekend.
Certainly you are an independent contractor and I certainly am not interested in ok'ing your work 24/7/365. But if you are going to scalp, annoy, insult, irritate, etc. me or the clients that I develope then I will not work with you. And we will remain independent contractors independently.
I really don't care how you want to think or run your business. I am just saying if part of your livelyhood is going through me then I get to make the rules because I am paying for the privilige. But you certainly are free to find someone else to work with as am I free to find someone I want to work with. DanT
"Rules" That's what is comes down to, doesn't it. We have a name for the rules we agree to ... we call that list a 'contract.' He fulfilled his contract with you. The job was complete. He had no further obligation to you. Where's the beef? Or, do you wish to assert an undefined authority over his future business? Forget the red herrings of annoy, harass, etc ... the OP was limited to the specific example of the electrician being called by the homeowner after the job with the GC was finished, on a completely unrelated project. The GC felt he was entitled to at least granting 'permission,' maybe even 'his cut.' Who does he think he is, Don Carleone? Now, if there was a violation of some agreement, then the GC ought not have any trouble convincing 12 strangers that the sub owes him money ... or the contractors' board that there was a breach of ethics. If the GC can't make those cases - he doesn't have a case.
"He fulfilled his contract with you. The job was complete. He had no further obligation to you. Where's the beef?"
Where is your beef? I said if you didn't like my rules go play somewhere else. As you did with the GC in your example.
You can be mad if you want, emotional if you like. No red herring. My game, my rules. Don't like them? Fine, we won't work together.
You mentioned freedom earlier. Freedom is also being allowed to set the ground rules that you want to play by when you pay.
It's all about the money friend, not the winning or losing. DanT
Edited 5/25/2008 7:46 pm ET by DanT
Whole house remodel... Customer called sparky direct to change/add items. You have a customer issue. There is a reason they didn't call you and your electrician didn't tell you.
I think I see where the problem is.....
The project was completed correct? Was this was on something unrelated to the project you did?
Well, you can tell by the way I use my walk, I'm a woman's man, no time to talk. .
http://www.youtube.com/watch?v=Dy3LM5_-i1Q&feature=related
The project was completed correct? Was this was on something unrelated to the project you did?
It was a whole house remodel. It was related to the project I did.View Image “Good work costs much more than poor imitation or factory product” – Charles GreeneCaliforniaRemodelingContractor.com
Not sure why, as you didn't mention that it was related to your work in the original post, but I had assumed that. Maybe I'm psychic?
Anyway, my post (#2) was under that assumtion. If it was not related to your work I would not have agreed.
Then again, now that you and elec. have reached an understanding, there's no need in letting this little incident get in the way of a productive working relationship.
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Cheap Tools at MyToolbox.netSee some of my work at AWorkOfWood.com
Edited 5/25/2008 11:02 am by Ted W.
We're in muddy water here. What stage was the project in? I'm reading that it was completed. The only way the guy would be wrong in my book is if he advised the homeowner to hold off on some things related to your project so he could undercut you when you were done.
If you were a hundred percent done with the project and the electrician did some work later down the road then there isn't any ties to you at all. Unless you have some sort of street pimp mentality that the guy is your hoe and you own a piece of everything he does.
Now in the case of the carpet guy. I would have knocked him out on the front porch as soon as we walked out the door.
Well, you can tell by the way I use my walk, I'm a woman's man, no time to talk. .
http://www.youtube.com/watch?v=Dy3LM5_-i1Q&feature=related
Unless you have some sort of street pimp mentality that the guy is your hoe and you own a piece of everything he does.
Very funny.
I posted this already, but I'll repeat it. Whole house remodel. I'm finished, and paid. Within days, the homeowner is making more changes, adding extras, and he's out there doing the work without talking with me about it.View Image “Good work costs much more than poor imitation or factory product” – Charles GreeneCaliforniaRemodelingContractor.com
Did you part on good terms ??
Did you part on good terms ??
Yes, we did. But I should probably take him out to lunch, just to make sure there's no hard feelings. I do however feel it would be wise to build a working relationship with some other elec.'s - he's been my main guy for years now.View Image “Good work costs much more than poor imitation or factory product” – Charles GreeneCaliforniaRemodelingContractor.com
I meant the HO. Any issues at the end that would have led to his calling Sparky direcrly ??
Any issues at the end that would have led to his calling Sparky direcrly ??
No. Just overspent (against my advice), and trying to shave a buck.View Image “Good work costs much more than poor imitation or factory product” – Charles GreeneCaliforniaRemodelingContractor.com
It wasn't until I read your response to Ponytl below that I totaly understood the situation. It wasn't really clarified in your original post. Yes you do have a right in this instance to be upset. Good clear communication in your first post would have cleared this up.
Key his truck.
Well, you can tell by the way I use my walk, I'm a woman's man, no time to talk. .
http://www.youtube.com/watch?v=Dy3LM5_-i1Q&feature=related
Exactly, man you have a way with words. (G)Spheramid Enterprises Architectural Woodworks
Repairs, Remodeling, Restorations
New book alert; Eckhart Tolle "A new earth"
A must read.
Blue said it: This is not about 'legal'. It is about ethical.
If I spend the time and trouble and money to develop a client, and then I bring in a sub to supply materials and/or services I can't or prefer not to supply myself, I expect that sub to respect my investment in client development.
If he does not, maybe I can't sue him successfully but I can sure as hell cut him off at the knees and force him to pay for his own friggin client developement costs. I'm going out in about half an hour to walk a few neighbourhoods shaking the bushes for new clients. If my electrician and my plumber and my tile supplier and my tin guy wanna come with me, and help pay for the gas and shoeleather and flyers and website and all the rest of it, well, maybe that would change things. But somehow, I don't think they're gonna do that.
I had a very good relationship with a plumber for many years. A couple of years ago, I took a very good client of long standing into his showroom to show her floor models of some bathroom appliances she'd been considering in brochure pics I'd provided.
But my bud the plumber had 'grown' his business over the years, and was busy up in the office so I got stuck with the retail saleswoman manning the showroom desk. She literally grabbed my client by the arm and pooh-poohed everything I'd brought her in to look at. 'Oh, you don't want that; take a look at this....'
Thirty minutes later, my client had paid the saleswoman directly for the whole bathroom suite. (And it actually cost her more than it would have if I'd bought it, because I get 10% off retail and only charge 5% markup. One of the small benefits of doing business with me....)
I saw the client back outside to her car, and waited while she drove away. Then I went back inside and upstairs to the office to have a few words with the saleswoman's boss....
She doesn't work there anymore.
But it works both ways, too. And sometimes it gets really muddled.
One of my clients had a pre-existing relationship with a welder/metal fabricator whom I also use as a sub (he'd fabricated a wrought-iron spiral staircase for them and installed it). The HO brought me in a year later to do a major exterior remod of the place. I needed some wrought-iron gates for the new windows and sliders I was installing, so I submitted the specs to the fabricator and waited for the quote. But I didn't get it.
He called the client and submitted the quote to her. She accepted it and paid him direct for the materials. Neither of them thought much about it, apparently. (I'd told him the client's name so he'd know which house the stuff was for, so maybe he thought I meant him to go direct with her.)
At some point before I was aware of what had happened, the fabricator must have realised there was a sticky ethical dilemma, because he called me and asked in a very embarrassed tone of voice if I wanted to install the gates he'd sold directly to the client.
Ooooooo-kay. Whadda I do? Key his truck? (Gunner, you da man....)
Nope. Bite the bullet. The fabricator and I had both invested in developing that client independently. The fact he and I also had an existing relationship doesn't erase that fact.
Dinosaur
How now, Mighty Sauron, that thou art not broughtlow by this? For thine evil pales before that whichfoolish men call Justice....
This whole thing has to do with the unwritten rules of conduct between gc, sub, employee.. the team of builders who get the job done. I'm a small fry in a big vat, so if a sub (or employee) went around my back there would be nothing I could do short of not hire them again, as if they really care. Basically, it would be inconsequential and I'd do more harm to myself than anyone else trying to fight it.
However, with larger builders in a smaller market, that may not be quite the case. Word gets out, this or that sub gets a reputation for stealing clients. Next thing you know, that sub is having trouble finding work with the bigger contractors.
I'm not sure where I'm going with this. Maybe just trying to put together the real dynamics of how this work, personal feelings set aside. I guess what it really boils down to is enforcabilty. We all have to keep it in perspective. If one has no motive to follow the unwritten rules, we have to assume he or she won't. We have to ask ourselves honestly just how much influence we really carry in the building market, and set our expectations accordingly. That way we're less likely to be disappointed when conflicts arise, and less likely to shoot ourselves in the foot by disassociating with otherwise perfectly good subs.
Some time ago I subbed some hourly work for a remodeling contractor. When we first talked on the phone he mentioned that he's reluctant because I might steal work from him. I pointed out that if he runs his business well, that shouldn't even be an issue. Optionally, he could hire sh*tty subs that nobody else would hire. That's the reality. --------------------------------------------------------
Cheap Tools at MyToolbox.netSee some of my work at AWorkOfWood.com
Nope. Bite the bullet. The fabricator and I had both invested in developing that client independently. The fact he and I also had an existing relationship doesn't erase that fact.
Just key one door panel
If it was a whole house remodel, then why wasn't what your electrician worked on independently covered in the remodel specs?Leon
Is he an Independant Contractor that sells, and does other work for HO's and Contractors?
Your work was done with this HO?
He did nothing wrong, they could have looked anyone up in the book, they asked him, he did it. Whats he owe you?
Spheramid Enterprises Architectural Woodworks
Repairs, Remodeling, Restorations
New book alert; Eckhart Tolle "A new earth"
A must read.
the marketing and time he took in cultivating these clients.A courtesy call would be the least he could do.
Barry E-Remodeler
He did nothing wrong, they could have looked anyone up in the book, they asked him, he did it. Whats he owe you?
Nothing. Nor do I owe him anything, like a phone call to bid my next job. Even tho' he has been my electrician on all my work for several years.
So its cool with you, if you hire a helper, and later drive by your completed job to find your helper working for the homeowner on the roof you did?View Image “Good work costs much more than poor imitation or factory product” – Charles GreeneCaliforniaRemodelingContractor.com
Yep. Unless he was voiding a warrantee on MY work, or altering it in way that would cause me to have to repair it.Spheramid Enterprises Architectural Woodworks
Repairs, Remodeling, Restorations
New book alert; Eckhart Tolle "A new earth"
A must read.
I still have not read the whole thread, but I am unclear on this situation...He was a sub and not an employee, right?And you did say that your project was completed, right?
Welcome to the Taunton University of Knowledge FHB Campus at Breaktime. where ... Excellence is its own reward!
Technically it's not wrong but Dan hit the nail on the head when he called him a fallen "business partner". I see this as a case of "biting the hand that feeds you". The original GC has expended much money and time to find a lead and turn it into a client. There is a loyalty there that should be understood. Turn the tables: how would the electrician feel if the client had called the GC and the GC sent out a different electrician? Yes, it's "legal" but is that the type of professional business network you want to be a part of? Bob's next test date: 12/10/07
Well put. DanT
I have to agree with Huck, After he brought the sub "to the party", the sub should have asked for an OK from Huck before doing additional work (even if unrelated to the origonal job)
You are right on the money, don't listen to anyone that suggests differently.
We are loyal to our subs and them to us. Mostly our clients ask us first, but sometimes don't and the subs NEVER consider doing 'extra' work for OUR clients without notifying us.
If it's less the $500.00 or so we usually let them deal directly and we receive the appreciation back in prompt attention to our future needs.
If it's a fair size job then it goes through the office.
[email protected]
We are loyal to our subs and them to us
I don't call another elec. unless this guy passes on the job first. And on a job he's the elec. on, I won't install a light fixture myself unless he passes on it first. Been that way for several years now.View Image “Good work costs much more than poor imitation or factory product” – Charles GreeneCaliforniaRemodelingContractor.com
Huck
You guys must play by different rules.
I agree with Sphere, he didn't do anything wrong according to Iowa rules of fair conduct.
How long does the client belong to you?
Would you have been mad if it was 1 year or 5 years?
What is the cut off point?
I really like your posts, but here in Iowa we wouldn't know what you were talking about.
