Hi guys just like to ask some of you who are very experience in this field.
How do you rent out your round?
What kind of things are involved in this?
Your anticipation would be much appreciated.
Regards,
Bosh
I've never rented any of my work out to anyone else but I have rented work from someone before.
The deal was that I took 60% and supplied the water and vehicle etc. Any cheques taken were made out to the main contractor and posted to them periodically. Any cash taken was retained by me and deducted from the final invoice amount. The invoice amount was 60% of the gross price. Any new cleans picked up were 100% on first clean and 60% thereafter. Usually better just to do the first clean outside of the regular arrangement as it messes up the calculations a bit when you are using software.
Going by my own experiences with this, there are several things that would need to be discussed and agreed upon before embarking on this.
1) Should the subcontractor have to wait to be paid until the main contractor is paid?
2) If a customer doesn't pay at all, should the contractor still pay the subcontractor?
3) If the subcontractor isn't to be paid in the event of a customer default, how much say should the subcontractor have over working for a particular customer?
4) What should happen in the case of alleged bad work?
5) How much notice should be given by either party in the event of the business relationship being terminated?
Obviously there needs to be a fair bit of trust in such a business relationship. The above are issues that I encountered when doing this and need to be discussed and agreed upon first. They were issues that didn't occur to me so no agreement was reached.
RE: (1) I had to wait until a customer paid until I got paid. There was no prior discussion about this. This made the payment calculations unnecessarilly complex IMO. In hindsight, if the contractor wished to temporarily retain money in case of problems, I feel that it would have been better to withhold a fixed amount - to be repaid at the end. This would have made the payment calculations much simpler.
RE: (2) I had the bad debts passed onto me. One customer even lied that they had told me to cancel the service so I wasn't paid for two cleans on that job. Fortunately, the amounts involved weren't too high.
RE: (3) I had a very bad feeling about the customer who lied from the start. Had it been my own job, the first clean I did would have been the last. You can get a nose for this sort of thing when you've been W/Cing for a while (though it's possible to bew wrong of course). Of course, you can't cancel someone else's customer if you get a bad gut feeling about them. Not such a problem if bad debts aren't passed on but a potential issue if they are.
RE: (4) There was one allegation of bad work on my part that I was made aware of and the customer deduted some money (deduction passed onto me). Not entirely my fault. I phoned in advance for gate to be left unlocked. Conservatory roof was to be done every time. Customer left large vents open on roof so I was unable to do all of it due to potential leakage. Customer was out so I couldn't ask for them to be closed. The cost of the entire conservatory roof was withheld.
RE: (5) This arrangement went on for about 8 months. I had made up my mind to get more work of my own and end the arrangement - probably this coming Spring as, although it had its uses for me, there's no substitute for having your own work and having more control over your own destiny. Had I terminated the arrangement, I certainly would have given a minimum of a full month's notice. As things turned out, the contractor took on an employe on the PAYE and I was given no notice to end the arrangement. Obviously there are no legal obligations when self-employment is involved but morally, I felt obliged to give the contractor time to take someone on and give them some basic training. Likewise, I feel that it wouyld have been better to give me some opportunity to replace some of the lost income. What made it worse for me was that I had been doing a little PAYE cleaning job for 2 hours per morning. I had just left that at the time. If I had been given more warning from the contractor, I would have kept that job longer. It left me with a financial black hole from which I'm just recovering.
It's probably better to lay out some basic T & Cs before commencing. I've no issue with the contractor over the above matters. Although I feel that some matters could have been handled better, I realise that none of the above happened with malice aforethought. Perhaps we should both have thought it through better, had more discussion about potential pitfalls, and cobbled together some basic ground rules.
Hopefully the above has given you some pointers.
