This was cleared up by forensic dude.
Because Chase was so bad with money and had zero liquidity, Joey was financing the jobs in terms of cashflow, but out of Chase's end if that makes sense.
So Chase's 65% was a gross amount from which Chase received his fees, but also the costs came out of this.
So when a bill came in for materials from a supplier, Joey paid it, and booked it out of Chase's 65%
In this way, provided the client paid deposit and final payment, a job would zero out on Chase's side in terms of costs and fees.
The 35% that is left was Joey's gross margin from which he had to pay the business expenses like the website, himself, accounting, taxes etc
We will never know for sure, but I think we have enough hints to guess that Joey took control of the production budget and paid Chase a flat 15% profit margin because Chase was mismanaging production and the fabrication budgets
Thank you.
My own hubby is a self employed business owner since he retired last year.
He also does welding designs/projects of all kinds.
However when he uses a subcontractor he gets job quotes from several credible subs in the area on each project he has coming up where one or more sub will be needed.
He shows them his draft design which has been approved by the customer, and approximately how long is projected for completion so the subs know how long they will be on that particular project assisting.
The quotes given are not based on any percentages.
They have no idea what his profit margin may be nor do they care or even ask.
They simply quote him the amount of money it will take him to pay them if they work assisting him to complete a certain project for x amount of weeks. They are certified welders.
He gets new quotes with each new project. It keeps the subs competitive knowing he doesnt just get one quote everytime from the same subcontractor.
He deals directly with the material, and supplier business owners himself, and pays them direct.
So the way Joey did it is something I've never seen done before even by other self emoloyed business owners in our area.
The way Joey did it seemed highly risky for Joey, imo. Especially since we know of at least one time CM was supposed to pay MSM out of his percentage cut, and failed to do so. By doing it the way Joey did it...it wound up with CM being grossly overpaid.
Jmo though.