Rich
My Iowa rules of fair conduct are different than yours
Barry E-Remodeler
Therein lies your malady, life ain't fair.Spheramid Enterprises Architectural Woodworks
Repairs, Remodeling, Restorations
New book alert; Eckhart Tolle "A new earth"
A must read.
no maladies here, well except for that little rash thinglife's as fair as ya want to make it, knew that a lot of years ago.
Barry E-Remodeler
Calamine lotion, great for them lil rashes..LOLSpheramid Enterprises Architectural Woodworks
Repairs, Remodeling, Restorations
New book alert; Eckhart Tolle "A new earth"
A must read.
dude... nail on the head...
LIFE AIN"T FAIR... "fair comes to town once a year... get your corndogs and cotton candy then my child... cause you won't see it again til next year"
first thing i think when someone complains about "fair" is even my 4yo knows more than you.... pretty sure if life was "fair" i'd look like brad pitt... and be hung like john holmes.... lets see if that gets past those who monitor us... :) it should at least make it to famous breaktime quotes... luka where ru?
p
Edited 5/25/2008 11:28 am ET by ponytl
That's Pete you're talking about , right ???
How long does the client belong to you?
Until the project is finished. He's out there doing change orders on my project, without me. So in your territory, its ok with the gc if the subs hand out business cards to the homeowners, and say, "Hey, save some money, call me direct next time"?
View Image “Good work costs much more than poor imitation or factory product” – Charles GreeneCaliforniaRemodelingContractor.com
Edited 5/25/2008 10:51 am by Huck
Now that is different, you didn't say origainally it was a C.O. work, on a current build, you implied you were gone and this was after the completed job .
Now, I'd probably have a chat w/both parties.Spheramid Enterprises Architectural Woodworks
Repairs, Remodeling, Restorations
New book alert; Eckhart Tolle "A new earth"
A must read.
Now it's all clear.
Different circumstance, if the project is complete, are you ok with him working directly for the homeowner for purely electrical work and not calling you?
You're first post read like that situation to me.
Huck
I thought the project was finished.
Rich
"its ok with the gc if the subs hand out business cards to the homeowners, and say, "Hey, save some money, call me direct next time"?"Who contacted whom? The HO or the electrician initiate this change order?
Welcome to the Taunton University of Knowledge FHB Campus at Breaktime. where ... Excellence is its own reward!
I believe the GC and client relationship lasts forever. If the GC and sub trade are still partnering, then the act of bidding direct puts the GC in an unfavorable position, expecially if the homeowner decides to contact the GC for bids on the same work. That is possible isn't it? I've been a sub for several decade and I have always protected the GC that I was working for. I always understood the pecking order and I always did my best to build up the top dog and send him any information that might be helpful. I did the same for my mentor and employer when the builder came direct to me and offered me some service work "on the side". Yes, I could have bid that but I was cutting my bosses throat, wasn't I? It would be "legal" in any state, but legality isn't the issue here.Then, the question of wholesale and retail pricing comes into play. If the sub is truly offering wholesale pricing to the GC then the entire process would be very easy to settle with a phone call. Here's how it would go if I was the electrician. "Hey Mr GC. Mrs Jones just called and wants a couple circuits run. It sounds like it will be a $200 job. Do you want me to handle it direct and just mark it up something for you, or do you want to send your estimator out there?." I'd reply "Just mark it up to your normal retail prices and don't bother worrying about sending me any thing. Thanks for the call."The thing I don't want is him giving away my wholesale prices to past clients who would then draw a bead on my markup strategy, which is proprietary information. If the wholesale sub can't see the importance of that, I won't deal with him. Bob's next test date: 12/10/07
Was this a completed project with an OP? If so, how long had you been gone when the elecrician went back?
If it's right after the OP was obtained and the electricians work was in the nature of "punch out" kind of stuff, he stepped over the line. But if it was new work I don't see anything wrong with it. For example, if the HO is living there amd decides to have some extra flourescent lighting in the garage, why should they call up the GC? They're going to call up an electrician anyway, why not someone who knows the job? Or, after seeing their clothes slowly turn brown in the washing machine the HO decides they would like a water filter system, why should they call you up instead of a plumber, maybe the guy who plumbed the house?
In a round about way, it can be looked on as a feather in your cap as obviously the HO is pleased with the electrical work in the house and the sub you lined up. If they got another electrician you might be asking "What the hells wrong with the my electricians work? Why wasn't he used?"
Runnerguy
Was this a completed project with an OP? If so, how long had you been gone when the elecrician went back?
It was a whole house remodel. I finished my work, got paid, and within days the homeowner was making changes, hiring the elec. to add some more lights.View Image “Good work costs much more than poor imitation or factory product” – Charles GreeneCaliforniaRemodelingContractor.com
Huck,
I think that pretty much everyone here feels that you where in the right, elec. was wrong. Especially now that you posted that the work the electrician did was in the scope of your original project.
What to do now? Do you feel that the electrician was genuine in his/her apology? Was it just a stupid move/ mistake on their part, or where they really trying to sneak one past you. What I'm wondering is if its worth losing this electrician over this one thing? Or are there other things that are making you uncomfortable with the electrician?
Next thing, do you have anything in your contracts ( both with H.O. and subs) that can prevent something like this happening in the future ( cant remember if you said anything about that).
Sorry to hear about this problem, it sucks!! Especially since you seem to be way above and beyond fair ( covering elec. for his underbid).
Live by the sword, die by the sword....choose your sword wisely.
do you have anything in your contracts ( both with H.O. and subs) that can prevent something like this happening in the future
Good point. No, I don't. I guess I should. Or at the very least, have a heart-to-heart with all my sub's, and let then know where I stand.
I believe his apology was sincere. He told me he had a brain lapse but I think its just that times are hard here right now, work is scarce, and he thought because I'm a 'nice guy' he could get away with it. He admitted he wouldn't do the same to the other GC's he works with (whom he said don't even allow him to talk with the customers), doesn't know why he didn't think of it with me.View Image “Good work costs much more than poor imitation or factory product” – Charles GreeneCaliforniaRemodelingContractor.com
I think a good talk with the sub is the best solution. You guys get to have an agreement and shake hands and you still have a good business relationship. I was once in a similar situation.
I had screwed up. One morning, the other framer came to me to have a talk but didn't get right to the point. His crew was already working and he had a cup of coffee in his hand. I had fired my two employees two weeks before and was behind schedule. The house was already sold, so the customer was pressuring the realtor to get me to finish (at the same time trying to get me to do a couple of major changes that were structurally stupid :).) So I said I had to get to work and left him sitting there. As the day went on I realized I should have had that chat.
I wish to this day that I had, not only for the business implications, but because I know I was wrong and could have fixed it right there.
do you have anything in your contracts ( both with H.O. and subs) that can prevent something like this happening in the future
Good point. No, I don't. I guess I should. Or at the very least, have a heart-to-heart with all my sub's, and let then know where I stand.
And maybe something with the clients also. They should be made aware of proper protocol also.
I guess some of this comes down to when/ where your job ended. Where is that fuzzy grey line drawn??!! I a starting point to look at this is will what was done have any effect on your warranty ( if you give one).
Live by the sword, die by the sword....choose your sword wisely.
"He admitted he wouldn't do the same to the other GC's he works with (whom he said don't even allow him to talk with the customers), doesn't know why he didn't think of it with me."Well, there you have it! He recognizes what it is, so what we think doesn't matter a dimes worth.
Welcome to the Taunton University of Knowledge FHB Campus at Breaktime. where ... Excellence is its own reward!
He recognizes what it is, so what we think doesn't matter a dimes worth.
So true! Just something to hash over with the gang at breaktime, I guess =)View Image “Good work costs much more than poor imitation or factory product” – Charles GreeneCaliforniaRemodelingContractor.com
If its something completely seperate from the project I brought them in for I dont really care. Last year we did a bathroom for a lady. When the tile guy finished she asked him to tile the porch. I didnt really see it as a big deal.
The electrician didn't ask you before he danced with your girl. ;-)
you buy some materials from your supplier... you notice they still have home depot stickers on them... at quite a mark-up from what you just paid...
next time you need said materials do you
A. call your suppier and ask permission to buy direct from home depot?
B. Keep buying from same supplier after all there is a code of conduct that you subscribe to
C. just go down to Home depot and buy said materials without thinking a thing about it
I know what i'd do... so call me a whore...
p
you buy some materials from your supplier... you notice they still have home depot stickers on them... at quite a mark-up from what you just paid...
next time you need said materials do you
A. call your suppier and ask permission to buy direct from home depot?
B. Keep buying from same supplier after all there is a code of conduct that you subscribe to
C. just go down to Home depot and buy said materials without thinking a thing about it
I know what i'd do... so call me a whore...
So, as a general contractor, you have a contract with your supplier to provide materials on a given job, but you would try to find his source, and see if they'll sell to you cheaper than he does (for the same job you contracted with him on), and that should be ok with him? View Image “Good work costs much more than poor imitation or factory product” – Charles GreeneCaliforniaRemodelingContractor.com
one you first said you were finished with the job.... next you said it was changes to the same job... at what point is it no longer your job? sorry but you make it sound as if they meet through you... you should profit from it...
yes i'd have issues if they deleted the scope of your work cutting out the sparky part and going dirrect or around you... but as you presented it... thats not what happened... you were finished and if they added to or changed something that has nothing to do with you...
So, as a general contractor, you have a contract with your supplier to provide materials on a given job, but you would try to find his source, and see if they'll sell to you cheaper than he does (for the same job you contracted with him on), and that should be ok with him?
yes.... without question.... if i paid him for the material we contracted for... then later i needed more of the same material for whatever job... expanding this one or another then yes i have no issues not paying his mark-up on the same materials i can buy from the same source... I don't even see an issue much less have one with it.... it's not like they hunted the guy down in a cloak of darkness with an evil plan....
when someone says "it's not about the money" then it's always about the money.... if there was no money involved there would be no issue.... IF there was a misunderstanding about how a light was hung and they contacted the same sparky and he went by on his own time and dime and fixed it free of charge... then this topic wouldn't exist... the fact that money changed hands and you didn't get any .... is exacly why we are talking about it.... someone profited and you didn't get your cut .... now you are po'd....
p
one you first said you were finished with the job.... next you said it was changes to the same job... at what point is it no longer your job? sorry but you make it sound as if they meet through you... you should profit from it...
Not sure where the line is drawn exactly, but I do know this one crossed a line in my mind. I was finished, and just got paid. He hadn't even received his final draw from me. When I called him and said Hey, I just got paid my final draw, where can we meet so I can give you your final draw, he said - At the same job, I'm working for the homeowner doing some extras.
I told him I wasn't happy about it. And when I paid him up, I explained in detail why it bothered me. I said if she hired him to work on another project, I wouldn't have a problem with it. But this was my project, and he should have run it by me. Just my feelings on it.View Image “Good work costs much more than poor imitation or factory product” – Charles GreeneCaliforniaRemodelingContractor.com
I told him I wasn't happy about it. And when I paid him up, I explained in detail why it bothered me. I said if she hired him to work on another project, I wouldn't have a problem with it. But this was my project, and he should have run it by me. Just my feelings on it.
I do understand your point... moral? man who is to say? sparky wasn't thinking...? sure seems like he didn't see an issue with it... just as a non thought... not as a screw you.... if i was you... it might have registered in my mind... but it wouldn't have bothered me enough for a second thought...but thats just me... as my cpa tells me "dude if they can't screw you they need to get out of the screw'n business..."
p
I'm just wondering what this other project would be that it would be acceptable for her to hire the sub? Maybe if she had another house.
But wouldn't that bring up the complaint that this customer's business was developed by Huck?
Hey! You're back! DanT
Here's my 2 cents on this subject...(Pause here for you all to roll yer eyes)Mr. Buck and Mr. Blue have it right.dont they always???BUTT the big problem here is a lack of communication..No one is telling anyone what to do do or not to do...the subs the GC the worker the HO the supplier the delivery man the mailman, none of them.what is happening is "you do what you want, BUT if you do what I don't like then I am gonna do what I NEED to do."everybody is free to deal with whomever they like, but you have to meet each others terms.or else there is no deal....
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"After the laws of Physics, everything else is opinion" -Neil deGrasse Tyson
.
.
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If Pasta and Antipasta meet is it the end of the Universe???
Exactly! There has to be a meeting of the minds. Without it, there is no synergy. Small synergy = small pocketbook for all. Bob's next test date: 12/10/07
Against my better judgment!
