# Past Customer now using my subs?!?!



## Gough (May 1, 2010)

WisePainter said:


> I have been contacted by clients outside of a G.C. I sub'd for. From the other side, it was awkward, but $16,000 of work over '09-'10 cured my ills quickly enough...
> 
> 
> 
> However I would NOT mutiny during a contract for any amount.


I think this last is a good point. I'll "dance with the one what brung me," but after that dance, I'm a free agent.


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## pinwheel (Dec 7, 2009)

480sparky said:


> Warning: Free Enterprise At Work!


:thumbup: Sorry boys, but I build my own business independently. Just because I do work for GC's, don't mean they own me or my company. When people ask me for referals, I refer the guys that give me work, just like they refer me their floor work. Beyond that, I owe them nothing & they owe me nothing. Unless they wanna start paying my advertising.:whistling



blackbear said:


> proper thing would be for the sub to throw you a bone. I have been in this situation plenty of times. I usually will offer the gc something, most often they never take it.


Typically, when a GC refers me work, at the end of the job, I get them a $50-100 gift certificate at a local restrant.


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## BamBamm5144 (Jul 12, 2008)

What is with all these non compete claus garbage?

If I work for you and quit, I can go work for someone else doing the same thing. If both companies get invited to bid on a job, and I show up for my new employer and win the contract, there is nothing you can do besides be mad.


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## contractorjay (Dec 22, 2009)

BamBamm5144 said:


> What is with all these non compete claus garbage?
> 
> If I work for you and quit, I can go work for someone else doing the same thing. If both companies get invited to bid on a job, and I show up for my new employer and win the contract, there is nothing you can do besides be mad.



not garbage! just business. i have mouths to feed so i use my head to think of ways of not getting jobs taken from me that could potentially be mine.


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## BamBamm5144 (Jul 12, 2008)

contractorjay said:


> not garbage! just business. i have mouths to feed so i use my head to think of ways of not getting jobs taken from me that could potentially be mine.


If only they held up in court...


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## maninthesea (Nov 11, 2008)

I would say the non-compete contracts may not stand up in court but if they keep his subs from competing they are working fine. I doubt it would be worth his while to take a sub to court if he found him violating the noncompete contract. But it would make explaining why he has found a new sub for that trade a short conversation.

Just sayin'


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## Gough (May 1, 2010)

JCarsten said:


> Two of the subs (so far) have asked me what markup should be on it for me- which is good...


I think you may be optimistic on that. I've also seen specialty (sub) contractors who are armed with that information use it to increase their own bid to the HO. If you're marking on 25% and they only mark on 20% to the HO, they look like winners.


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## loneframer (Feb 13, 2009)

Well, as a career sub-contractor, I believe it's the subs that make the GC look good. In many cases, better than he would without them.

Just putting the horse in front of the cart here. Mutual respect, no less.:thumbsup:


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## contractorjay (Dec 22, 2009)

gc's got a pretty tough jobs. it's not all pencil pushing.


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## 480sparky (Feb 1, 2009)

contractorjay said:


> gc's got a pretty tough jobs. it's not all pencil pushing.



So that means subs are required to enter into "indentured servitude"?


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## loneframer (Feb 13, 2009)

contractorjay said:


> gc's got a pretty tough jobs. it's not all pencil pushing.


I agree, but it's a mutual relationship.

A good GC with s#!t subs is a s#!t builder.

A s#!t GC with good subs is a good builder with bad business skills.


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## contractorjay (Dec 22, 2009)

loneframer said:


> I agree, but it's a mutual relationship.
> 
> A good GC with s#!t subs is a s#!t builder.
> 
> A s#!t GC with good subs is a good builder with bad business skills.



i completely agree.


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## Gough (May 1, 2010)

Present company excepted, I think there are a lot of "paper contractors" who were only around for the boom time of the '90s and early '00s. They could pa...I mean mark up all of their subs' bids and make a good living without a much heavy lifting. Now, in leaner times, clients are taking a much harder look at what they'll actually get for that 15-30% premium. GC's who are aren't able to make it clear why it's worth paying that price are in trouble.


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## contractorjay (Dec 22, 2009)

Gough said:


> Present company excepted, I think there are a lot of "paper contractors" who were only around for the boom time of the '90s and early '00s. They could pa...I mean mark up all of their subs' bids and make a good living without a much heavy lifting. Now, in leaner times, clients are taking a much harder look at what they'll actually get for that 15-30% premium. GC's who are aren't able to make it clear why it's worth paying that price are in trouble.



completely agree.


