Service Providers on Your Side
Be very careful in your treatment of independent service providers while they are plowing snow for you. You do not want them to be misconstrued as being “employees” as compared to actual “subcontractors”. While you can give them direction – that direction should be limited to what your customers’ expectations are as far as a finished product after the plowing is completed. You must not restrict them from plowing for themselves or other contractors (if you treat them right and pay them as promised – they won’t go elsewhere). Never put your sign on their truck or piece of subcontracted equipment. Do not pay any of their expenses. Require proper insurance coverage from all SP’s. Never pay any SP until they have filled out an IRS Form W-9 for your files. Always issue a proper IRS Form 1099 to the service provider at year-end - and make certain that the subcontractor knows that this income will be reported to the government, as is required by law.
The use of independent service providers is a tool for growth. It is not the only way to grow your snowplowing business, but it may be one of the easiest methods for growth without substantial capital investment on your part. Treat them right, and they will be loyal and productive members of “your team”.