[Oliver James]

A year ago this month, I changed my business model.

I used to employ, which was a real headache, although I sometimes think that if I had pushed on with it, I could have 'nailed it' eventually.

So, I started working in partnership / sub contracting with quality local window cleaners.


My team has been with me for a year. They are both youngish Eastern Europeans, and they pay a monthly fee of 25% on everything they do. The two potential team members that are lined up for future work (one day a week) will pay a monthly fee of £20. And after that, for any additional days, all future team members after that will pay £30 a month and 30%.


In terms of being genuinely self employed, the authorities take 8 factors into consideration, with these three being the most important.

1. Do they use their own tools?
2. Do you have an obligation to supply work?
3. Do they work under your direct control and supervision?

They get given a list of jobs to do. They provide their own tools and van. They choose what days they work, and they can move jobs around on the schedule if they wish. They work for me for a maximum of 3 days a week so they can build their own rounds.

When they started working for me, they were both billing about £200 a day, and finishing at about 5.

When they work in partnership with me, they bill at least £400 a day (our min charge for a 3 bed semi with no extension and no conservatory is £29) and they are home by 3pm at the latest.

So, they are better off by about £80 a day or about £300 a week. They are making more money for less hours, and they are also saving themselves about 3-5 hours a week in terms of not having to schedule work, notify customers, and chase debt.

The system isn't perfect. I get frustrated by how much time I spend managing them and scheduling the work. I still spend about 4 hours a day running the business so it is a lot more 'high touch' than I would like, and there is no 'residual' income.

Couple of things:

1. Has anyone else tried this and how did it go?

2. Do YOU know anyone in the area who would be interested in working with me in this way?

[Scrimble]

sounds like a nightmare, employing eastern Europeans on a self employed basis, its like a house of cards which will all come crashing down in the end

If you cannot make employing work then you are a lousy business man.

we have some commercial work in areas covered by yourself and as far as working with you I would rather grab the nearest barge pole.

[tlwcs]

When they work in partnership with me, they bill at least £400 a day (our min charge for a 3 bed semi with no extension and no conservatory is £29) and they are home by 3pm at the latest.

Were they slow or just ripping you off?

Now they  work for you for 3 days maximum so they can build their own rounds. I’m going to assume you will get a cut of their own work, where of course they won’t rip you off.

In another thread you are selling leads, why don’t you sell them to your existing subbies
The two threads running with the content, makes no sense
Tony

[Stoots]

No but i have been thinking about doing this recently.

Like you i found/find employing a headache and frachising seems to have a lot of up front costs an a big "buy in" fee, simply building leads and sub contracting work out seems a great business model.

Where about are you btw ? i would be interested in sub contracting a few days off you if your prices are that good. seems to be double what i charge.

[Oliver James]

Thank you for your comments Scrimble.

Yes, it's very true that I'm "a lousy businessman", thank you for reminding me.

That's why you can see me down at busy intersections or down at New Street station after work with a paper cup and a cardboard sign saying:

"Failed Businessman: Please give generously".

Tony, we work with people on two levels. With partners we charge a monthly fee to join the network and a percentage fee on everything they bill. This wouldn't work unless the work was well priced and done on a 12 weekly basis.

I like working with Eastern Europeans. The entire team (4 of us) are JW, (except for me!). In the words of one poster on here: "Unlike British workers they don't turn up at the end of the day with a half completed worksheet and a sob story."

With associates, we sell the leads that we don't want. These are customers that sound like good people over the 'phone, but who want one off work (which we don't do), or who want regular window cleaning but won't sign up to direct debit.

Hi Gomo, thank you for your reply.

If you want a chat about this please email me at oliveAToliverthewindowcleaner.com or text / call me on 07 799 033 759

[Forum Admin]

Hi Oliver, am I right in thinking that you're trying to sell leads to members? Leads that you don't want but they sound like  good people?

[Oliver James]

Yes - please can you send me your prices for placing an advert for this.

[Scrimble]

I stand by my comments, if you cannot build a legit business by giving value to the market place, scaling it up by employing then you are a lousy business man.

subbing work to JW's and eastern Europeans because you have failed at employing and then coming on a internet forum to try and pass off some of your dross is scraping the bottom of the barrel and quite frankly pathetic.

[jonboywalton75]

The thing is, without generalising too much, JW's are usually pretty honest and hard working, Eastern Europeans/JW is a double Whammy

[CleanClear]

They get given a list of jobs to do. They provide their own tools and van. They choose what days they work, and they can move jobs around on the schedule if they wish. They work for me for a maximum of 3 days a week so they can build their own rounds.

If they where cleaning one of your jobs and a neighbour came out, asked for a quote from them and accepted and they got the repeat business. Whose job is it, yours or one to go on their own round ?

[CleanClear]

The thing is, without generalising too much, JW's are usually pretty honest and hard working, Eastern Europeans/JW is a double Whammy

By omission us non JW's and non Eastern Europeans are not honest and hardworking ? 

[Oliver James]

Yes, I feel fortunate to have them on board.

They make sometimes make mistakes, just like everyone else. But the difference between working with them and the people I employed previously is like night and day. It has been a game changer working with them.

They rarely take holidays, and in one year, I've only had them not turn up for work once (and that was because of the van being broken down).

Furthermore, they are real grafters. Last month one of them had a day that included gutter vacuuming and he billed £670 in a day!

As founding members of the front line team, they are on a special deal, they just pay 25% fee, and no monthly fee.

Future team members will pay £30 a month, and 30%.

[Status Check]

So is this set up so you can stay under the VAT threshold?  Am I right in thinking you are just declaring the 25% as turnover?

