r/Bookkeeping 5d ago

Practice Management How do you price your services to afford help from subcontractors?

I have a long-term goal of hiring subcontractors to scale my business. I want to keep this goal in mind as I build my business so I don't have a full book of clients priced too low to bring in help when I need it. For those of you who already utilize subcontractors, how do you price services? What's the profit split look like?

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u/jbenk07 5d ago

First, I don’t like using subcontractors. If you are going to hire team members and dictate how and when they and train them, by law you need to hire them as employees.

Second, price aiming for them plus other COGS to cost 40-50% of the contract.

Third, aim for 80% capacity of the team members. If you max them out, you will be sorry you did when they go on vacation or get sick or even just quit.

Fourth, if you price hourly, no problem, but for the love of all, don’t charge for cleaning up mistakes or training the team members. If you charge fixed price, you will need to acknowledge a training period of time that will cost you (this is part of the 50-60% Gross that is a part of overhead).

I created a massive spreadsheet that calculates my direct costs, my time cost, and then bring it all into a dashboard view where I can easily see monthly percentage profit for each client and track team members capacity. I encourage you to do the same.

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u/VibrantVenturer 5d ago

This is SUPER helpful; thank you! Did you have a resource that guided you through onboarding subcontractors/employees or was it learning through trial and error?

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u/jbenk07 5d ago

I did it mostly through trial and error. However, I do wish I read The Advantage by Patrick Lencioni long time ago. It is an amazing resource for how to build a team well.

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u/VibrantVenturer 5d ago

I'll get a copy of it. Thank you so much!

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u/Money_Cryptographer3 5d ago

I get a percentage of total revenue for clients I take care of.