Contracting business model

[SERVALNET]

Hi, I'd like to start a contracting business (basic: I get the jobs and pay subcontractors to do the work). Could you point me to any similar business model examples or do you have any tips for working with subcontractors? My biggest challenge so far while researching is pricing, and VAT.. Is contracting-only a solid business model or flawed?

Any help is much appreciated.

 

[Mr D]

It can be done - you have the financial reserves to pay your subcontractors until the client pays you?
One tiny flaw seen a few times over the years - if the client goes under owing you money... say like Carillion did. Whether you'd have insurance, whether your business would survive.

 

[SERVALNET]

It can be done - you have the financial reserves to pay your subcontractors until the client pays you?

I hadn't thought of that as assumed I'd pay when the client pays, but yes, thankfully. Great point.

 

[billybob99]

Hi, I'd like to start a contracting business (basic: I get the jobs and pay subcontractors to do the work). Could you point me to any similar business model examples or do you have any tips for working with subcontractors? My biggest challenge so far while researching is pricing, and VAT.. Is contracting-only a solid business model or flawed?

Any help is much appreciated.

I did this for a good few years, but it depends on the space you're in.

Back in the day, the profit margin was very high and a 50% deposit was required upfront. The deposit usually covered 100% of the subcontractors cost.

Without knowing more details its hard to say, but subcontractors can be a pain in the butt.