I think it would depend on the circumstances, but......
My customers usually develop some good personal relationships with my subs, and if it's a matter of putting in a few cans or adding a couple plugs and a dimmer switch, frankly, what I'd mark it up wouldn't be worth gettin into a whizzin contest over it. I'm comfortable knowing if the scope of what was being done required a gc, they'd call me, and honestly, for the aforementioned things, I'd just as soon not be bothered, nor do I want the responsibility of meeting the sparky, unlocking the door, making sure he doesn't let the cat out, etc. etc. for the hundred bucks or so I might have made.
Bing
Yes, my point exactly. Often, when I get calls for strictly electrical work, extras on my previous jobs, I'll turn them over to him directly. But not always. The call is mine to make, depending on circumstances. Sometimes, my markup on a small job is all the income I have that week. May not be much, but I do like to pay my bills whenever possible.View Image “Good work costs much more than poor imitation or factory product” – Charles GreeneCaliforniaRemodelingContractor.com
Some contractors do things differently than we do. My subs are not on my payroll. I have the customers deal with them directly other than on spec jobs. If I get burned or delayed on payment, my subs don't suffer because of me. I make all my money on my own work. I don't mark up or make anything on my subs. I've got plenty to worry about with my own stuff, I don't need any extra.
Beat it to fit / Paint it to match
I don't mark up or make anything on my subs.
Yeah, we definitely do things different here.View Image “Good work costs much more than poor imitation or factory product” – Charles GreeneCaliforniaRemodelingContractor.com
i agree with you 100% he was wrong !!! but on a positive note i believe people will start to stick together again !!! what has happened in your situation is something that was very rare years ago !! i think exsplaing this to him would be to your advantage tell him if this happens again you will very dissapointed ( meantime start looking for another electrician )
Sounds like you also would advocate monoplies with that kinda attitude.
The Ele and HO have every right to do anything they want AFTER Huck is outta the loop..whats so complex about it?Spheramid Enterprises Architectural Woodworks
Repairs, Remodeling, Restorations
New book alert; Eckhart Tolle "A new earth"
A must read.
Switch positions with the sub. If he was working for a HO doing a small job and they asked him about recomendations for a GC would it now be the electricians customer??? with any additional work run through him???
I sub for alot of GC's and easily 200 different homeowners per year. I've been doing this 20+ years.... Alot of people know me. I don't do big jobs and get asked all the time to recommend someone... Pull that BS with me and you wouldn't be considered to be mentioned except in a way you may not appriciate.
Not sure the intent of your post, so its hard to comment. I will say this, when the elec. underbid by 3k on this same job, I wrote him a check for 3k more than his bid.
And since you mentioned turn it around, OK - On a previous job (where I was the project manager), apartment conversion to townhomes, one of the elec's. employees got laid off when work slowed down...so he underbid to finish the remaining units. Owners went with the lower bid, against my recommendations. Elec. was pi$$ed off!! Why? He had been paid for the work he did.View Image “Good work costs much more than poor imitation or factory product” – Charles GreeneCaliforniaRemodelingContractor.com
I understand Huck did a fair business deal with the customer. Once his obligations are finished, the customer is free to choose anyone to do anything.
Who is worrying about fairness to the customer? Should the customer have to pay an extra fee to get a job done once the original project is built? That would be legally and morally unenforceable. It would be more like a kickback than a percentage.
If I were the customer and had to go through the same team that built my house to get everything done, I would feel quite taken advantage of.
Then there's the question of how Huck would have felt if the customer had gone to a different electrician to get some work done. Does he have any right to expect to be called back again and again? As a homeowner, I would get really angry if a GC I had hired to do a job showed any anger toward me for going to someone else for the next job.
On the other hand, if the GC is still working a punch list, and is basically on site, I think there is an obligation to use him.
finding a good GC takes a lot of work, so this thread is telling me that I should tell the GC that if any of my friends or neighbors contact them for some work that the GC should tell them to contact me for permission to use them. Also I should get a cut of the contract that may result.If I called an electrician to do a job and they told me I had to go through some GC I would consider making three calls. The AG since I feel I was being ripped off by being forced to use someone I didn't ask and paying an unnecessary markup. The Licensing board with the same thing. and the IRS cause I would question whether the electrician was really an independent contractor (plus I get 10% of any additional taxes collected).any GC who thinks they "own" is very mistaken.bobl Volo, non valeoBaloney detecter WFR"But when you're a kibbutzer and have no responsibility to decide the facts and apply the law, you can reach any conclusion you want because it doesn't matter." SHG
Edited 5/26/2008 12:02 am ET by bobl
this thread is telling me that I should tell the GC that if any of my friends or neighbors contact them for some work that the GC should tell them to contact me for permission to use them. Also I should get a cut of the contract that may result
I missed it. When did that come up?View Image “Good work costs much more than poor imitation or factory product” – Charles GreeneCaliforniaRemodelingContractor.com
"When did that come up?"when folks generally say they "own" the sub, that after doing the work to find client ,contract with them, that the sub can't contract on their own.If I spent a lot of time finding a GC then I "own" the GC. That GC shouldn't do any work based on my relation (my friends , my neibors) with the GC. my contract relationship lasts for ?ever? so other contractual relations have to be subservient to me and largess in allowing those contracts to be let.I suspect a lot here won't see the parallel situation. I see no difference in telling one independent contractor who he can contract with as another.there are different situations that have been discussed in this thrad, but yours was you had completed a contract with someone, and now you think you can dictate who else can contract with them.
bobl Volo, non valeo
Baloney detecter WFR
"But when you're a kibbutzer and have no responsibility to decide the facts and apply the law, you can reach any conclusion you want because it doesn't matter." SHG
something got lost in translation
when folks generally say they "own" the sub No one said that. You're reading things into this that aren't there.
you had completed a contract with someone, and now you think you can dictate who else can contract with them Nope. I said I expect my subcontractor to call me before going out on my job, doing work on the project I hired him to work on...if he wants to continue doing business for me. I don't "dictate" anything to anyone. He doesn't "dictate" to me if I can do electrical work on a job where he is my electrical subcontractor - but I still call him and talk it over with him before I do. Get it now?
My work on the project was only complete in the sense that I had received my final check. But since part of my responsibility was to manage (and pay) the subcontractors - and he had not yet been paid in full (I just received my final draw, and called him to ask where we could meet so that I could give him his final draw), therefore the job was not yet over and he of all people was in a position to know that.
It helps to read the thread through, before making inflammatory comments.View Image “Good work costs much more than poor imitation or factory product” – Charles GreeneCaliforniaRemodelingContractor.com
You may not have finished your transactions, but the job was over and the homeowner's relationship with you was over.
If you had paid your sub three days before he went to do some work, would that have made it ok?
A GC handles projects, subs, sometimes permits and whatever else pops up. You get paid to orchestrate. When your orchestration is complete, you have no right to keep demanding a cut from further work if you are not orchestrating. If the sub is doing a simple job that requires no orchestration, I just don't see how you can believe that you deserve to tack on an additional percentage for the customer to pay. This would encourage the homeowner to contact a different sub than the one who had already worked on the house to save money.
If the customer liked the sub's work and there is no higher coordination needed, why should you be involved? You do have a relationship with the sub that goes into other work, but that doesn't grant you a mini-monopoly.
You have brought up the fact that you paid the sub extra to make up for his low bid. That was the right thing to do for many reasons. This happens all the time, and it is done to maintain your working relationship and keep the sub in business. You make an effort for him, and it is reasonable to expect that he will make an effort for you when you need it. But this in no way has the string attached that you can control his work when you are not providing any work for the homeowner nor coordinating for the sub.
As for business development efforts - you were successful and got the renovation job. Mission accomplished. If you did good, your reputation will be enhanced and you may get more work. But that's the end of it.
If I take an ad out in the paper, make phone calls, put up signs, and visit prospective clients, that is my choice. It is my resources that are being used. Often, one person's efforts result in a windfall for others. You don't necessarily get to put a tax on everything you do.
said much better than when I said something.
bobl Volo, non valeo
Baloney detecter WFR
"But when you're a kibbutzer and have no responsibility to decide the facts and apply the law, you can reach any conclusion you want because it doesn't matter." SHG
"something got lost in translationwhen folks generally say they "own" the sub No one said that. You're reading things into this that aren't there."No - you did not say you own him, but you did use possessive words, like My job, and My electrician that indicated you seem to think in terms of ownership and control
Welcome to the Taunton University of Knowledge FHB Campus at Breaktime. where ... Excellence is its own reward!
you did use possessive words, like My job, and My electrician that indicated you seem to think in terms of ownership and control
Oh holy cow. I'm gonna respond to a few more of these, then I'm dropping out of this thread. I say "my house" - but the bank owns it. I say "my hometown" - but I don't claim to own it, or control it. I say "my bank" - but don't claim ownership or control.
So why all of a sudden if I say "my job", or "my sub", is it ok to imply ownership and control? Its my job because it was where I was hired to work. I say my sub because he was working for me on that particular job. Nothing more express or implied.
One thing that always amazes me is people's infinite capacity to read negative things into a post that aren't there.View Image “Good work costs much more than poor imitation or factory product” – Charles GreeneCaliforniaRemodelingContractor.com
"So why all of a sudden if I say "my job", or "my sub", is it ok to imply ownership and control? Its my job because it was where I was hired to work. "Because of the context you used the terminology in - one of complaining that the sub did not give you control over your job.I have tried really hard to stay out of taking sides in this thing because I was not there. In my whole working life I have been pretty fleible on both sides of this whole kind of thing. I have dozens of instances that could make either side of the arguement that i don't want to waste time reporting.It all comes down to respect and communications for me. There are subs I refuse to use, but it has little or nothing to do with this sort of issue if they do good work on a timely basis on the job I am running, that is what I need.
Welcome to the Taunton University of Knowledge FHB Campus at Breaktime. where ... Excellence is its own reward!
Thanks for sharing your opinions. And thanks to all who contributed to this thread.View Image “Good work costs much more than poor imitation or factory product” – Charles GreeneCaliforniaRemodelingContractor.com
you had completed a contract with someone, and now you think you can dictate who else can contract with them Nope. I said I expect my subcontractor to call me before going out on my job, doing work on the project I hired him to work on...if he wants to continue doing business for me. I don't "dictate" anything to anyone. He doesn't "dictate" to me if I can do electrical work on a job where he is my electrical subcontractor - but I still call him and talk it over with him before I do. Get it now?
_________________So you wouldn't be annoyed if you'd seen XYZ Electricians doing the job your sub did?Leon
"I said I expect my subcontractor to call me before going out on my job, doing work on the project I hired him to work on..."I guess I misread one of your posts where I thought you said the work was complete, you got paid, and then he talked to the guy."But since part of my responsibility was to manage (and pay) the subcontractors - and he had not yet been paid in full (I just received my final draw, and called him to ask where we could meet so that I could give him his final draw)"far as the contractee was concerned, the job was complete.since the work was done and excepted sounds like your splitting hairs cause his contract wasn't over because you hadn't bothered to pay him yet. as I stated, the contractee must have figured his obligation with you were over, so you had no right to re-enter that house for anything except fixing problems, if any.
bobl Volo, non valeo
Baloney detecter WFR
"But when you're a kibbutzer and have no responsibility to decide the facts and apply the law, you can reach any conclusion you want because it doesn't matter." SHG
"If I spent a lot of time finding a GC then I "own" the GC. That GC shouldn't do any work based on my relation (my friends , my neibors) with the GC. my contract relationship lasts for ?ever? so other contractual relations have to be subservient to me and largess in allowing those contracts to be let.I suspect a lot here won't see the parallel situation"I think you've created a false parallel.Look at it more realistically. Heres a common situation. Lets say you are a sub and you find some small plumbing job...the lady has a leaky toilet. While you're there, you find out that she not only wants the toilet replaced but the entire bathroom. Let's say you don't do entire bathrooms, so you refer her to your GC that you've been partnering with for awhile. The GC lands the job and subs all the plumbing out to you. The contracts done and paid for. A month later, you find out that the lady decided to replace the Master Bath and Kitchen too. You also find out that the GC decided to use a different plumbing sub. Yes, it's "legal". No one owns anyone...right? It's not even unethical. There was no conflict of interest. But....DOES IT MAKE GOOD BUSINESS SENSE??????! What's the chances that the sub will ever send that GC another lead? When it's all said and done, we all can do whatever we want. We do have to be realistic though and realize that some business practices might be viewed as undesirable by our network of associates. We all have our own local standards and everyone's mileage varies. So, lets just talk about feelings here. How would you feel if you were the sub that got knocked out of the cold, when it was your lead in the first place. Would you feel good enough about the situation to continue sending that GC leads? Bob's next test date: 12/10/07
"Would you feel good enough about the situation to continue sending that GC leads?"no I would not.but it doesn't change the parallel I tried to draw.that there are many layers.A contracts with( and has spent time and effort finding ) BB contracts with CA and C have no contractual relationship.once the contract between A and B is over, then it is over. B can't claim any rights in the job done for A, B no longer has a contractual relationship, and no right to claim one.I agree with a lot of what you have said in your posts, but IMO a lot of it wasn't about the situation in the OP.you mentioned feelings, how about this one, a contractor thinking he "owns" the rights to any work done on my property, when there is no contractual relationship between us.
bobl Volo, non valeo
Baloney detecter WFR
"But when you're a kibbutzer and have no responsibility to decide the facts and apply the law, you can reach any conclusion you want because it doesn't matter." SHG
Since your contracts with the HO and the electrician were complete, there might be a breach of professional courtesy,
a call from the sub would've been nice.
