Fairly making money by sub-contracting - New Business Startup

[puffy]

So far job-hunting sucks but I'm always trying. My background is really web development/programming and business but I love electrical installation with a passion but never seem to landed that job so I've decided to give the business side of me another go.

This post is no way advertising but rather to get your deep opinion on the subject.

I am building a website, an interactive one. It will no way, shape or form be similar to ratedpeople. I've used it, never liked it. So let us not discuss that business here. About the website/ mobile app:

1. User logs in
2. User selects house type etc
3. User tells us what needs to be doing etc
4. Maybe pictures / video of the areas etc - this is important to the business

This business will solely sub-contract the job out and we would take 10% - 15% off the profit (when all expenses removed) would that be reasonable? The difficulty I face is that most jobs require an onsite quote. Since I know technology very will, I can use a beautiful app for tradesman. It has killer features where the sub-contractor would do the site visit and finalise the quote based on the customer price range. The customer will select their budget so we know for sure that he/she would give the go ahead once we stick to the price range or give them some wow factor if we go above their budget.


The trust relationship

Sub-contractors will know the actual cost of the project that's why we say the business will take 10% - 15% as we will process all transaction online and with handy technologies which you will use and those techs cost money. Is the percentage range fair?

About the business

We advertise heavily. We give you t-shirts and mobile app. You invoice us after the job is completed. You get paid by BACs. We would minus CIS or you pay your own. Legal way of doing things will be reviewed. We have our own guys to sign off work. We make you happy, you make us happy. Win, win.

 

[hightower]

Sounds like rated people

 

[puffy]

Sounds like rated people

100% nope.

With RP (ratedpeople), you pay fees. You bid (compete) etc. With mine, you wait for a phone call or a notification on an app to go x and do x with a job budget of x. Vey simple. No fuss.

 

[hightower]

How would you vet your tradesmen? Surely users of your app would want to know they are getting suitably qualified, experienced, and conscientious workers.

 

[puffy]

How would you vet your tradesmen?

We would only use registered, qualified tradesmen (companies) with proof of reg and certs etc. Those would be hand-selected based on the areas we would first target. Example:

Birmingham:

Company A would be have CIS, Napit Certs etc, Insurance etc. - Good and trusted company.

 

[Andy78]

You do realise that in your vetting process, membership of a scheme is no guarantee of proper qualifications or experience ?

 

[Spoon]

So you are going to have a "quote based on the customer price range" then take 15% off the profits from this quote.
Can I have my house fully rewired please. My price range is £100 to £120..... It will it work a different way...

 

[puffy]

You do realise that in your vetting process, membership of a scheme is no gu
arantee of proper qualifications or experience ?

I dont understand. Let's say your company is called company A and I sub-contract you out, are you saying I have no way to determine your qualification(s)? Not anyone can register on the website. That process is manual.

So you are going to have a "quote based on the customer price range" then take 15% off the profits from this quote.

Definitely. If their budget is between 1K - 3K then we work within that.

 

[hightower]

I dont understand. Let's say your company is called company A and I sub-contract you out, are you saying I have no way to determine your qualification(s)? Not anyone can register on the website. That process is manual.

I think what we're saying is qualifications is not directly related to performance in many cases.

 

[puffy]

I think what we're saying is qualifications is not directly related to performance in many cases.

Ahh yes. I would not just blindfoldedly select a company based on his/her "Phd's". I'd do my field research and get to know a company before they come on board.

 

[hightower]

Job hunting sucks? If you can round up the work to sub contract to others, why not actually do the work yourself?

 

[Spoon]

I don't see how you can get the customer to give a decent budget. Yes my example, that you ignored, is extreme but the customer just wants to pay as little as possible. I don't see how it can work.
Shouldn't it be a case of:
There is a job. Someone goes out and uses your app to get a figure of how long it will take, how much the bits will cost. The person doing the job then inputs the profit he wants and then you add your 15% on top of that. That is your quote. How can you really go cheaper.

 

[puffy]

Job hunting sucks? If you can round up the work to sub contract to others, why not actually do the work yourself?

Not really important for that. Why not ratedpeople creators do the work themselves? Why not Uber gets their own taxi? See the answer?

I don't see how you can get the customer to give a decent budget.

ratedpeople's users selects a budget. Other successful companies are doing great (in different countries).

Yes my example, that you ignored, is extreme but the customer just wants to pay as little as possible. I don't see how it can work.

You will never know until I put this in production.

