Going it Alone...
Discussion
But out of my comfort zone this one, I've never had any experience with self employment so looking for some basic info.
My wife currently works about 16 hours a week just to provide a bit of extra cash, for a local cleaning company. They're not huge but employee about 10 working mums.
They're a bit hit and miss tho, took months to get a payslip, now there are regular issues with pay being incorrect etc and feedback to my wife from customers is very much hit and miss in terms of service levels, communication etc.
They charge 20 an hour to the customer and pay £12.50 to the staff.
My wife and one of the other girls have talked about going alone, getting out of the gossip, hit and miss reputation and being messed about with pay.
Recognise setting up new would normally need marketing And finding customers etc but They've got enough customers who they currently clean for willing to jump ship plus a couple of ex customers who want her level of service.
They've no intention of trying to start employing people or anything big, just happy to keep themselves in pocket.
But is it worth it? What do they need to do? Register as a company? Self employed? Tax returns?
Aware they'd need insurance, but what else?!
Or do they just put up with the hassle and stay where they are?
My wife currently works about 16 hours a week just to provide a bit of extra cash, for a local cleaning company. They're not huge but employee about 10 working mums.
They're a bit hit and miss tho, took months to get a payslip, now there are regular issues with pay being incorrect etc and feedback to my wife from customers is very much hit and miss in terms of service levels, communication etc.
They charge 20 an hour to the customer and pay £12.50 to the staff.
My wife and one of the other girls have talked about going alone, getting out of the gossip, hit and miss reputation and being messed about with pay.
Recognise setting up new would normally need marketing And finding customers etc but They've got enough customers who they currently clean for willing to jump ship plus a couple of ex customers who want her level of service.
They've no intention of trying to start employing people or anything big, just happy to keep themselves in pocket.
But is it worth it? What do they need to do? Register as a company? Self employed? Tax returns?
Aware they'd need insurance, but what else?!
Or do they just put up with the hassle and stay where they are?
My wife does this too, about the same hours, self employed, working for a holiday let cleaning company, she has insurance
From what I know most cleaners doing the same job, only do half a job
If your wife is good at what she does, I think, in no time she'd be turning work away or employing people if she wanted to build a business
From what I know most cleaners doing the same job, only do half a job
If your wife is good at what she does, I think, in no time she'd be turning work away or employing people if she wanted to build a business
They don't need to register with companies house, they can just work as sole traders. They will need insurance, and I'd suggest a business bank account where all income is directed to, and expenses can come from before any profit is taken out. Keep on top of your paperwork, keep all receipts and do some basic book keeping!
Marketing for something like that shoukd be pretty easy on Facebook, insta etc-my Mrs set up a little business and did a little online course on how to market it on the socials. She followed their advice and got very busy, too busy in fact but she was quite proactive with the marketing initially before word of mouth bookings started coming in.
Tax returns will be required if making a reasonable amount of money, id pay an accountant if you don't understand the rules (I certainly don't) but I know mine saves me more than his fee by doing it right
Finally many people who set up with a pal end up falling out, me included so just be aware that it's possible and set up the business so that everything is transparent in case the worst should happen
Marketing for something like that shoukd be pretty easy on Facebook, insta etc-my Mrs set up a little business and did a little online course on how to market it on the socials. She followed their advice and got very busy, too busy in fact but she was quite proactive with the marketing initially before word of mouth bookings started coming in.
Tax returns will be required if making a reasonable amount of money, id pay an accountant if you don't understand the rules (I certainly don't) but I know mine saves me more than his fee by doing it right
Finally many people who set up with a pal end up falling out, me included so just be aware that it's possible and set up the business so that everything is transparent in case the worst should happen
The feedback she gets from her customers for her & the girl she's considering working with is really good. They are regularly asked to do the cleans as private customers rather than via the company. This is not something she wants to do without doing it properly.
From a customer base point of view they're very confident they could cover the hours they currently work.
The risk coming out of sickness / holidays etc is a good point, however I think they can manage this via the relationships they have with the small customer base.
Wider question is about the technical bits that they need to do....
So as I understand it, they obv need insurance.
Then they need to consider tax etc.