The question that begs an answer is; why didn't HO call you? You should ask the HO, be prepared for an answer you might not like (I wasn't).
The awful thing is that beauty is mysterious as well as terrible. God and the devil are fighting there, and the battlefield is the heart of man.
- Fyodor Dostoyevski
a call from the sub would've been nice
That was my point to him. When a client adds some elec. extras to a job he's doing for me, even if I can do them myself, I'll call him first and run it by him. If he passes, then I'll do the work. And when he underbid by 3k on this same job, I ponied up the 3k because I understood his dilemna, not because I had to. Life isn't fair, but I try to be. Professional courtesy.View Image “Good work costs much more than poor imitation or factory product” – Charles GreeneCaliforniaRemodelingContractor.com
The way you've described the situation, most people I've ever worked with would consider what the sub did "stealing".
You brought him into the picture, the customer is yours.
I'd keep working with him, as long as he doesn't keep doing it...buic
Well, I can see that some have forgotten that we live in the 21st century, in the "Land of the Free" .... and somehow think we're still serfs in medieval Europe.
The original project is done. Over. Complete. The business relationship is also complete.
Nor has the customer any reason to call, or hire, a general contractor for a job that involves less than three trades. If the customer did hire a GC - and that GC called the same electrician - would you think he was 'poaching' "your" electrician?
Don't owe him anything? That's right. Go ahead, act like a 5-year old, vow to never call him again .... heck, I'm not aware that you made any commitment to use him exclusively forever, or pay his bills in between jobs, either.
Same applies to your using his helper after hours. He doesn't own the guy - off the clock, the guy is free to do as he wishes. I do hope you realize that your crew has the same rights - you have NO claim to their activities once they're off the clock.
Keep to your own knitting. Do your job ... which is serving your customers. When the job needs an electrician, your only concern is in completing that job successfully. Nothing more, nothing less.
"Your" customer? Guess what - you don't own them either. Heck, they could hire a second GC, for a second project, while you are still on the site. All you can do is your best - and hope.
Well, I can see that some have forgotten that we live in the 21st century, in the "Land of the Free" .... and somehow think we're still serfs in medieval Europe.
I understand this is an emotional subject for some of us. So I expect some of the responses to be pretty impassioned. But I don't think anyone mentioned anything about serfdom or freedom - just respect and courtesy.
The original project is done. Over. Complete. The business relationship is also complete. Nor has the customer any reason to call, or hire, a general contractor for a job that involves less than three trades. If the customer did hire a GC - and that GC called the same electrician - would you think he was 'poaching' "your" electrician?
No, nor did I say anything to that effect. Only that change orders on work within the scope of my job within days of my final check should be run by me - if my subcontractor on the job gets the call. If I ran a hardball operation, I wouldn't have bailed him out when he underbid by 3k. But I don't run my business that way.
Don't owe him anything? That's right. Go ahead, act like a 5-year old, vow to never call him again .... heck, I'm not aware that you made any commitment to use him exclusively forever, or pay his bills in between jobs, either.
I haven't 'vowed' anything. Nor said I would 'never call him again'. Again, I realize this can be an emotional issue, but clouding the water by criticizing words that were never said or implied isn't helping any. I appreciate hearing other viewpoints, otherwise I wouldn't post here. But we don't need to throw rocks at each other - do we?
Same applies to your using his helper after hours. He doesn't own the guy - off the clock, the guy is free to do as he wishes. I do hope you realize that your crew has the same rights - you have NO claim to their activities once they're off the clock.
It wasn't me that had a problem with his employees bidding against him while "off the clock" - it was him.
Keep to your own knitting. Do your job ... which is serving your customers. When the job needs an electrician, your only concern is in completing that job successfully. Nothing more, nothing less. "Your" customer? Guess what - you don't own them either. Heck, they could hire a second GC, for a second project, while you are still on the site. All you can do is your best - and hope.
Never said I 'owned' them. If I say "my friend", it doesn't mean I think I own them. Its an expression, implying that my advertising, salesmanship, PR, etc. is what brought me to their job, and my sub to them. I expect some respect for that arrangement. All I would have wanted is a phone call - "Hey, that client I just finished for you wants some elec. changes - is it cool with you if I take care of it, or do you want to be involved?" That may be a tough pill to swallow for some, but then again, this guy had no problem calling for my help when he underbid.View Image “Good work costs much more than poor imitation or factory product” – Charles GreeneCaliforniaRemodelingContractor.com
Just a fine point ..... I had assumed the example was using the sub's employee for non-trade related work. You mentioned 'bidding against him,' which I take to mean doing electrical work in direct competition with the electrical contractor. Assuming that the employee has the necessary contractors' license, bond, insurance, etc ... I don't have a problem with that. The GC exceeding the scope of his license, and having his employees do work beyond the competence of the GC is an entirely different issue.
The OP started "Because after I finished a job..."
That sounds to me like the additional work had nothing to do with the original scope of the job. GC sees additional work when he visits months later? So what? It's the customers' house, not the GC's. The homeowner has the absolute right to hire whomever they wish, to do as they wish.
GC writes the rules? If they're not written down, they don't exist. Period. So- where are these 'rules' spelled out in the contract?
No experience as a GC? Correct as charged - and thanks for the compliment! Maybe there's a reason GC's are, as a group, held in low esteem by nearly all - even engineers :D
My license says I'm allowed to contract with the public. There's no qualification that lets a GC, or anyone else, step in and grant approval. If you want an 'agreement' ... that's what the contract is for. Spell it out.
As far as business referrals are concerned .... that sword cuts both ways. There are some GC's I'll recommend. There are others I won't. There are even some I'll not work with, at any price.
Nor, as I've noted, does the GC have absolute control over the subs on a job. Simply put, the customer has the final say. I have had a number of jobs where the GC, for whatever reason, wanted to use someone else ... and the customer vetoed the idea. Some of these were private parties, some were government, some sites were 'union,' and some were not.
There's a lot of room in contracting for negotiating ... but none for dictating. Rules? My 'rules' are found in the law books and the contracts I agree to, and interpreted by the courts. Period. As I've also noted, the very GC who made his threat has since had the pleasure of sharing a job site with me - it may not have been his choice, but that's what happened.
Another GC wanted to make an issue of my participation, and was bluntly told - if someone has to go, the customer will happily find another GC. Another 'turf war' nipped in the bud.
I'm not about to jump into what seems to be developing into a moral minefield, but will say, for completely selfish reasons, I always contact anyone who worked on a project before I become involved. I've taken over design and construction work from people who have fallen out of favour with clients, and whether I like them or not, it pays to hear their side of the story and to find out if you are stepping on their toes.
Just for "grins and giggles," I posted this question at an electrical forum. Let's see what the "subs" say :D
Looks like a lively discussion is going to result. Check it out here: http://www.electrical-contractor.net/forums/ubbthreads.php/ubb/showflat/Number/178210/page/1#Post178210
That's an interesting site and it has some nice features that BT does not have.
It looks like the posters will also divide down the middle with the guys who think making a living is a "you scratch my back and I'll scratch yours" deal and those who step back and consider that the guy who wants the work (customer) done is also a player, and not just a mark.
I know that much of what people like Blue are advocating is a fact of life in the real world. I have always hated that, years ago, I could not get an item for the same price as a contractor. There is wholesale, and there is wholesale. The first is a situation whereby economies of scale make it profitable to sell large lots in less expensive packaging to big customers for less unit cost. The second wholesale is the buddy-buddy system where all the tradespeople and GCs work together to pry as much as they can from the customer. There is nothing wrong with that, but I think there is a better way. For instance, I appreciated that I would get the same price from Home Depot when I was a contractor as when I was just a person buying a few items to fix up my home. I just made it clear to anyone I was doing a job for that they could get their materials through me, which meant I would get some from certain suppliers and some from big box stores, depending on availability and convenience. I would also let them get their own materials. They could go with a list and go to anybody for the materials. As long as they brought me what I needed to do the job, that was easier for me. I remember one job where I did that where the customer got Andersen windows from HD, most of the lumber from one lumberyard, and some items like shingles from another yard. He picked up materials for site-built forms from another company forty miles away. The costs were open and transparent and honest up front. He paid for my advice and for my skills. I did not need to have a clandestine markup to cover my overhead, expenses, and markup.
I also did not appreciate that actual prices given to others were kept from me when working with lumber yards, plumbing and electrical supply houses etc.
I like sunshine in our laws and in our prices. A contractor is paid to do a job, and markup should be no mystery. If that means losing a job in the short term, it means that eventually that customer will get the job done for the right price anyway.
I think that much of the miscommunication on this thread comes from the fact that the original post stated that the job was complete, but later the details come out that the electrical work is more or less related to the original job, and the original job is barely complete.
The devil is in the details, and this looks like a case of 'scope creep', where the electrician should have discussed it with the GC. But that's only one opinion, based on what I think the facts are, and since the details and timelines were left out of the original post, it's really a toss up.
So, what's the markup on the milk you bought today? How about your last car? What is the markup on the hammer you bought? What is the markup on your dentist's services? The hygeniest? The paper boy? It doesn't take a genius to know that everyone in business is marking things up and needs to make a profit. Are you interested in the bottom line, or the markup? If contractor "A" can deliver you a 4000 sf house at 100 per foot and Contractor "B" delivers at 95 per foot and all things are equal...would you choose contractor A if you found out that B was marking things up higher? Lastly, if so many tradesmen and contractors are getting so filthy rich on "excessive" markups...why are so many poor and why can't they afford to fund their pensions and buy health insurance? Why can't they have paid vacations? You're willing to buy goods and services and fund those things for other goods and servcies...why can't a tradesman have the same quality of life? In my day, I've never heard of one marking up enough! Bob's next test date: 12/10/07
You're getting emotional here, and you are better than that. I know this because the posts you have made here over nearly ten years that I have watched were steady and you managed to maintain the position of neutrality while still expressing your opinion.
We don't know the markup on many specific things that we must or like to buy. I don't think anybody has a handle on this. It really doesn't matter. With most things that we purchase, we expect the buffering effect of the market forces, academic input, ethical restrictions and governmental control, among other things, to keep the playing field fair. That is a reasonable assumption, and a valid one in general.
I actually have a good idea of the markup on many things that I consume, from dental care to yard sales. Even if I don't, markup and profit is no secret, especially to the IRS and the heavy hitters in the business world. Why should we keep this same information secret from our customers, aka those who pay us and are our raison d'etre? Control and restriction of information is truly power, in the Machiavellian sense. It enables abuse and gain unfair advantage.
I advocate for an open conversation with customers and suppliers. If suppliers want to give me an advantage over residential consumers, so be it. If a big box wants to give the same price to everyone, so be it. If I want to mark up my work by 10, 20, or 80%, so be it. As long as I am willing to live with the lost contracts, it is ok. If a customer has a problem with the fact that I can get a certain item for X dollars, let them deal with it or go to someone else.
