VAT is the biggest hurdle for this business if you are mainly residential.
It's a massive hurdle, it's a 20% one.
I can't see the profit margins worth it in a huge business to compensate for the high levels of stress.
Use this game for what it is, great for sole traders and small businesses with good profit margins. Take your profits and invest them elsewhere imo.
That's a bit short sighted Adam. We do all houses and don't have the problems your talking about at all. You simply have do develop your business in the right way. Yes if you have lots of problems now and grow the same business then the same problems will be bigger but not if you make changes to cure those problems. I don't have any bad payers and I do mean none, and I don't have logistic problems either. You never actually pay 20% in vat because of claim backs. I find it's more like 15% at the most sometimes less.
what do you charge for consultations lee?
Consultations ? you mean babble, if you don't want bad payers then get rid of bad payers, if you want to want to employ and stay
below the vat threshold that's not hard either, if you want to build an empire then you really want to be going well past the vat
threshold to make it worth the effort.
From what I'm reading you want to be able to take on a few employees and take a back seat in other words your two employees
have to make enough to pay three wages, with the vat threshold at around £85k it doesn't leave you with a lot of wriggle room.
I think the 85k (or 88k soon) could provide a nice little business setup if you so wanted to do it that way.
2 men 2 vans each turning over 40k a year. Easily do able at 1k a week is 52k each , minus hols sick days and bad weather etc should still see them being able to do the 40k a piece fairly comfortably (even up north)
If there both on 40 hour weeks that 16 5k roughly a piece plus a bit of employer's N.i maybe 17.5k each, obviously running costs on top...
Still should leave you with 40k pre tax profit which is equivalent to what a decent sole trader would turnover on his own.
Obviously you can pitch in as bit an do the other 8k if you want.
Not saying this would interest everyone but it's certainly a viable option if you wanted.
The vat threshold is charged on turnover so instantly the £104k would be hit with at least the lower vat payment which I
think is 12%.
Plus if your able to do £1k a week cleaning windows would you then be in a area where an employee would be happy on £16k
a year ?
I would say in reality you would be very lucky to get anywhere near £40k leftover for yourself.
I'm not on about going over vat I'm on about having 2 employees doing 40k each and maybe yourself doing the odd little bit to come in just under VAT.
Why would they not be happy on 16k.? I worked for 16k for 4 years as a del driver in my last job before going self employed. There were dozens of lads there doing the same.
An employee's mindset is different to ours they just go to work and get paid they dont think about how much the boss is making. Well, maybe some do but there's Millions of employees out there who are happy with their lot.
I disagree mate I think I could get close to 40k pre tax profit.
Nonsense even if you could get two employees desperate to work for around minimum wage which is around the £16k they're certainly not going to burst their humps knocking out £40k each worth of work for you.
But lets say they do, £16k by 2 £32k employee costs lets say £40k all in another £20k in costs, that leaves you £20k with everything cut to the wire.
Not trying to be rude but your dreaming if you think this will work.
Lets have a look...
each employee does 40k a year, they get 4 weeks hols plus stat plus couple of weeks sick/rained off etc
lets say they work 45 weeks out of the 52 in effect, so thats £888 per week they need to turnover
they will likely work for 7 hours a day and have 1 hour break so £177 a day £25 per hour, not a huge target imo..
so they get paid £8 per hour £16,640 each per annum
Employers N.I would be 1169 each
Then you have employers liabilty insurance ?? % £500 per year (correct me here i dont know)
Then fuel for me is about £20 a week, lets call this £25 or £1125 per annum per van
water costs, well if this is run from home ill avoid business rates, i cnat see this being much more than £1000 a year in filters, resin etc
van tax lets say 250 py per van
van servicing/m.o.t - how longs a piece of string?? £1000 a year for both - touch wood
van insurance x 2?? £1000 a year for both ?
accountant and payroll £500
so far we have 42408
dont forget im chipping in a bit to egt this up to 85k, covering holidays maybe or the odd sick day etc
so 85k - 42k
43k
of course im missing a few bits, uniform, equipment, vehicle purchases etc but its not going to effect profits hugely
i might not get quite 40k but i wont be far off...a lot closer to that than 20k
where do you get 20k in costs from?
