Subcontracting feels easy until a sub fails you mid-project. Self-performing everything feels safe until it kills your capacity. Here is how to decide which work to own.
Every landscape contractor hits a point where the job requires something outside their current capability — irrigation, concrete, electrical, tree work, masonry. You have two options: build the capability in-house or bring in a subcontractor. Neither is always right. The right choice depends on volume, margin, risk tolerance, and how often that work type shows up in your pipeline.
Getting this decision wrong is expensive. Subcontractors who fail mid-project can cost you a client and your reputation. Building in-house capability for specialty work you do twice a year wastes capital and overhead on a resource that sits idle 90% of the time.
The Core Decision Framework
Run three questions before deciding how to handle any specialty scope:
1. How often does this work type appear in your pipeline? If you do irrigation on 4 out of every 5 jobs, you should probably self-perform — the volume justifies a dedicated crew and the equipment investment. If you need an electrician once every six jobs, subcontract it. The fixed cost of in-house capability only makes sense when volume is consistent.
2. What is the margin differential? If you can self-perform a scope at 45% gross margin but the best subcontractor costs you 25% margin after your markup, the 20-point margin difference needs to be weighed against the risk, overhead, and capital cost of bringing it in-house. Run the numbers before assuming self-performing is always better.
3. Who owns the quality risk? When you self-perform, quality is fully within your control and so is any warranty liability. When you subcontract, you still own the client relationship and the warranty — even if the sub did the work. A sub who installs irrigation incorrectly and creates $3,000 in plant damage is your problem to resolve. Factor that risk into your sub markup and your contract terms.
When to Subcontract: The Clear Cases
Subcontract when the work requires a licensed trade you are not in: electrical, plumbing, structural engineering, or permitted retaining wall engineering. These are not just cost decisions — they are legal ones. Working in a licensed trade without the license exposes you to code violations, voided permits, and liability that no markup can cover.
Also subcontract when the equipment cost does not justify ownership. A concrete pump for a retaining wall job costs $600 to $900 per day to rent. If you do three retaining wall jobs per year that need a pump, that is $1,800 to $2,700 in rental versus $45,000 or more to own the equipment. Rent it, price the rental into the job, and move on.
Subcontract work that is specialized enough that your crew cannot achieve professional quality without extensive training. A poorly installed outdoor kitchen gas line or a poorly designed outdoor lighting plan creates liability that lasts years. Better to pay a specialist 25 to 35% margin than to install something that fails and creates a warranty nightmare.
When to Self-Perform: The Case for Owning the Scope
Self-perform work that appears on more than 50% of your projects, where quality is core to your reputation, and where your crew can become genuinely skilled through repetition. Paver installation. Planting. Drainage. Grading. These are the scopes that define your product — do not hand them to someone else.
Self-performing also lets you control the schedule. Subcontractors have their own backlog. When you subcontract a scope that is on your critical path — say, irrigation must be installed before planting — you are at the mercy of the sub's availability. One week of delay on a 3-week project is a 33% schedule overrun with real client impact.
A landscape company in the Austin area that moved irrigation in-house after years of subcontracting it reported a 14-point gross margin improvement on projects with irrigation — from roughly 26% to 40% — once their crew was trained and equipment was amortized. The first year was a wash. Year two and beyond, the in-house capability was a clear win.
"Subcontracting concrete looked cheap on paper. When the sub ran a week late twice in one season and I had to delay two other projects, the real cost was six times the margin I gave up."
How to Price Subcontracted Work So You Make Money On It
Never pass subcontractor costs through at actual cost. You carry coordination risk, schedule risk, and client relationship risk on every subcontractor you hire. Charge for it.
Standard markup on subcontractor costs in landscape construction: 15 to 25% above what the sub charges you. If an arborist quotes you $2,400 for tree removal, you charge the client $2,760 to $3,000. That 15 to 25% covers your coordination time, the risk you carry if they underperform, and the administrative overhead of managing the sub.
Get the sub's quote in writing before you submit your bid. Never estimate a subcontracted scope from memory or from a previous project. Sub prices change. Availability changes. One job where you committed to a sub price that was no longer available cost you the margin on the entire project — and you wore it because you did not get it in writing before bidding.
Track subcontractor costs by job so you can verify your markup held on delivery. The job costing reports guide covers how to set up that tracking.
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Frequently Asked Questions
What markup should I charge on subcontractor work?
Standard in landscape construction is 15–25% above your subcontractor's cost. The exact percentage depends on your coordination risk, the scope size, and whether you are providing any materials or supervision. Higher markup for complex scopes where you are managing the interface between sub and client closely. Lower markup is acceptable for straightforward pass-through work where the sub operates independently with minimal coordination from you.
If a subcontractor does bad work, am I responsible to the client?
Yes — in most cases. You are the prime contractor. You signed the contract with the client. If your sub installs irrigation incorrectly and kills a $4,000 planting, the client will look to you for remedy — not the sub. This is why your subcontractor contracts must include liability and warranty terms that pass the risk back to the sub, and why you should only work with subs who carry adequate insurance. Get certificates of insurance from every sub you hire.
When does it make sense to self-perform rather than subcontract irrigation?
When irrigation appears on more than half your projects and you have the volume to keep a trained irrigation tech busy 3+ days per week. Below that threshold, the overhead of an in-house tech (wages, tools, vehicle, training) does not pencil. Above it, the margin improvement is significant — typically 12–18 points compared to subcontracting. Start by tracking how many projects per year need irrigation before making the investment.
What should a subcontractor agreement include?
At minimum: scope of work description, price and payment terms, start and completion dates, insurance requirements (general liability and workers comp), warranty period and terms, and a clause holding the sub responsible for their own work quality and any damage their crew causes on site. Have an attorney draft a standard sub agreement you use for all subs — it is a one-time cost that protects you on every project.
Can I exclude subcontracted scopes from my warranty to the client?
Sometimes — but it depends on how your main contract is written. If you offer a 1-year workmanship warranty in your proposal, that warranty generally covers the full scope including subcontracted work unless you explicitly exclude it in writing. The safest approach: match your warranty on subcontracted scopes to whatever warranty you receive from the sub. Pass through the sub's warranty to the client with clear documentation.
Edgar Galindo
Co-founder, Ledge
Edgar built Ledge while running a landscape construction company in Central Texas. He writes about estimating, job costing, and building a business that runs without you on every site.