The whole industry seems to have gotten to the point where covert price discounts are more important than the contribution of the tradesperson. Just be honest. Let the customer and everyone know what you are charged and what you will charge. Let them decide. The work requirement is still there. The job will get done. It was not the trades that worked out this system of price breaks. It was the suppliers. They did not do this for the benefit of the trades or the benefit of the customer. They did it to cement a loyal relationship with the trades. It was an unwritten contract to take care of the trades if they would play by the rules that made the suppliers rich. This diminished the true value of the trades. No trades means no suppliers, but no customers means no trades.
I believe that excessive markup, and anything excessive in fact, is the result of the restriction of information. Sunshine levels the playing field.
Your last comment is worthy of another post. I have to get downstairs now to commandeer the grill. My wife is ready for me to make my contribution to supper.
Chill and think about this.
I'm not emotional at all about this question. I asked specific valid questions. There are no answers. You can't possibly know the answers to those questions...you might think you know, but it's only a guess. The point is that you don't walk into a bike shop and make a decision about whether you want that shiny new bike based on their markup and profit. You look at the bike and make a decision about it based on the sticker tag. You don't look over the counter and demand to know the costs, markup and profit. That's just an absurd notion. Somewhere in your psyche, you've convinced yourself that there is something dirty about contractors making enough to have a successful life and career. That's not an uncommon position. There are many who also think that profit is a dirty word. There's no point in me trying to explain it. I'd suggest a couple of years at a business college. Ask the professors about the need for disclosure in pricing policies. I think you'll find out that for most businesses, pricing policies fall under the "confidential" category and you would be dismissed and possibly sued if you divulge that type of proprietor information. I know for a fact that you wouldn't be working for me if you were yapping away about my wholesale prices and markups. "I believe that excessive markup, and anything excessive in fact, is the result of the restriction of information. Sunshine levels the playing field.'If you could show me five contractors, that are operating in the retail residential market, that are guilty of charging "excessive" markup, I'll send them all a gift certificate and put their names in the hall of fame! It just ain't happening. There isn't anyone getting rich from excessive markup in the residential market. That's another absurd notion except perhaps in CA because of their oppressive regulatory laws which eliminate competition and force the little guys out of the industry. Bob's next test date: 12/10/07
After reading this whole thread this morning, I have my 2 cents to say.
I don't know where the world is coming to when a sub who had no relationship with a ho, feels that he can go and give a price on new work without even a headsup.
Legally he has no obligation, ethically he has an obligation to do so.
If after you go to lunch, and here about the whole story from his point of view, I believe you may find it to your advantage to "forgive and remember" this in the future.
I had this come up several times when I was in business with employees. While a sub is not technically an employee, a sub should act more like one.
that's what I was thinking.
sitting her right now ... just now read thru to the end.
and am amazed there are guys out there that don't know the basics.
ya don't steal ... and if ya do ... ya don't get more work.
it's a pretty simple equation ... who's gonna put more food on your kids plate over the next coupla years?
that one customer or a good GC?
if he's a crappy GC to work "under" ... then by all means ... go for it and cut the cord.
if he's a good GC to work "with" ... think twice.
me, I work as both a remodeling GC and remodeling / new const sub.
so I see it from both sides ...
and it don't change no matter which side yer on.
follow the money.
common sense.
you'd think this is some sorta new idea?
I've even had subs tell me when other subs were talking a little too much to MY customer when I wasn't around MY jobsite. At least some know "the rules"
fast forward a coupla years later ...
the sub who clued me in ... still working with and feed as much work to as possible.
the talkative sub ... he's gone and no one I know trusts or uses him.
he might be filthy rich ... don't know don't care.
like DanT said ... my rules.
Jeff
Buck Construction
Artistry In Carpentry
Pittsburgh Pa
For the last 13 years, up until 2 years ago, I worked for a framing contractor. Good guy. During this period of time I had plenty of offers from homebuilders to give me their business if I would split from him.
I learned a long time ago, these are preciously the people I would never work for. These contractors are all former contractors today. Where would I have been then.
I was taught in college business courses that ethics play a roll in business. It appears that too many people have forgotton that. Everytime I was offered side jobs from contractors, weekends only, I would clear it first with the person that payed me 50k a year / benefits. To me that only seemed the correct thing to do. I worked with 2 people that didn't do this. To make a long story short, they didn't get paid because they didn't have ins.. My boss got paid, deducted 50% and paid them the rest. They made about $8/hr. for their time that weekend.
To me if a customer called a sub back within a year, I would have expected a call. But I guess that is just me.
Jeff,
please explain some things to me.why do you "own" a customer? You said "MY customer".and how long do you own them after a contract is finished?since you're the sub's customer, does the sub "own" you?why should a customer have to go through you for work done by one specialty contractor. do you pay your subs for jobs they don't get because the work is done for one of "your" customers (after your contract is over) because "your" customer doesn't want to pay your markup when your services are not needed?If a GC has a contract with a specialty contractor for work at place A, does any work done by that GC at place A belong to that specialty contractor? the specialty contractor's customer (the GC) belongs to the specialty contractor (?). does the GC need the specilty contractors permission to do work there?
bobl Volo, non valeo
Baloney detecter WFR
"But when you're a kibbutzer and have no responsibility to decide the facts and apply the law, you can reach any conclusion you want because it doesn't matter." SHG
why do you "own" a customer? You said "MY customer".
I found them ... sold myself ... gained their trust
and how long do you own them after a contract is finished?
depends ... but always for a coupla months
since you're the sub's customer, does the sub "own" you?
not sure who the sub is, but like the current job.
tiling for a designer.
Yup ... she "owns" me ... owns my trust and good judgement
not exclusive to other designers ... but exclusive to her customer whom I'm laying tile for.
and ... the tile sub who's subbing from me ... I own him on this one.
the designer wants him to lay tile?
it better go thru my checkbook first.
luckily ... all 3 of us already know this.
"why should a customer have to go through you for work done by one specialty contractor. do you pay your subs for jobs they don't get because the work is done for one of "your" customers (after your contract is over) because "your" customer doesn't want to pay your markup when your services are not needed?"
my customer pays for my expertise. A big part of that is knowing which phone numbers to dial and when. Also involves relaying the proper info from one party to the other.
Don't pay my subs for work they miss because I pay them plenty for the work I feed them. Must work ... 'cause they feed me work too.
and your premise of not paying "my mark up" is flawed ... as they're not getting the same pricing as I am. My sub's charge home owners a hell of a lot more than they charge me.
why?
cause of all that knowledge the customers pay for.
when I set things up ... no one walks in cold. Things are already set to their advantage ... right decisions are already made ... right selections are made ... right materials are there ... etc.
"If a GC has a contract with a specialty contractor for work at place A, does any work done by that GC at place A belong to that specialty contractor?"
damn straight. Current job again ...
5 weeks of tile in a 3 week deadline. I'm the main tile setter. I was given the option to take all the work and make it happen ... or pick what I wanted while anothet tile setter was brought in.
I took 2/3rds of the work. Picked which areas I wanted. Then ... the other guy was offered the rest.
other tile guy is fine with that too ... as next time he may be the first guy in, then I'd have to accept or decline what he decided to take a pass on.
this really shouldn't be that hard to understand.
it's simply life in the real world.
U want your phone to ring then ring again ...
follow the rules.
just got a call today about another porch.
in the middle of a porch project a deck guy fed me.
he fed me ... I threw him a check.
that customer ... still his customer btw ... even though he didn't build a damn thing for him ... mentioned a bath update. I immediately called the deck guy ... and said
"WE might have a bath job too".
if it goes thru ... he'll get another check.
remember ... it's his customer.
what U seem to be forgetting in all this ... no one pays or owes anything till work is generated ... why fight something that leads to more work for everyone?
anyways ... told him sure, I'm busy but I can fit in the next porch job.
of which ... he'll get a cut from.
see ... play nice and the phone rings.
don't ... and electricians stop getting called.
smartest thing any / all of my subs say to my customers ...
"I dunno ... ask Jeff"
Jeff Buck Construction
Artistry In Carpentry
Pittsburgh Pa
thanksthat sure helps me in my strategies when I want work done.btw, from your post I can't tell if they charge you less cause they have less work (your getting things ready) or if they are getting way larger profit when acting as the lead contract. 9 don't know if you saw my posts to Jim Allen, trying to figure out what he means in getting discounts).
bobl Volo, non valeo
Baloney detecter WFR
"But when you're a kibbutzer and have no responsibility to decide the facts and apply the law, you can reach any conclusion you want because it doesn't matter." SHG
"or if they are getting way larger profit when acting as the lead contract."
profit implies they're making more money when they have to charge the home owners more than they charge me.
my old electrician hated working "for homeowners"
so he charged a premium.
and still made more money per hr working for GC's.
good GC's that is.
sub's make the most money for the least headache when they can walk in, do their work and walk out.
can't do that with 99% of home owners.
my guys chagre me less that HO's because I try to provide an organized entry / exit for them. When it comes to subs ... my job is to make their job easier.
here's a Q for ya.
U buy a car from a new car dealer that has a used car lot.
U want a different stereo. So the dealer arranges for a stereo shop to swing by at delivery ... right after U signed and paid ... to install the stereo. U mention to the dealer ... OK ... now we're looking for a nice used car for the kid.
stereo guy pulls U aside and says Hey, I got a used car for sale in my driveway.
dealer finds out ... U think that stereo guy will be called back to that dealership?
another one ... guy delivers steaks to the grocery store ...
has a coupla boxes extra.
decides to park his truck at the end of the grocery store lot and sell the extra meat outta the back of his truck.
is that good business?
Jeff Buck Construction
Artistry In Carpentry
Pittsburgh Pa
I don't believe in talking to subs about the job at hand (other than BSing on a non interference basis)
bobl Volo, non valeo
Baloney detecter WFR
"But when you're a kibbutzer and have no responsibility to decide the facts and apply the law, you can reach any conclusion you want because it doesn't matter." SHG
Actually, when I make larger purchases, I do investigate what an item costs to the extent possible.
For instance, in 2000, I wanted to buy a motorcycle. Using my own methods, I found out that a typical markup was 14%. I used this and other information to figure out the actual cost of my bike and made a decision as to what I was willing to pay.
I started going to dealers, being up front about my calculations. I told them that I was willing to pay X dollars for a bike that cost the dealers a certain amount. There were no secrets. The third dealer agreed to my price and we had a deal. I did not feel cheated and he was not cheated, although he let the bike go for less than he had hoped.
Also, I did go into a local bike shop 18 months ago after a year of research to buy a $2400 bicycle. I saw that his price was within spitting distance of what I was willing to pay and we had a deal which left us both happy. I understood that he makes a lot of his money on return customers and gear and am more than happy to be his customer.
There is no demanding involved. It is research, and some are better at it than others.
I think there is nothing wrong with contractors making a very decent living. I have neither stated nor implied that there is anything dirty about making money. It is the deception that goes hand in hand with a buddy network of businesses that I object to.
I picked up my attitude working construction contracts for the government. Believe me, the government knows exactly what every item costs, usually before the first groundbreaking, and definitely before the last 10% is paid. The government believes that a contractor has the right to a decent profit, and will even pay an obscene profit knowingly if the combination of bids and capabilities necessitates that. The difference between the government and the residential customer is that the government has a straightforward and honest relationship with all bidders and they know the business. If this works with the government and in many other areas, it will work in construction.
If I worked for you, I would not be talking prices with your customer. If I were your sub, we could talk about our roles. I would probably agree to let you do the money talk.
I do know about excessive markups. I have seen what some people have paid for sunrooms, for example, and I have an idea of what they cost. I won't get into any names. I have seen additions and renovations and even small jobs where the customer paid way too much. This is a not uncommon situation when a woman who lives alone, for example, gets a bid to fix something on her home. I have personally seen this as it pertains to friends, relatives, and acquaintances. I know of one woman in this situation locally who approached me to do a renovation estimate for her house when I was in business. She had a previous estimate for work which amounted to $65k of reno work on a house worth only about $80k. I could have done the job, hired a few subs to do some of the work, and still made a decent profit for half of what the other contractor was going to charge her. I advised her to sell the house and put the money into a new home, which she eventually did. Since she owned the home, she got her price and with the money she would have spent on the reno, she was in a new home.