[Oliver James]

There is a separate bank account set up that is used for Go Cardless payments from customers and nothing else.

Every 14 days I download each partners transactions for the past 14 days from CP.

Then I transfer the entirety of what each partner has billed for the past 14 days into their bank account.

At the end of the month I invoice each partner for the fee and I state clearly on every invoice: “Oliver James is my agent for collecting the cash”.

They pay this by DD.

[STEVE-UK]

Are you bringing in over £85k, if so are you VAT registered?

[KS Cleaning]

Partners, associates, founding members, front line team😂😂😂.......it’s only window cleaning!

[Status Check]

There is a separate bank account set up that is used for Go Cardless payments from customers and nothing else.

Every 14 days I download each partners transactions for the past 14 days from CP.

Then I transfer the entirety of what each partner has billed for the past 14 days into their bank account.

At the end of the month I invoice each partner for the fee and I state clearly on every invoice: “Oliver James is my agent for collecting the cash”.

They pay this by DD.

So there is no legal framework in place to separate the business income like a franchise agreement?
If your present set up got challenged by HMRC I fear you would be skating on thin ice and would be liable for VAT if you are above the threshold.

Simply stating that you are an "Agent" wouldn't impress VAT inspectors. If your window cleaners also couldn't prove that they had window cleaning work other than the work you supplied they will also class you as an employer.

It sounds like you're building a successful business but on unsound foundations.

[Oliver James]

EMPLOYMENT: According to my accountant there are 8 criteria the authorities use to define if someone is employed.

The most important 3 are:

Does X have an obligation to supply work?
Direct Control / Supervision?
Own Tools

There is a new test that the revenue has set up  online that helps you to define if you are an employer or not.....

I make sure that the max days they work are 4, so they have time to do their own work.

VAT
June 2018 to May 2019 I'm over the VAT limit for the first time. You need to be over for 12 consecutive months to be liable for VAT. So I'm looking at a 10-13% VAT bill minus what I can claim back. Not great, and a real schoolboy error on my part to be getting this bill....

 This is what my accountant writes about the VAT issue. It is from a Linked In Thread:

•   Hi Oliver, I have done a little research into your VAT question. I understand how you have interpreted the VAT Notice on taxi companies acting as agents for drivers, however this is a very specific area hence the dedicated VAT Notice. There isn't a similar one for window cleaning, nor general cleaning.   A couple of considerations: Does your business receive payment for the cleaning and then pay the workers their invoices? Or alternatively, do the workers receive the pay directly and your business charges them a percentage or set amount for each business referral?   Self-employed taxi drivers and taxi companies typically acting as agents operate the latter. The taxi driver takes the fares but pays a rental for things like the radio and a royalty per lead/collection they are given. They may also pay a monthly retainer fee.   Unless you operate a similar model to this I think you/your accountant would struggle to present a strong case to HMRC if the turnover of the business exceeds the VAT threshold.   I would suggest writing to HMRC (you or your accountant could do this to present your case) to get clearance in writing.     I hope this helps. My personal opinion would be to maintain the residential business but grow a VAT registered Commercial business also (separate business and ownership structure). Approach clients on business parks, find out where new developments are springing up who wouldn't already have window cleaning facilities in place.     Have a great weekend.    Kind regards


Oliver james  12:18 PM
Here is what I'm proposing with respect to the VAT. 1. Pay VAT bill from when we went over the threshold. 2. Going forward: GoCardless (the direct debit providers) transfer money daily into a separate account of ours that's used for nothing else.  Once a week, we check our software for the amounts collected per partner and that amount is transferred to the partner  We invoice the partners at the end of the month. Because the money passes through one of our accounts we clarify on every invoice to the partners that we are acting as agents in collecting the cash.  We collect payments centrally acting as agents for our partners. The fact that we're acting as agents is stated on every single invoice we produce. The partners pay their partner fees separately. The money from Go Cardless is never ours and VAT doesn't enter into it. What are your thoughts? Oliver

Accountant  2:42 PM
Hi Oliver, 1) Have you exceeded the VAT threshold in the last cumulative 12 months? If so, have you registered for VAT? You normally receive a grace period of 1 month (but check the effective date for VAT) and then you must start charging VAT. So if you only exceeded the VAT threshold last month, you would register this month and then from the effective date (probably 1st of next month) begin charging VAT. 2) You are changing the method of business by acting as an agent for identifying and distributing work/jobs to sub-contractors and collecting payment on their behalf. All monies collected are transferred to your partners either a) less a monthly finders fee or b) you charge them a monthly flat fee or fee per completed job for the work they do.
•   I think you would have a strong case should HMRC contest your reasoning to demonstrate that you are acting as an agent in a similar way that a taxi company does.
•   MAY 24Oliver james sent the following message at 1:35 PM
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Oliver james

Oliver james  1:35 PM
Thank you for your expertise on this, much appreciated.  Enjoy the bank holiday weekend!
•   Accountant Accountant sent the following message at 2:02 PM
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Accountant Accountant

Accountant Accountant  2:02 PM
You too, Oliver

There is a  thread on CIU discussing this, you need to scroll to the second page to get the entire story.

http://www.cleanitup.co.uk/smf/index.php?topic=212994.20

[Status Check]

Thanks for the detailed response.
All I'm saying is just be aware of what you are building.
Your accountant can say anything he likes. He won't be the one at the VAT tribunal, it it comes to that.

[֍Winp®oClean֍]

Sounds like the most complicated, risky and fragile business model you could have thought up!!  It seems to me that at any moment in time this whole thing could go t*ts up and you would be pretty powerless to do anything about it?