How much to get paid for managing a WC business?


#1

Hey guys!

This is my first post, hope this is in the right section. I just want to take a second to say how awesome it is to have a community as dedicated, open and generous as this- I’ve learned so much already! :smiley:

Here’s the deal:
I currently run my own window cleaning business, which is primarily me with some occasional part time help. While I am in the process of getting my business completely off the ground, I have a standing arrangement with another window cleaning company who I work for as a sub-contractor a few days a week. We have a great working relationship and it’s been a mutually beneficial arrangement. The owner of this company recently approached me with an offer to take over running the day to day operation of his company. He’s at the point where he wants to take a less active role in running his business and hopes to spend more time with his family/ do some traveling. I’m hoping to get some outside feedback on how to approach this.

As it currently stands, I earn 60% commission as a subcontractor (I have my own insurance, vehicle, ladders, equipment etc). If I decided to take him up on his offer to take over managing his business, I think sticking with commission based compensation would probably be the easiest route. Do you agree? In exchange for managing the daily operation of his business as well as still doing a large portion of the work myself, my initial impulse is to aim for around 80% commission. What do you guys think? Have you navigated a similar situation, and if so, how did you structure it?

Thanks, looking forward to hearing your thoughts!


#2

How many employees would you be managing?
How many vehicles?
What type of work (Route/residential/commercial)?


#3

why not buy him out? and even pay him a commission for x amount of years

regardless which way you go have it written in stone


#4
  • 0 employees, 1-2 subcontractors and myself.
  • Ideally any of the subcontractors would have their own vehicles and equipment.
  • Primarily residential work, with some commercial work. Most of the commercial clients are bi-weekly or once a month.

#5

At this point I couldn’t afford to. Also, the current owner bought the business about 6 months ago, not sure he’s interested in selling. It might be a possibility down the road though.

Definitely agree that getting whatever is decided in writing is a good idea!


#6

I don’t understand his taking less active role after 6 months. Maybe i am understanding it wrong .

Question is do you want to continue your business or his.

His likely isnt much pay because responsiblity is minimal.


#7

A bit more info:
He has mentioned that for most of his adult life he has worked hard and always prioritized his business ventures above all else. However now he’s at a point where he wants to spend more time with his adult children and reconnect with family he hasn’t seen in a while. So being very hands-on with his window cleaning business isn’t as appealing as it once may have been for him. Also, the business he purchased has been around for a while and has an established client base, pricing, way of operating, etc.

Good question- ultimately yes, I do want to continue my business. I enjoy the work, being my own boss and have put a lot of time and energy into it, and there’s definitely more financial incentive to running one’s own business. I don’t necessarily see these two options as being mutually exclusive though. One is definitely going to have to take priority though until I decide on the direction to take with my business.


#8

Don’t work too hard for him when you can continue doing it for yourself. Unless you look at it as an experience thing(managing wise).

There’s no way I would give up what I started, for some one else. Back to working for someone. No sir no sir lol

I don’t even see him paying commission anymore. He probably wants to slap you on salary or hourly. Would he really be able to stop working giving away 80%?
I don’t know though, just thinking :slight_smile:


#9

60% profit, net or gross?

Sounds like a raw deal waiting to happen. After taxes, expenses and paying out other subs there wont be a lot left to go around.


#10

I think 80% commission is probably not going to happen. The guy has overhead. Likely more than 20%. Hes gotta make money too.


#11

To me you are looking at two different things here. Do you want to wash windows or do you want to manage someone elses business? BECAUSE the time you devote to his will take away from yours. You are already getting a good % for doing nothing other than washing his clients windows. No answering the phone, booking the job, scheduling the job, confirmation call/email day before, follow up call/email, collecting the $$ depositing the $$ marketing, handling any problems/go backs etc…If you were able to get 80% is the extra 20% worth all that? I would want to negotiate running the business separate from what you are already doing. A % of the overall profits so you have some skin in the game, however if for example he has 3-subcontractors and paying them each 60% that only leaves 40% to work with. For me it doesn’t compute but I’ve had my own business and not interested in all the headaches that come with it. I have been doing contract work for the last 8-years, have all the work I want, get a high % of the job and am very picky about what I will and will not do. Life is good.


#12

Yes, the experience managing piece is definitely part of the appeal for me. Somewhere down the road, I would like to have either employees or subs play a bigger role in my business, so getting some experience would be nice.

I doubt he would be able to stop working from the 20% alone, the company is just not that large. That being said I also don’t have the whole picture. Not sure if he has alternate income streams.


#13

80% gross. Thinking we would each contribute to the operational costs of the business proportional to our respective commission.


#14

Perhaps another option could be to buy the storefront/commercial route. Easier entry cost for you and easier for the owner to let go of.


#15

doesn’t sound like he’s all that interested in his brand new 6 month old venture.

there must’ve been a serious health scare

really tough too build it all on subs unless you’re a large broker of sorts and dealing with huge tickets. like cintas and others


#16

It sounds to me like he is subbing out most of his work anyway, so he never had much of an active role since he just bought the business 6 months ago, he didn’t even build the client base.

He bought the client list, subbed the work out at 60%, and now wants to walk away without any headaches but retain a residual income. Can’t blame him, but what has he really contributed other than the cash to buy the client list?

I wouldn’t buy into any of that, if you are doing his work for only 60% and want 80% to take over, then you could just price the work at 80% and put him out of business, If you are working on 60% now then you know what his pricing scale is like, I know that sounds harsh, but lets face it, you wouldn’t be just managing his business for him, you would be running the whole show while he sits back on his rear doing nothing, which is pretty much what he has done and is doing now.

I would offer to buy him out at the 60-40 split you work at now, where his 40 is the payment for the purchase of the customer list, because I am guessing that if he subs it all then there is minimal equipment that goes with it. Once the buy out is done then you own it and you get 100%. If he truly changed his mind about owning the business and wants to spend time with his family, then he can mark up the sale price to reflect his desired short term gain. Again, he has nothing in it but what he shelled out for the purchase, so if he sells it to you for slightly more, then he still has gained instead of losing anything by his sudden change of heart.

If he doesn’t want to sell at a fair price to walk away, then consider him and his subs competition, and put him out of business. He would still be getting more time with his family. And if he doesn’t want to do a fair market sell out to you then he is not a friend, just a business man trying to profit off of you like he has been. I wouldn’t want to be his sub forever, and that is what you would be only now you have to run his office too. Really? Own it, either buy him out or put him out, but forget doing his work for him while he retires on your sweat.

I think 6 months is enough for him to know that running a window cleaning business is work, and he is not prepared to do any of that. So, he could make some money and still not get his shirt sweaty if he sells out, Just my two cents.


#17

I am very interested in this thread… I am approaching a similar situation and the comments here are very insightful.


#18

drglass, I would be interested in learning more about how you went about getting the subcontract relationships that allow you to really cherry-pick your jobs. I am in a similar situation as you now in my 4th year of business and would definitely like to learn more about subcontracting jobs that make most sense.

Look forward to your reply! You can certainly email me too: olmscheidjordan @ gmail.com


#19

Bob is 100% Correct and I would offer to buy him out if he refuses just stay the course he’ll break. He can have a good little income stream with minimal liability if her sells…When in doubt, wait.