Some credit card companies charge excessive, usurious interest rates, and many businesses charge whatever the market will bear. Payday loan and check cashing companies are notorious for excessive practices. Are you saying that contractors in general are nice guys who wouldn't do that? I think you will find all kinds of contractors. You don't have to steal to get rich. I am not accusing you of gouging, nor anyone here at BT. I don't even know your business model. I personally only do work for people with them knowing up front exactly what I will charge and I give true financial information if they want it.
I would rather say to a customer that his materials will cost $1200 and that I will do the job for $2000 than to say I will do the job for $2000 and refuse to give him any information about my costs. Of course, I would not provide a detailed estimate of my material costs unless that was part of the deal. I would not be bashful about saying that I must make $800 on the job to cover my O&E plus a profit that I can live with.
I did that with a business owner a couple of years ago and really thought I would get the job. He didn't call me back and I went on to another job. No hard feelings on my part. I drive by his place now and then. He still hasn't had the work done.
You've taken my posts as a personal attack, IMO. It was simply a different way of thinking. You live in one reality and I choose to live in another. You say you are not emotional, but use words like "dirty", "yapping away", "absurd notion", and "oppressive regulatory laws". Perhaps in your anger, you did not read my posts.
As far as business college goes, I was in an MBA program at UMC in 1985. After about six courses, I was so disgusted with the mantra that the primary responsibility of the corporation is the bottom line and the delivery of that value to the stockholder is paramount that I decided I could not agree with that philosophy. I pulled out and never looked back. One of the great problems in our country right now is that corporations are all about making whatever the market will bear. Oil companies feel they need to dig up the Arctic Wildlife Refuge right now because there is oil there. It has to be this generation that exploits that national resource. Let future generations take care of themselves. I believe it is important for both environmental and national security reasons that that particular oil remains in the ground as long as possible. Let my great grandchildren decide if it is essential to get that oil. We do not need it. Health industry white collar work that contributes nothing to health care is a major reason that many working Americans are walking around unable to afford decent health care. I am close to ranting about an oxymoron called corporate morality, so I will end here.
Edited 5/27/2008 10:41 am ET by Sasquatch
"Using my own methods, I found out that a typical markup was 14%."Marked up on what? What did the manufacturer markup? Even if you know, it's all pointless information. You didn't answer my question.If the quality and service is equal: If "A" costs 100k and marks up only 10%, would you buy from "B" if it cost you 110k and you knew it was only marked up 5%? Are you buying the lowest markup or are you buying the lowest fixed price? Bob's next test date: 12/10/07
So you think I should just be a dumb consumer and pay whatever the GC wants on the next job? You have to be doing your part as a consumer to go for the best price for equal value. It is not the amount of the markup that bothers me. If I am in demand and I feel I can get a 200% markup, that is not unethical. I will ask a customer to pay a fair price if I need the work. If I don't need the work, I will raise the price. What I won't do is play some kind of shell game with wholesale costs and trade alliances to make it appear that finances are other than they are. I am not even saying that you have to share price information with the customer. I am just saying that is how I prefer to work. I will charge whatever I want and the customer will know that he is paying for my services, but there will be no deception or coverup.
"So you think I should just be a dumb consumer and pay whatever the GC wants on the next job?"No, I would think you are an educated consumer and have wisely chose me. If my price seems excessive, then I'd expect you to get the proverbial "three bids". If you contacted the electrician that I use as my sub, he would give you the same price because he would be quoting you at retail price (the same retail price that I gave you). "If I don't need the work, I will raise the price. "That is exactly the type of business I DON'T want to run. I don't want some clients getting work done at "normal" prices and some quoted at "raised" prices. I want consistency in my business operation. Bob's next test date: 12/10/07
Different strokes for different folks! :)
"If you contacted the electrician that I use as my sub, he would give you the same price because he would be quoting you at retail price (the same retail price that I gave you)."now this statement really confuses me, since there are different ways of establishing a price. the two basic ones I'm aware of has all overhead in labour and subs and materials get passed thru (not sure if profit added) the other has a markup on subs and labour as well as profit.the only place to discount a price that I'm aware of is profit. or you are losing money.a number of folks here markup sub work about 40% those numbers indicate a "retail" profit of about 100% for the sub.things don't add up in my mind.
bobl Volo, non valeo
Baloney detecter WFR
"But when you're a kibbutzer and have no responsibility to decide the facts and apply the law, you can reach any conclusion you want because it doesn't matter." SHG
"the only place to discount a price that I'm aware of is profit. or you are losing money."One of the basic rules of business is to give discounts based on volume. Since I represent a higher volume of business for a sub, I think it's reasonable that they take that into their account when they offer me their prices. As a GC, I expect discounts for: Reduced sales time. You don't have to burn through five leads to land one job. You don't have to advertise. You don't have to do a presentation about your company to me. You don't have to explain your background and qualifications, etc, etc, etc. Reduced risk. Every new client comes with the unknown. The unknown represents a much larger risk factor than working with a GC that you have already worked for. Increased production ability. GCs will have the job "more ready" than a homeowner. The GC will know that there can't be three rooms of furniture stacked in front of a service panel that needs to be worked on. They will also have all the preliminary work done that sets the stage for the subtrade to get in and do their work. Its not unusual for a homeowner to say "oh, sorry, I didn't realize that you'd need...blah, blah, blah....to start your work. I'll try to get that ready for tomorrow...Ok?"Volume: If I'm giving you the ability to add workers to your company, you have the ability to lower your the overhead, which in turn reduces unit costs. Those lowered unit costs can be passed on to the GC, who in turn can help you sell more of your services while your are making the same profit margin on more work. You may not agree that I deserve a better rate than Mrs Jones for her one shot deal, but we'd just agree that we aren't good for one another. In essence, our business models aren't suitable to create the synergy that I'm seeking. I don't want to just sell 5k worth of your services...I want to sell 500k worth of your services! Bob's next test date: 12/10/07
Edited 5/28/2008 6:59 pm by Jim_Allen
Just a question... as I have missed about 50 posts to this thread and not going to read them.
I have worked for thousands of homeowners and 100's of GC's. Heard more then once a HO say I'll never work with that guy again, for what ever reason but the 2 major reasosns are.... because he nickle and dimed me on the job ... or it wasn't explained clearly and he used the contract always to his benifit.
I've seen a GC lose a customer over a $15.00 laminate endsplash for a counter top... A $20.00 brass floor vent cover...
So the question is... Do you refuse to work with a HO when both you and the HO know he will never use the GC again????
The people here that act like they own a customer just because they contracted a job with them need to seriously evaluate the way they do business. There are lots of things I don't do in this biz and need professionals for my own house... and there are lots of people who I have used in the past and would never recommend or use in the future. That's a fact.... Deal with it.
If I was a sub, I'd report that information back to the GC. Thats just me. I always accepted that as part of the responsibilities of being part of "their" team. Bob's next test date: 12/10/07
"You may not agree that I deserve a better rate than Mrs Jones for her one shot deal,"I'm not disagreeing with your getting a better rate.what I don't understand is how much of a discount you think you can get before it starts costing the sub money.your potential (hope) of $500k in the future means I should be investing in your company without getting a piece? if the sub's price to you means he's losing money, that what he is doing, betting on a promise.until you have a track record of providing work....so again, where is the discount coming from in the sub's cash flow?
bobl Volo, non valeo
Baloney detecter WFR
"But when you're a kibbutzer and have no responsibility to decide the facts and apply the law, you can reach any conclusion you want because it doesn't matter." SHG
"your potential (hope) of $500k in the future means I should be investing in your company without getting a piece?"Does Goodyear get a piece of Ford Motor simply because they supply them tires? I'm now a GC. The only tools I own are a pen, computer and checkbook. I make my money project managing and selling. I would love to sell 500k of your services. If you don't want to be the company that I'm selling...just give me retail pricing. You'll still be my guy until I find someone wholesale. Most subcontractors think of one job at a time. They don't look at things from a one year or five year perpsective. You see a discount as something coming out of your bottom line without giving it any thought about what your bottom line would look like if you cut prices and tripled your production. It's not surprising that there would be a lot of subs that would resist thinking of themselves as wholesale services to a GC. There is a tendency amongst many small subcontractors to view themselves as islands and they see themselves as completely independent and not needing anyone. A GC on the other hand, NEEDS EVERYONE. And, to be competitive, he needs wholesale pricing discounts. Without it, he's just another struggling GC whos pushing overpriced products and services. Bob's next test date: 12/10/07
"what I don't understand is how much of a discount you think you can get before it starts costing the sub money."That would depend on the sub, the product and service, and the ability of the sub to ratchet up production and cut unit costs. Some guys can't make any gains. Others see the opportunity and go for it. Bob's next test date: 12/10/07
sorry Jim, all I'm hearing is 50,000ft talk.what I'm interpreting is you'll go with the sub who'll give you the lowest price and you expect them to lose money until you build up your companies volume until the work you give them can cover their costs. and you are thinking of them as commodities.
bobl Volo, non valeo
Baloney detecter WFR
"But when you're a kibbutzer and have no responsibility to decide the facts and apply the law, you can reach any conclusion you want because it doesn't matter." SHG
Even an elephant gets eaten one bite at a time. I'm not asking anyone to base their volume on 500k. All I'm asking is a wholesale discount because I'm out there selling retail. I don't know what your costs, markups or profit margins are. Thats your business. All I know is my business. If you are going to charge Mrs Jones $100 and you are going to charge me $100 for the same service, I'm not going to use your services. It's not that complicated of a formula. If you do a one time deal with Mrs Jones...be honest about the time you spend selling her. If you would like to be relieved of that "burden", then find someone that will do it for you. A GC represents just that. Probably, most subs are giving EVERTHING at wholesale prices so they don't understand how they can lower their price. That's probably true....you can't lower it if you are already giving it away at wholesale to everyone, including Mrs Jones. When I did custom framing, I intentionally DID NOT sell my services to Mrs Jones or any other retail client. I ONLY worked for GCs and builders and I only had one price structure: wholesale. In my later years, I had to work for homeowners and I had to create two price structures: wholesale and retail. I'd offer my services to retail clients at a price point about 1.3 to 1.5 of my wholesale prices. Of course, most homeowners were already shopping by the time I started selling retail so my closing ratio was low. That's okay though, I made good money when I had to do all that handholding and babysitting for the homeowners who didn't have a clue to organize their jobsites and line up a schedule. Bob's next test date: 12/10/07
"You didn't answer my question."
Guess it ain't gonna happen. I think he is getting emotional now lol. DanT
I guess I'm just falling apart, Dan! So now you feel better because you gave your bud a pat on the ####, and made fun of me? I guess you like to do business with a wink and a nod too.
Sure sure, I love tricking people. I stay in business in a small town based on the reputation that I will fool you into giving me your money.
But you never answered his question even with all the retoric you presented.
But I do think you are getting emotional over the issue. Really. Settle down. Breathe, breathe, thats better. You are right, I feel better. DanT
Wow, are you guys still going on about this? Why can't everyone just agree to disagr....
Oh, I almost forgot. This is Break Time. :)--------------------------------------------------------
Cheap Tools at MyToolbox.netSee some of my work at AWorkOfWood.com
"Wow, are you guys still going on about this?"Took the words right out of my mouth! Everything that can be said got said by about 70-75 posts on this one.
Welcome to the Taunton University of Knowledge FHB Campus at Breaktime. where ... Excellence is its own reward!
"Everything that can be said got said by about 70-75 posts on this one", he said in post # 161View Image “Good work costs much more than poor imitation or factory product” – Charles GreeneCaliforniaRemodelingContractor.com
How did I know somebody would hand me that come-back?
;)
Welcome to the Taunton University of Knowledge FHB Campus at Breaktime. where ... Excellence is its own reward!
Well, I'm tired of watching soaps for the day. Wish my phone would ring!View Image “Good work costs much more than poor imitation or factory product” – Charles GreeneCaliforniaRemodelingContractor.com
From the guy with 750,000 posts....haven't you said it all yet???;o).
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"After the laws of Physics, everything else is opinion" -Neil deGrasse Tyson
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.
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If Pasta and Antipasta meet is it the end of the Universe???
Leave us alone...we almost converted some of them. Bob's next test date: 12/10/07
tell it to the easter bunny, LOL
Welcome to the Taunton University of Knowledge FHB Campus at Breaktime. where ... Excellence is its own reward!
I puked this up somewhere else, but..always a but, I am.
I came here raw and knew NO ONE..Grant gave me a ride..I stayed with his tuteledge and LEARNED a trade.
