# To sub or not to sub? Liability issues.



## Preservationpete (Sep 11, 2015)

I know a lot of people sub jobs out and make a small profit. I've stayed away from this practice due to worries about liability. If the bank doesn't pay for a job, you can't pay the sub, and then you get sued. Is there anyone out there than can offer advice on whether subbing is dangerous or profitable?


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## Ohnojim (Mar 25, 2013)

*Filling in all the blanks dotting i's crossing t's*

is a challenge when you are actually on the job. Your ship better be tight as a drum is all I will say. You better also be prepared to take it on the chin for a while.


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## PropPresPro (Apr 12, 2012)

Preservationpete said:


> . . .Is there anyone out there than can offer advice on whether subbing is dangerous or profitable?


Done correctly it is both.

Same as if you sent a hired employee, the quality of work won't be as high as it would be if you were doing the work yourself so there will most likely be some QC issues, nor will the work get completed as effeciently or at the very least more hands will be in the pie so the profit levels will be lower. Having said that, I can't be in 2, 3 or more places at once, so subbing can definately be profitable too, assuming you've found the right subs - which is not an easy task by any means.

As far as waiting to get paid to pay, WRONG! *If you do not have the money in your pocket to pay for the work you order a sub contractor to complete, you cannot afford to take on the work* - PERIOD! 
Will you get burnt? Maybe. 
Will you learn fast? Yes.
Will you make money? Probably, If not, don't take on any more extra work.


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## NCnewbie (Aug 6, 2014)

My few subs always get paid regardless if I do or not. Not their fault I gave them work from a bad client.


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## Zuse (Nov 17, 2012)

Both.


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## Ohnojim (Mar 25, 2013)

*I sub very little but pay on completion.*



NCnewbie said:


> My few subs always get paid regardless if I do or not. Not their fault I gave them work from a bad client.


I sub trash outs and sales cleans, that's it.


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## madxtreme01 (Mar 5, 2015)

there is a gray area in the sub contracting pay scale. Problem is you need to qc the work to make sure it is done correctly. I wouldn't pay a sub a dime until I personally checked the pictures, reports, and the job site to make sure it was done correctly. Then you can lay out the money to pay the sub. Problem really is that if the work isn't done correctly or if the pics don't show it done correctly you will be liable. So to pay the contractors you hire before you get paid is the correct way to do things, but you must have a very good qc process to limit your liability of not getting paid


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## Zuse (Nov 17, 2012)

NCnewbie said:


> My few subs always get paid regardless if I do or not. Not their fault I gave them work from a bad client.


The expert in anything was once a beginner:vs_cool:


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## Preservationpete (Sep 11, 2015)

Thanks for all the replies, some great knowledge to be gained here. So basically finance the job, sometimes you win, sometimes you lose, and have a solid QC system in place.


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## Ohnojim (Mar 25, 2013)

*Most beginners never become experts*



Zuse said:


> The expert in anything was once a beginner:vs_cool:


at anything.


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## PropPresPro (Apr 12, 2012)

Ohnojim said:


> Most beginners never become experts at anything.


Need a refill there? I see your glass is half empty.
:drink:


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## Ohnojim (Mar 25, 2013)

*I've been woking in this racket for several years*

it's a wonder I even have a glass.


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## NCnewbie (Aug 6, 2014)

PropPresPro said:


> Ohnojim said:
> 
> 
> > Most beginners never become experts at anything.
> ...


"Most"


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## JoeInPI (Dec 18, 2014)

It's also not just about a QC plan. You have to know who you are subbing work to. If I take a job, MY name is on it- regardless of who is doing the work on site. If I don't have confidence that the sub I have given the work to can do the job like I would, they won't get it in the first place. I sub work, and have trust in my subs, and I won't just give work to anyone. If a job I want to sub out doesn't pay enough for me to take care of my subs, I won't take it in the first place. :vs_smile:


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## madxtreme01 (Mar 5, 2015)

JoeInPI said:


> It's also not just about a QC plan. You have to know who you are subbing work to. If I take a job, MY name is on it- regardless of who is doing the work on site. If I don't have confidence that the sub I have given the work to can do the job like I would, they won't get it in the first place. I sub work, and have trust in my subs, and I won't just give work to anyone. If a job I want to sub out doesn't pay enough for me to take care of my subs, I won't take it in the first place. :vs_smile:



Only problem is in this biz it's not only about doing the work correctly, it's being able to document it the way that your supplier wants so they don't have a reason to reduce payment or not pay at all. Sometimes I think that this industry cares more about pictures than actually completing the work.


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## PPPrincessNOT (Nov 11, 2013)

madxtreme01 said:


> Only problem is in this biz it's not only about doing the work correctly, it's being able to document it the way that your supplier wants so they don't have a reason to reduce payment or not pay at all. Sometimes I think that this industry cares more about pictures than actually completing the work.


 Of course they do.. One missed pic or one blurry one and they can no pay your invoice.....


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## JoeInPI (Dec 18, 2014)

madxtreme01 said:


> Only problem is in this biz it's not only about doing the work correctly, it's being able to document it the way that your supplier wants so they don't have a reason to reduce payment or not pay at all. Sometimes I think that this industry cares more about pictures than actually completing the work.


True, but part of my sub completing the job is being able to take pictures, clearly, in focus, that document and protect my interests. It's part of the package to me. I look at it as a whole, not bits and pieces.

Plus, NOT WORKING for those "suppliers" in your biz who will pick apart those work orders should be your eventual goal. In our biz, we don't work for them. Not worth it, other work is too easy to find if you know what you're doing.


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## Craigslist Hack (Jun 14, 2012)

Our licensing rules here have changed so much that I am considering hiring actual employees and doing away with subs altogether. If I hire a licensed sub and he doesn't have W2 employees and work comp like he says he does I get fined and can be held liable. To me in most cases it's better and more profitable to just manage the work in house on my own licenses. There are good subs in this town but we are still taking a chance and usually my costs are less if I keep work in house.


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## JoeInPI (Dec 18, 2014)

all of this stuff should be part of the vetting process. No different than when you are a GC working with trades.


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## Craigslist Hack (Jun 14, 2012)

JoeInPI said:


> all of this stuff should be part of the vetting process. No different than when you are a GC working with trades.



I can run out most jobs quicker than I can screen the subs who want to do them.


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## JoeInPI (Dec 18, 2014)

Ok, literal reading I suppose. You shouldnt have to vet every sub on every job. If you don't already have people you can trust to submit estimates, bids, complete work to you standards and bill correctly, that's a business model flaw. Those people should already be ready to go if you need them.


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## Craigslist Hack (Jun 14, 2012)

JoeInPI said:


> Ok, literal reading I suppose. You shouldnt have to vet every sub on every job. If you don't already have people you can trust to submit estimates, bids, complete work to you standards and bill correctly, that's a business model flaw. Those people should already be ready to go if you need them.


I can't speak for other contractors however we do have a few SOLID subs but sometimes they are tied up. Sometimes you take on a job they can't or won't do as part of a package. Also I have gone through about 6 different plumbers in the last year. I feel like the guy I use now is solid but I felt like that 5 times before him so we will see.

In our market the sub situation will always be somewhat fluid.


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