Shouldn't it be a case of:
There is a job. Someone goes out and uses your app to get a figure of how long it will take, how much the bits will cost. The person doing the job then inputs the profit he wants and then you add your 15% on top of that. That is your quote. How can you really go cheaper.

In a nutshell: The customer comes on my website. Filling few details about the job. A typical rewire is, let's say 2.5k to 3k, correct? So there goes customer's budget, upto 3k. I will then notify the sub-contractor, via voice, email or through the app with all information the customer supplies. sub goes to client and make final checks just to make sure the job will not go over the 3k. So if job is really 2.6K, sub press a but to say the green light. After the expenses I take my 15%, you get the rest. Happy days.

 

[hightower]

In a nutshell: The customer comes on my website. Filling few details about the job. A typical rewire is, let's say 2.5k to 3k, correct? So there goes customer's budget, upto 3k. I will then notify the sub-contractor, via voice, email or through the app with all information the customer supplies. sub goes to client and make final checks just to make sure the job will not go over the 3k. So if job is really 2.6K, sub press a but to say the green light. After the expenses I take my 15%, you get the rest. Happy days.

Let's say the 'typical rewire' isn't so typical and the sub calculates it as costing £3.2k. Plus he's going to have to add in £480 as your 15% markup, because he's obviously not going to take that hit himself but pass it on to the customer. All of a sudden this 'typical rewire' is £1000 more than the customers bottom end of the budget....

 

[puffy]

Let's say the 'typical rewire' isn't so typical and the sub calculates it as costing £3.2k. Plus he's going to have to add in £480 as your 15% markup, because he's obviously not going to take that hit himself but pass it on to the customer. All of a sudden this 'typical rewire' is £1000 more than the customers bottom end of the budget....

Well first of, the sub will know that customer can only pay upto 3k and he's prepared to lose 15% of that. It's like Im tell you you'll be paid "x". I dont know how the sub-contracting works but I will find out.

There will be a terms and cons that the customer will made very aware of that estimate my exceed their budget of 1k etc.

 

[hightower]

Well first of, the sub will know that customer can only pay upto 3k and he's prepared to lose 15% of that. It's like Im tell you you'll be paid "x". I dont know how the sub-contracting works but I will find out.

There will be a terms and cons that the customer will made very aware of that estimate my exceed their budget of 1k etc.

Not sure if I'm alone, but I just can't see how a job that would cost £3k could be achieved for £2.6k, unless it was done by monkeys. Don't be surprised if the only sparks that take you up on your incredible offer are the sort that fit back boxes with a JCB.

 

[Spoon]

Thanks hightower, you put it a lot better than I do.
This kind of sums it up really "I just can't see how a job that would cost £3k could be achieved for £2.6k, unless it was done by monkeys."

 

[puffy]

Not sure if I'm alone, but I just can't see how a job that would cost £3k could be achieved for £2.6k, unless it was done by monkeys. Don't be surprised if the only sparks that take you up on your incredible offer are the sort that fit back boxes with a JCB.

Im not saying the job will cost 3k nor am I saying it will cost 2.6k. All Im saying is, the website will have a budget range and the customer selects one. If they dont select then that means they're not interested. So if they selects a budget of between 2k to 3k, a sub would go out and make sure it's no more than 3k. I have no problem if they want to say it will cost below 3k. Also the customer will be aware that in some cases they should expect a little bit more than of the budget's max of 3k.

 

[hightower]

Im not saying the job will cost 3k nor am I saying it will cost 2.6k. All Im saying is, the website will have a budget range and the customer selects one. If they dont select then that means they're not interested. So if they selects a budget of between 2k to 3k, a sub would go out and make sure it's no more than 3k. I have no problem if they want to say it will cost below 3k. Also the customer will be aware that in some cases they should expect a little bit more than of the budget's max of 3k.

Why bother having the customer set a budget then, as if that's magically going to make the spark do the job at a cheaper price, if as you've admitted the quote could come back over or under budget. The second most important thing I think is being overlooked is most sparks won't quote, they'll only estimate. So what happens if the subby estimates within budget, but finds half way through the job that it's going to cost another £1000 because something unexpected came up?

I think you've created in your mind a simple solution for a problem that is anything but simple.

 

[Spoon]

the website will have a budget range and the customer selects one.

Please can you elaborate on this. There will be more than one budget range? So in your example there will be a 2k to 3k, then maybe a 3k to 4k then maybe a 4k to 5k.....??
Why would the customer pick the 4k to 5k when he can get it done for 2k to 3k? What is the difference?
or am I just reading this wrong....