Is there a dummies guide to setting up & running your own small business? Self employed? Sole Trader? A business name???
From a customer base point of view they're very confident they could cover the hours they currently work.
The risk coming out of sickness / holidays etc is a good point, however I think they can manage this via the relationships they have with the small customer base.
Wider question is about the technical bits that they need to do....
So as I understand it, they obv need insurance.
Then they need to consider tax etc.
Is there a dummies guide to setting up & running your own small business? Self employed? Sole Trader? A business name???
I would also consider that 20 quid an hour, when you take into account the overheads of book keeping, insurance, transport, phones, etc will turn into about 50p an hour margin. My guess is that the only way the company she works for can charge 20quid and make a profit is that they have hundreds of cleaners doing this and make a quid or two an hour margin.
jonathan_roberts said:
I would also consider that 20 quid an hour, when you take into account the overheads of book keeping, insurance, transport, phones, etc will turn into about 50p an hour margin. My guess is that the only way the company she works for can charge 20quid and make a profit is that they have hundreds of cleaners doing this and make a quid or two an hour margin.
I think they have about 16 heads working for them. And I think that's part of the problem, why pay is often wrong, delayed etc.
My thread has arrived! At last, my opportunity to flex my industry knowledge ha!
I own a domestic cleaning company, around 15 staff.
Here's my thoughts, in no particular order:
If the company she works for has approx 10 staff, then its very likely that they are over the VAT threshold for the business, so the £20/hr they charge is actually more like £16.67 +VAT. As its a service based business, the percentage of turnover that you can reclaim VAT on is so small as to be negligible.
On that basis, I assume the "staff" are self employed? As someone else mentioned, this is a massive grey area. Actually, in my opinion, it's not grey, its just wrong. It is disguised employment. I know most cleaning businesses work on this model, but the staff are being sent to particular places, at particular times, under instruction, working for the name of the business. They are employed, in my opinion. It is why all our staff are employed at PAYE.
At £16.67 per hour, you aren't making *any* profit. Not if you are doing things that would pass an HMRC inspection, anyway (again, in my opinion)
The reason I mention the above - if your wife is infact self employed (ie she doesnt have any deductions from her pay etc), then she can take clients with her. The company won't be happy, and it's not really the done thing, but there isn't much they can do about it really. I have seen it happen lots of times, and never heard of any legal issues off the back of it. BUT my advice would be that you don't really need to do it - if you are good, you will fill your books quickly, without needing to be sneaky.
My first bit of advice. Charge more than £20/hr. Even if you don't have to contend with VAT. We are just about to put our prices up to £30 (inc VAT) in the new year. You don't have to go that high, but if your wife really is good, then people will pay it.
Provide everything, so the customer doesn't have to worry about stocking up cleaning products or emptying the vacuum.
If you can, set up automated online payments. Get customers set up on Direct Debit, or store a card on file to take payment. We do this, and have zero payment issues. We are cashless, 100%.
And lastly, why does your wife want to set up with another person? I cannot see any upside to it. The downside is that you have to run all your decisions past another person, you have the legal element to having 2 owners. What happens if one is sick, do they still get paid anything? What happens when one person thinks the other isn't pulling their weight etc. It is just asking for trouble, in my experience.
The simplest way to go would probably be this:
Get your own gear, inc vacuum. We stock out a new starter for about £160, and everything is delivered to our door.
If she is self employed at her current place, phase out her work there as she gets customers of her own.
Get Google Reviews
Operate as self employed. Its super simple.
Be reliable. Be contactable.
If you can invoice digitally, and collect payments automatically, you won't have to think about that side of things much.
Shout if you have any questions. Operating as a one man band does strip a huge amount of stress and complexity out. If/when you hire staff, it gets a big chunk harder, but the rewards are obviously far higher if you are happy with the running of a business.
I own a domestic cleaning company, around 15 staff.
Here's my thoughts, in no particular order:
If the company she works for has approx 10 staff, then its very likely that they are over the VAT threshold for the business, so the £20/hr they charge is actually more like £16.67 +VAT. As its a service based business, the percentage of turnover that you can reclaim VAT on is so small as to be negligible.