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## jarvis design (May 6, 2008)

Up here in Canada, Canada Revenue has a book that lists all the conditions that have to be met in order to be a sub-contractor. 
A friend of mine who owns a large window/siding/etc. company had a lot of subs that worked strictly for him, most of them. He got nabbed by rev canada and was looking at over $200,000.00 in fines, penalties, and all the deductions they thought he should have done. In the governments eyes, they were ALL employees.

One condition is that true subs are free to do what they want. They are not "controlled".

They have done everything they can to stop the bogus "subs".


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## Scribbles (Mar 10, 2009)

A good GC will give me 100k+ a year in business why would I piss on that. If I get a call from a HO I call the GC immediately and ask what % they want and promptly mail a check once finished. Don’t bite the hand that feeds your kids.

I don’t get this it is there f-in customer


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## Gough (May 1, 2010)

jarvis design said:


> Up here in Canada, Canada Revenue has a book that lists all the conditions that have to be met in order to be a sub-contractor.
> A friend of mine who owns a large window/siding/etc. company had a lot of subs that worked strictly for him, most of them. He got nabbed by rev canada and was looking at over $200,000.00 in fines, penalties, and all the deductions they thought he should have done. In the governments eyes, they were ALL employees.
> 
> One condition is that true subs are free to do what they want. They are not "controlled".
> ...


I think this is a real concern with an overly broad non-compete agreement. Once you tell them whom they can work for, the courts may decide that you've exercised a little too much control for a legitimate contractor-subcontractor relationship. OTOH, I doubt that the average freelance roofer or drywallers is about to take you to court as long as your check is good.


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## Gough (May 1, 2010)

Scribbles said:


> A good GC will give me 100k+ a year in business why would I piss on that. If I get a call from a HO I call the GC immediately and ask what % they want and promptly mail a check once finished. Don’t bite the hand that feeds your kids.
> 
> I don’t get this it is there f-in customer


Interesting point of view. Is there a statute of limitation on how long the GC owns that client? I'm not sure which strikes me as more odd: the notion that a GC "owns" a sub or that he "owns" a client.

I think we all understand the notion of a GC's markup, but this is something different. Do you consider it a finders' fee or is it a plain old kickback?

I was surprised when I first encountered the IRS rules on kickbacks. Here's part of it: "*Kickbacks.* You must include kickbacks, side commissions, push money, or similar payments you receive in your income on Form 1040, line 21, or on Schedule C or Schedule C-EZ (Form 1040), if from your self-employment activity. " They also have a section on how to deal with profits from the sale of illegal drugs....


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## LEVELBEST (Dec 28, 2006)

This usually ends up working one of two ways. Either A) If it is a sub that you really work a lot with and have a good relationship with, they either won't take it or they will scratch your back a little. Or B) The relationship between the HO and the sub will head south, and both will be sorry they did it. 

Of course it depends on the trade, but for a lot of my subs they deal with contractors mainly, and not directly with the customer. Usually this is by their own design. Most good contractors leave subs alone and let them do their thing, as long as they are doing it right. Homeowners, on the other hand, tend to be micro-managers and they like to hover. Most subs don't like this kinda thing, that is why they work primarily in new construction and primarily through contractors(mine, anyways).

As far as the homeowner regretting it, they usually do too. Too many people watch HGTV and DIY TV and get a false reality of being a contractor. "Awe, it's easy. All you do is schedule". They are singing a completely different tune with cabinets don't fit properly or fixtures don't fit right, etc....and it was all bc of something that a contractor would have caught early in the process and prevented(hopefully).

Hell, I consider myself to be pretty good, and I question my own motives for being in this business at least once a week, imagine being completely clueless and doing it. One other thing that the HO'er will get when going alone is all the headache of having to make the decisions when the subs DO point out that what should work in "theory", based on the plans, won't work in REALITY and a decision has to be made.

Basically, what I am saying here is this: When you have this happen, just wish the customer luck, turn away and giggle under your breath, as you walk off thinking "you're going to need it", Mr HGTV.

Then, get in the truck and head home for a beer, or on to the next project. :clap::clap: Hope this helps! :w00t:


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## tedanderson (May 19, 2010)

I've signed several non-compete agreements over the years and in every instance, it stipulated that I cannot solicit previous clients generated by the GC, HOWEVER, if they initiate the contact with me, it's perfectly OK.


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