60/40 split

[Senior Tech]

Had a aquaintance who did this with a company...

He ended up quitting and sueing the company owner, and winning.

Many problems I see...what happens when he goes back to warranty another techs call?

What about equipment that's under warranty?

I could talk to this individual and ask about the issues he had but I know it would take lotsssssssss of bandwidth.

Not to mention gas prices and he's gotta pay for gas...filled up yesterday and it was $67.00

[markettech]

One problem I see right out of the chute is that if you have a good service tech who is supplying his own service truck, tools, insurance,etc.... and only making 60% of invoice; why wouldn't he just start his own business and make 100% of invoice?

Part of the appeal of being an hourly employee (in my opinion) is that he/she gets paid for hours worked - no more, no less. Any risk of loss of income or profit is bore by the company owner.

Unfortunately, I think if you tell a good tech. that he will need to take on all of the risk and get paid 60% for doing so.........

[trane]

Originally posted by jultzya

Originally posted by self employed 1
it would be a sub contractor relationship. the tech would supply a van and his needed tools to what is expected of him on service calls. he would also cover his own insurance and warranty calls.

Is this van going to have the companies name on it? And is the Tech is going to use invoices under that same name?

Employee, not much of a way around it. If he gets hurt or burns down a house it will be easy to prove he worked for you and you would be liable. If he was doing this for other companies besides you it might work but here if you tell them where to go and what to do every day they are an employee.

[R12rules]

For one thing ... it's illegal in most states and for another, it's not a fair split.



this is still fresh in my mind. I had an offer from a contractor in Austin. He said I supply everything, even job leads and he would split the labor invoice with me 60/40.

I pay all direct expences.
Van maintenance, fuel, repairs, insurance ...
I supply all the tools, insturements and heavier equipment also.
Uniforms, first aid supplies, etc.

He would give me a phone number for the prospect to call in on.
He would give me invoices to write up.
......and nothing more.


So ... realisticlly, let's say you did all the canvassing and turned up some work ... oh ... you are the salesman also.
So you go out there and with all the running around and phone calls and everything else ... you probably have sixety hours a weel invested in HIS BUSINESS!
Billable is maybe 25.

Lets assume your not sharing in the profits of the parts your selling on the invoice.
Let's say your charging $75 an hour:

25 X $75 = $1,875 gross labor
40% of this is $750


not too shabby for a weeks pay .... if your a EMPLOYEE and just out there for thirty or thirty five hours each week!
And your NOT using your own vehicle!
And your NOT swiping your credit card for the fuel that truck is drinking up!
And it's not YOUR equipment you have to buy and use:
ladders, recovery, specialty insturements, etc.

Plus your NOT covered under family medical insurance either!

Plus .... now you have to pay a much higher rate for taxes becuase they are SELF-EMPLOYMENT taxes. No emploYER involved sharing the expense with you. Your on your own, in other words!

And for all this added liability and responsibility and all ... your boss gets HOW MUCH after your paid???

Let's see here ... you get a check for seven-fifty and he gets .... ELEVEN HUNDRED & TWENTY FIVE DOLLARS!
For handing you a form to fill out, for sending the customer a bill and for answering the telephone.
WOW!!!


Hey ... sign me up!!! I'll hire you right now if you'll do all the work and use your own vechile and pay all the bills yourself!!!


Well ... maybe I shouldnt do that.

[self employed 1]

r-12 is that all employers do is sit around and answer the phone and hand out forms? i must be doing somthing wrong?

[oil lp man]

Just like everything, If it sounds too good to be true...
Well, you know.

[didor80]

I just graduated, and looking for a entry level job for a hvac tech. I'm from Crestwood.

[R12rules]

Originally posted by self employed 1
r-12 is that all employers do is sit around and answer the phone and hand out forms? i must be doing somthing wrong?

No, not all are like that.
I just met a contractor in Austin who offered me 60% of the take, with profit on the parts in there also.
And he supplies all the calls, no cold calling at all.

Then I had a phone call from another man, this one near New Orleans. He offers 40% if I drive his truck and dont go on the payroll. That's not bad.
He also offered me 50% if I use my own rig.

Not as good a deal as the first, but alas, I do not presently have my own rig, so I have to go with what I can.
And I'm gonna buy me a decent truck ASAP.

[rickl]

Hey R12,
In a 60/40 split deal you were offered, would you get your share if the customer didn't pay? What about insurance? Did they require commercial auto and the contractor be insured under your policy? What about workers comp? Do they pay that or would you be a true subcontractor? Free to work when and under nobodies control but your own. If I were paying most of the traditional business expenses, a 80/20 would be more appropriate. Or 90/10.