And I'd never steal a customer that is in need of his trade, mine is not the same, we are two subs..I can't ever recall any of his subs appraoching an HO to solicit work on the sly. That was unspoken. We just didn't bite tha hand..duh.
I think this whole mess Huck has is he didn't ( or I missed it) state his quandry in the OP, cuz after reading y'alls take, I am confused.
IF I am on a job, that is contracted by a GC, I'd NEVER offer MY service to the HO while subbing to a sub ( such as Grant, who is a sub) ..I guess I mean, I try to stay within my bounds( when I was with Grant) If it's HIS FORTE' , it's his JOB, not mine, he has "given" me customers in MY FORTE' and I think that works..
to the nutbusters of "ownership of clients" yes, and no..
still I think Huck's sparky was within his rights to solicit income,( or be solicited) that is why we are self employed, and pay the dues for it.
And there is a LOT of stuff that is left to speculation, I.E. the relationship between the HO and Huck, and the Ele w/ HO..who knows? The extenuating circumsatnces may flavor the fact that the Ele knocked up the wife..it happens..so get off it..Huck feels fugs, and not kissed, life goes on, and on, and on, and on, and on..dwell in this,and ya miss the that.Spheramid Enterprises Architectural Woodworks
Repairs, Remodeling, Restorations
"We strive for conversion,we get lost in conversation, and wallow in consternation. "Me.
I've been rethinking this thread.If the electrician can go back, after the fact and do work...why shouldn't an employee use the same logic? It's a free country, isn't it? Can't an employee do other work on his own free time? Bob's next test date: 12/10/07
For some reason, I think you are setting me up with that question. I somehow think there is a difference between employees and independant contratcors, and doubt I'd respect the decision of an employee to follow up on work, in this scope.
Lets say I make widgets, I have a guy who makes them with me. Free spirit widget maker.
Customer wants more widgets than WE can make in a day, and I am tired or out of steam...Free spirit works extra, provides the widgets, customer is happy.
Should I make a dust up?
Well yeah..if it was to his benefit and MY widgets and my process..I could get snotty.
If it was HIS widget materials and HIS labor, but made ME look good?
Not taking either side here, it seems that it can be and is now, a grey area. And I believe in free enterprise.Spheramid Enterprises Architectural Woodworks
Repairs, Remodeling, Restorations
"We strive for conversion,we get lost in conversation, and wallow in consternation. "Me.
I believe I addressed the issue in one of my earlier posts. There is a difference between an independent contractor and an employee. If the employee is off the clock, I agree it's his time to do with as he wishes. (Let's forget, for the moment, the employers who seem to think differently). Now, if that same person wishes to get the requisite licenses, permits, bonds, insurances, and professional certifications that are required of the contractor, I have no issue with his running his own business. Competition? Well, this is an old topic, one well addressed by various no-compete agreements, and the courts' rulings on them. In contrast, if the work is being done without the required permit, the person is not legally qualified to do the work, etc .... there are other issues that are not relevant to this thread.
You seem to want to throw up roadblocks against an employee but I'm not sure why it matters. If I'm the next door neighbor and I decide to hire an unlicensed carpenter, who is not required to have a license and he does work "on the side" for me, is this allowed under your scenario? For the sake of discussion, lets just agree that I know he's uninsured and I'm willing to accept the risk. To more fully clarify the situation, lets just agree that he is allowed to do carpentry work in this country because he would be considered either an employee of the homeowner or a independent contractor. Both are allowed under the laws of most states. Basically, I'm trying to take the wind out of your argument about needing licenses, insurance, dbas, etc. So, the employee of the company is now doing side jobs in the neighborhood. The original homeowner wants a door hung and hires the employee direct. Why not? YOU DON'T NEED A GC TO HANG ONE DOOR! Bob's next test date: 12/10/07
Huck, got tired reading, so here's my take, if it's been said, sorry.You were the the gc, they were your subs. Just because you introduced the HO and the subs doesn't mean you cut the middle man ties, ever,. Electrician should have gone thru you... you choose to deal with it as you like.Any of my subs would let me know... and I do the same with any of my gcs... it's the way things work. If dogs run free, then what must be,
Must be, and that is all.
True love can make a blade of grass
Stand up straight and tall.
In harmony with the cosmic sea,
True love needs no company,
It can cure the soul, it can make it whole,
If dogs run free.
I didn't say I 'wanted' to throw up obstacles to a man hiring himself out - I was merely stating the reality of the situation. Fair is fair; if, for a given job, a permit needs to be pulled and the law says that contractors need a license, I'm all in favor of EVERYONE playing by the same rules. Ah, you want to hire the guy yourself. Fair enough. Are you withholding taxes, etc, paying for workman's comp and unemployment insurance, just like every other employer? If so, hire away!
Now, there are those who want it both ways ... they want the freedom of hiring an 'employee,' without the burden of being an employer. Such is simply dishonest. If "value" were the only criteria in this competitive world, I'd be all in favor. I am certainly not in favor of arbitrary advantages or handicaps. To be frank, several of my most loyal customers came to value my services only after several attempts to 'cut corners' or find a 'cheaper way.' Today, they realize the value of things actually getting done right, on schedule, and working at the end of the job. Finally, let's not put our heads in the sand, and ignore one very important detail .... something that can only be described as theft. That is, the way 'side work' tends to get subsidized by the use of the employers' tools, materials, and other resources. Too many folks seem to think it's OK to steal FOR them, and only get upset when someone steals FROM them.
You certainly dodged the question even though I attempted to qualify it so you couldn't. I'll try again.If a carpenter went back to the house and hung a screen door for Mrs Jones on his own time, would you object? No license or insurance or special training is necessary for jobs that small so all of your prequalifications and pre-requisite arguments are moot. I don't see this any different than an independent sub going back "on his own free time". Bob's next test date: 12/10/07
It's not a matter of dodging the question .... it's more a matter of, in your scenario, of the homeowner being dishonest. Under our laws, - and you can not like them, but they're the reality - that carpenter appears on the site as either a contractor or an employee. There is no other option. If he's a contractor, then he needs to withhold his taxes, soc sec, etc. He generally needs to contribute to UI and WC. He generally needs a contractors' license, a business license, etc. If he's an employee of the homeowner, then the burden is on the HO to withhold taxes, issue the W-2, pay WC and UI, etc. Just giving the guy a few bucks and that's all there is to it? Not an option under our system. If the HO does it rarely, and for very small projects, then the 'de minimus' principle takes effect, and there's some room to wiggle. For example, I can hire a man, pay him cash, no paperwork - to a limit of $600/yr. More than that, and all the rules and paperwork come into play. An example of this principle at work is when I pick up a couple laborers to help dig a trench. I still have to have UL and WC for them, regardless of the scope of their employment. It's along the lines of what folks mean when they talk about a "level playing field." I'm all in favor of the rules applying equally, to everyone. If the contractor needs to pay something - so does everyone else. If the contractor's hourly rate is higher than the wages he pays, just where do you think the money is going? Very simply, the bulk of that difference is in the cost of operating a business - costs the contractor would love to be able to eliminate. If those expenses aren't being paid, then it's almost certain that someone is cheating. I'm not in favor of that. Again, looking at your example .... assume you give the guy $20/hr. That better not be what you are actually paying him. Your actual out-of-pocket expense will be more like $28/hr ... just for the tax, medicare, and Soc Sec that needs to be withheld. If you're not paying that, then you're cheating. While you're in the hiring business, be sure to get an I-9, check ID, and verify with Soc Sec. Oh, you want to treat him like a contractor now? Well, does he have the licenses required? If not, then he's not allowed to contract himself out. Are you asking if I am opposed to his having such licenses? I am not.
Do you expect him to arrive in my truck, and use my tools and materials, and to buy things using my accounts? I might have an issue with that. That's how the "sub contractor" differs from the "side worker." There are NO 'sub contractors.' Only contractors - and employees. Moreover, that's what specialty licenses are all about .... the general isn't allowed to actually do much of anything; it's the 'subs' who hold the licenses to actually do the work. The flip side is that the trades generally can't act as the GC. Dodge the point? No, I think you missed mine. Mine being - the same rules for everyone. Period. I'll not endorse cheating by anyone - customer, employee, or contractor. While I have no issue with what a man does on his own time, I do have an issue if he's allowed to do it in a manner in which I am not. Contractors are in the business of serving a multitude of customers. Today that customer might be a general contractor; tomorrow it may be an individual. Employment has an entirely different set of rules. Control of schedule, payment of taxes, provision of tools and materials, etc., are but a few of the things considered when the issue arises. So, the question arises: Does the HO treat the guy as an employee or a contractor? If the HO wants to claim 'employee,' as well as claim the guy's a 'contractor,' depending on who's asking ... that won't fly.
I finally had to look to see where you are located. You are in NV and I don't know anything about NV but I do know about MI and TX. So, lets move this discussion to TX. In TX, a TRCC registration is required on all work above $10,000. In TX, a business does NOT have to provide Workers Compensation. Additionally, if a business does provide WC, an employee can sign a paper and OPT OUT of the coverage. So, getting back to the question. If the employee comes back on Sunday (working on Sunday is legal in TX) and hangs a screen door for $100 (under the $10,000 threshold), do you agree that it's okay because it's a free country and the client doesn't need a GC to hire a carpenter to hang a door.Okay...just to take the winds out of the General Liability Insurance argument....it's not a requirement to have that. It's an option that makes financial sense because the trademan could theoretically burn down the million dollar house because of his faulty drill for $100 labor deal. Okay...got it? Nothing's illegal. The entire question is now going to be answered on it's ethical standards. You are going to have to explain why it's okay for an electrician to go back and make a $100 extra on the GC's contact, but not the employee. While you are explaining why it's okay, please keep in mind that the employee probably needs the "extra" $100 a lot more than the Electrical contractor who will probably work three minute for that c note.
Bob's next test date: 12/10/07
Who "needs" money isn't relevant, at all, ever. Assuming all laws are complied with, I have no problem with the employee doing work on his own time. Yet, to be realistic, it's nearly impossible for this to be the case, and for there being any savings for the HO. It's the desire of the HO to cheat that creates the unethical situation. Nor have I ever said it was "OK for the electrician to go back and make a $100 extra on the GC's contract." Quite the opposite.
All electric work on the GC's contract is paid for by the GC. Now, work that is not related to that contract, and is arranged for after the GC's job is finished, is not part of the GC's contract. It never was, and never could be. The GC has absolutely no claim to future projects the HO may have. The HO has the absolute freedom to hire anyone he wishes. Heck, the GC has no grounds to object, even if the HO hires the GC's most bitter rival, and the other GC in turn asks the same electrician to do the work. If the work is of a nature that does not require a GC, the GC has no more right to a share than, say, the plumber or architect does. Turn it around: The GC takes on a job that has no need for an electrician. Should the electrician expect a share? I think not. Nor does the electrician, as an independent contractor, have any expectation that he will get any future electrical work - the GC is absolutely free to use someone else. That's an essential part of being an independent contractor: the right to work for whomever you wish, whenever you wish. The attempt to draw parallels between employment, and being an independent contractor, is a false argument. The two relationships are completely different. Yet, one fact remains: any agreement is limited in scope, and whatever happens outside the scope of that agreement is irrelevant.
the word contract was a typo. I meant to say contact.So, you think it's okay if the employee goes back on his own time and sells his carpentry services too. I don't. I see that as cutting his own throat...biting the hand that feeds him. Case closed. We'll never agree. Bob's next test date: 12/10/07
This brings up a whole new concept I had never thought about. If we take for granted that the electrical sub also has to advertise and create a client base, we must accept that his work is possibly his best advertisement. In other words, when you do a great job, you are marketing yourself. If the next door neighbor would have asked the sub to do some work, I wonder how that would have been accepted.
After all, the GC is building up a reputation by doing a good job and could consider the next door neighbor a potential client. Thus the GC could make the claim that since the sub was working on the GC's project, which was next door to the neighbor, the sub should also coordinate work through the GC. Maybe even give him a cut?
This is getting to be like world diplomacy with nobody agreeing.
Including the next door neighbor is stretching it beyond reason. Bob's next test date: 12/10/07
Well in practice the GC is going to be in direct contact with the HO maybe for a week or two or several months depending on the size. And the GC's truck/trailer with a sign will be there much of the time.The HO will only see the electrican for a day or two and will have limited contact with him.So if the neighhor does not remember the name on the truck and asks the HO he will probably get a response like this."Huck's electrican did a good job. Verified where I wanted the lights and everything was cleaned up when I got home. I think that his name was Joe or John. Call Huck at ####-xxxx.".
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A-holes. Hey every group has to have one. And I have been elected to be the one. I should make that my tagline.
I have 2 different plumbers that I do a lot of work with. They call me in to do everthing on bathroom remodels except what they want - water and drain lines, sell the fixtures and install. Carpentry, electric, tile, etc. is mine. If one of their original customers calls me for other work and there is any plumbing involved, the plumbing work goes to them. Other than that, there is no problem. I also have several builders that I do new construction painting and tile work for. When they refer customers to me for larger jobs, they don't expect any monetary compensation. They just know that when they need something, I'm going to jump and take care of them. I also like to send them a gift certificate for dinner with a card thanking them for the referral. I don't know if its necessary or if others here would do the same thing, but the referals keep coming.
alh- Your way of doing business is a sound strategy.
Much of the discussion here has been about what is legal or ethical and that is subject to debate and to the particulars of each situation.
Let us not forget that this is a business forum, here to help us improve our business skills. The lessons that I have gleaned from this are that we cannot assume too much and that being clear about our expectations with customers, subs and suppliers is very important. In the absence of this, apologies and working through misunderstandings are a good remedy. It sounds like Huck is on the right track in this area.
Each situation is slightly different but I have noticed that the subs that I have the best relationship with, those that give me referrals, are also the ones that are careful to give me a share of any work that I want. The most courteous and considerate people are often those who least need to be. There must be a lesson there.
I haven't read the entire thread (just the first 20 posts) but I agree with you, Huck.
I want to know what's going on with my customers and my subs. Simple as that.
Are they "my" customers? Yes, they write me checks and call me "their" contractor.
Are the subs "my" subs? Yes, I write them checks and sell the jobs that get them paid.
I want to be in the loop, simple as that.
Do the subs have the right to work directly for our client? Of course! This is a free country!
Do I have the right to ask my subs to keep me in the loop? Of course! Free country again.
Generally subs who cooperate with me (typically not asking that much,at least in my opinion) get along better with me and have a mutually beneficial long term relationship. Subs who don't get along oftentimes have the opportunity to work for our competition.
Jon Blakemore
RappahannockINC.com Fredericksburg, VA
The one thing that I havn't heard anyone bring up is the fact that even though the electrician isn't acting under the GC anymore, he's still able to injure the GC's good standing with the customer.
I've seen it multiple times, where a sub or a helper does side work for a customer, and for one reason or another the situation doesn't turn out good. The most common causes I've seen of this involve dragging a side job out too long (often because they are trying to do the job in their off time, but after a long day they just want to relax at home). The other common problem I've seen is a disagreement about the scope of the work, usually because there is no clear written contract.
Whatever the reason, it can cause a customer to find another GC because they don't want that particular sub or helper around. It can also result in a phone call to the GC complaining about the problems, or for the customer to look specifically for problems with the things that person might have done on the GC's original job. I've even seen a commercial customer hire a guy away for side work, then when it went south, turn it in as warranty work to the original contractor.
Anytime a sub does additional work within a reasonable amount of time after the completion of a project, the sub should at the very least contact the original GC about it. Whether the sub wants to admit it or not, what he's doing at that time still effects the GC's business, hopefully if it's a good sub, he's effecting it in a positive way, but everyone here knows there's always a chance that things will go south with a customer. Which could potentially effect the GC's future income in the negative direction.
Anytime a sub does additional work within a reasonable amount of time after the completion of a project, the sub should at the very least contact the original GC about it.
I think this is a very important part of this whole debate.
If I were to receive that call from the HO and the ink wasn't even dry on the final I'd call Huck up immediately, run the whole thing by him, its just the plain common sense/courtesy thing to do, after all it was Huck that brought me to this deal and I'm not going to screw up a relationship like that, no matter how much I needed the money, this has not a damn thing to do with "the good ole boy network" has to do with common business practices where I come from.
A call 6-8 months down the road on an unrelated matter, that might be a totally different scenario but that isn't the case here.
I wont ever talk to a HO about side work, for one I usually get the idea that they want something done a bit cheaper then the guy that I'm working for will do it, they'd be wrong if that's the case, I'm not giving up my weekends and off time to do some HO a cheap job, second and maybe more importantly, I owe the guy I'm working for the courtesy of not trying to steel away a customer, that he went out and got, while being paid out of his pocket! That's the same damn thing as stealing from him! Don't know how anybody can rationalize that any differently.
Doug
i'm trying to understand the way folks are thinkingcould you explain these a little further?"while being paid out of his pocket!"in the OP case you don't get paid until the GC gets paid, so you aren't being paid out of his pocket, but his customer's pocket. Haven't you signed a lien waiver before that final payment from the GC's customer? If the GC doesn't pay you that final payment you can no longer place a lien on his customer's property."I wont ever talk to a HO about side work"side work? isn't that something an employee does? as an independent contractor it is another job."they want something done a bit cheaper then the guy that I'm working for"again, this sounds like an employee, as an independent contractor, it stands to reason your price would be lower direct than going through a second party, no markup.
bobl Volo, non valeo
Baloney detecter WFR
"But when you're a kibbutzer and have no responsibility to decide the facts and apply the law, you can reach any conclusion you want because it doesn't matter." SHG
Somewhere lost in the discussion is the fact the homeown had a choice. They could have contacted the GC, and chose not to.
"Somewhere lost in the discussion is the fact the homeown had a choice. They could have contacted the GC, and chose not to. "if I have a job for an electrician, why would I call a GC? doesn't make business sense to me.
bobl Volo, non valeo
Baloney detecter WFR
"But when you're a kibbutzer and have no responsibility to decide the facts and apply the law, you can reach any conclusion you want because it doesn't matter." SHG
Bobl
in the OP case you don't get paid until the GC gets paid, so you aren't being paid out of his pocket, but his customer's pocket.
Wrong, if I was hired by the GC(Huck in this case) then I'm being paid by him, not the customer. How do you see it differently? If the customer decided to stiff the GC then I'm still owed my money because the GC is the one that hired me.
"I wont ever talk to a HO about side work"
side work? isn't that something an employee does? as an independent contractor it is another job.
Its not another job when I'm there working for someone else, or in this case, I'd be working for Huck, its his customer, I'm not low enough to go hustling his customer, wouldn't hit on his wife either when he's not around, it's called courtesy!
Now please don't misconstrue the term "his customer", were not talking about owning anybody/anything, but "his customer" refers to someone who he cultivated, probably worked hard to do so. He Shouldn't have to worry about the people that he hired to represent him/his company trying to swoop in and take that away.
"they want something done a bit cheaper then the guy that I'm working for"
again, this sounds like an employee, as an independent contractor, it stands to reason your price would be lower direct than going through a second party, no markup.
I'm not sure what your asking here?
Doug
"Wrong, if I was hired by the GC(Huck in this case) then I'm being paid by him, not the customer. How do you see it differently? "two things, first as described in the OP (or following posts) you're not getting your final draw until after the GC gets his final draw. If he's paying you why do you have to wait? your work is done, you should be paid. second, if you don't get paid who do you lien? ( i wondered how the HO got the electrician's lien waiver since he didn't collect his final draw.""they want something done a bit cheaper then the guy that I'm working for"again, this sounds like an employee, as an independent contractor, it stands to reason your price would be lower direct than going through a second party, no markup."as a business decision you (I think) always want the best value, price included. so paying less isn't being "cheap" but good business sense. in my mind the only places a sub can give a GC a lower price is if he makes less profit and/or does less work. the GC is going to mark up your price, and based on what I've read over the years is, that markup is likely to be in the 40%-50% range. so that's either a lot more work you expect to do by working directly. or a lot of money you are leaving on the table.
bobl Volo, non valeo
Baloney detecter WFR
"But when you're a kibbutzer and have no responsibility to decide the facts and apply the law, you can reach any conclusion you want because it doesn't matter." SHG
Bobl
I'm probably more confused about all this then you are but let me give it a shot.
two things, first as described in the OP (or following posts) you're not getting your final draw until after the GC gets his final draw. If he's paying you why do you have to wait?
those just might be the conditions of the deal that I made with the contractor. Regardless of whether or not the GC gets paid from the HO the GC still owes me the money for services rendered, he's the guy that hired me. Now if the HO stiffs the GC I'm willing to sit down and look at what can be done but I worked for the GC, that's the guy that I send my bill to and that's the guy that sends me a check.
your work is done, you should be paid. second, if you don't get paid who do you lien? ( I wondered how the HO got the electrician's lien waiver since he didn't collect his final draw.
who says the HO got a lien waiver? I'd bet most HO'ers don't even know about securing lien waivers from all the trades. I delt with a HO down in Austin TX, very smart couple, one of them was a very high ranking bank offical for WellsFargo, and they didnt even know about lien waivers from contractors and their subs. The GC I was subing for screwed these people over big time, I mean it was almost crazy the amounts he was screwing them on, I was hired to come in and finish the work and sorta help them out with the subs that were not paid by the GC/scumbag.
as a business decision you (I think) always want the best value, price included.
so paying less isn't being "cheap" but good business sense.
I agree with you 100%, there is absolutely nothing wrong with your thinking on that. I as well as probably everybody else on here looks for the best deal that they can find.
Where I was using the term "cheap" was in the context of me being on a job site, working for someone else, either as an employee or a sub, and the HO approaches me with a deal to do some of the work either on the side or circumvent the GC/boss completely. I don't engage in that business talk, I'm there because of someone else and I wont step on that persons deal.
If a HO approached me with some side work they are probably going to end up with a bill from me that would equal that of the GC, I don't discount for HOers, my price is my price and the lure of side work don't get you any discounts. Now I'm sure it will in other situations but not with me.
in my mind the only places a sub can give a GC a lower price is if he makes less profit and/or does less work. the GC is going to mark up your price, and based on what I've read over the years is, that markup is likely to be in the 40%-50% range.
I've never seen prices marked up that much, I'm sure it happens but I don't recall ever seeing it. Have to be unusual circumstances I think.
so that's either a lot more work you expect to do by working directly. or a lot of money you are leaving on the table.
I probably leave money on the table all the time but I got the future to look forward to, not going to keep looking back and trying to move forward, you'll trip! The old saying about "cant cry over spilled milk" is my thinking on it. I try to learn for further deals but if I sat here dwelling on what I left on the table I'd probably make myself sick, not worth the time to worry about it.
I'm far from a smart business man and maybe equally far when it comes to ethics but I would never consider talking to a HO about work when I'm in there place as a sub/employee of someone else. That subject would have to be OK'd by the someone else(GC or boss) before I engaged in it.
Doug
"I don't engage in that business talk, I'm there because of someone else and I wont step on that persons deal."don't disagree with that, mainly because of the "feeling" issue, on other work. don't agree with talking with subs on business issues on the job at hand.
bobl Volo, non valeo
Baloney detecter WFR
"But when you're a kibbutzer and have no responsibility to decide the facts and apply the law, you can reach any conclusion you want because it doesn't matter." SHG
"again, this sounds like an employee, as an independent contractor, it stands to reason your price would be lower direct than going through a second party, no markup.""You keep forgeting that these are two completely different jobs.GC - I need outlets for 4 scones on the LR walls and a wall switch. The locations are marked on walls. The job site will be clear from 5/21 to 5/24. Lights are model #### at Jones Lighting, they are in stock.6 hours in and out plus 30 minutes picking up lights.OH - I nees some lights in the living room.Visit job site - discuss with OH locations. Spend hr discussing job with HO. HO does not have lights. Tells her to go to Jones Lighing.Week later she calls and says that she picked model ### and set a date to do the job.Electrican goes to Jones Lighting, finds that they are speical order lights and where not ordered. But he still do the rough in. Gets to the job and find that the floors are being refinished.So a day he can't work on this job and can't fill in.Who pays for all of that time?
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A-holes. Hey every group has to have one. And I have been elected to be the one. I should make that my tagline.
My opinion - customer was gained on your dime, not his. At the least, there should be some type of finder's fee paid for you putting the sparky in touch with the business through no work of his own. Marketing and advertising isn't free.