On that basis, I assume the "staff" are self employed? As someone else mentioned, this is a massive grey area. Actually, in my opinion, it's not grey, its just wrong. It is disguised employment. I know most cleaning businesses work on this model, but the staff are being sent to particular places, at particular times, under instruction, working for the name of the business. They are employed, in my opinion. It is why all our staff are employed at PAYE.
At £16.67 per hour, you aren't making *any* profit. Not if you are doing things that would pass an HMRC inspection, anyway (again, in my opinion)
The reason I mention the above - if your wife is infact self employed (ie she doesnt have any deductions from her pay etc), then she can take clients with her. The company won't be happy, and it's not really the done thing, but there isn't much they can do about it really. I have seen it happen lots of times, and never heard of any legal issues off the back of it. BUT my advice would be that you don't really need to do it - if you are good, you will fill your books quickly, without needing to be sneaky.
My first bit of advice. Charge more than £20/hr. Even if you don't have to contend with VAT. We are just about to put our prices up to £30 (inc VAT) in the new year. You don't have to go that high, but if your wife really is good, then people will pay it.
Provide everything, so the customer doesn't have to worry about stocking up cleaning products or emptying the vacuum.
If you can, set up automated online payments. Get customers set up on Direct Debit, or store a card on file to take payment. We do this, and have zero payment issues. We are cashless, 100%.
And lastly, why does your wife want to set up with another person? I cannot see any upside to it. The downside is that you have to run all your decisions past another person, you have the legal element to having 2 owners. What happens if one is sick, do they still get paid anything? What happens when one person thinks the other isn't pulling their weight etc. It is just asking for trouble, in my experience.
The simplest way to go would probably be this:
Get your own gear, inc vacuum. We stock out a new starter for about £160, and everything is delivered to our door.
If she is self employed at her current place, phase out her work there as she gets customers of her own.
Get Google Reviews
Operate as self employed. Its super simple.
Be reliable. Be contactable.
If you can invoice digitally, and collect payments automatically, you won't have to think about that side of things much.
Shout if you have any questions. Operating as a one man band does strip a huge amount of stress and complexity out. If/when you hire staff, it gets a big chunk harder, but the rewards are obviously far higher if you are happy with the running of a business.
muscatdxb said:
Taking the existing customers is unethical, breach of contract and probably a source of grief from the owners. They’ll also have to do some minimal marketing eventually as that’s not sustainable
Not seeing an ethical issue. We'd need to know if the current employer has had her sign an enforceable non compete which would obviously preclude poaching customers. They clearly should but likely a cleaning company wouldn't have the sense to do so. You're right of course existing customers wouldn't be sustainable but may well be enough to get her off the ground
Thanks all .
Thanks for the detail Wing Commander.
She is employed PAYE at the moment on a zero hour contract. The contract is very basic provided from a generic HR company i think.
I think setting up with another person is because she's a bit worried about doing it and thinks that between them they can cover things a bit easier, cover each others holidays / sickness etc.
So going 'self employed' - what does this actually mean?! And what does she need to do to do it..... i've been PAYE for over 20 years & have zero experience of this - hence the very basic questions.
Thanks for the detail Wing Commander.
She is employed PAYE at the moment on a zero hour contract. The contract is very basic provided from a generic HR company i think.
I think setting up with another person is because she's a bit worried about doing it and thinks that between them they can cover things a bit easier, cover each others holidays / sickness etc.
So going 'self employed' - what does this actually mean?! And what does she need to do to do it..... i've been PAYE for over 20 years & have zero experience of this - hence the very basic questions.
Dan_1981 said:
So going 'self employed' - what does this actually mean?!
In the most simplest of terms, it's doing exactly what she does at the moment plus all of the administration related to running a business: invoicing, purchasing supplies, submitting and paying tax (corporate and possibly VAT), marketing and sales. Dan_1981 said:
And what does she need to do to do it.
Customers.Capital - money to fund the start up; buying equipment and supplies and cover the time needed until such time as customers are won and invoices start getting paid.
Customers.
A separate bank account for all business related transactions.
Customers.
An Accountant. Not essential but highly recommended.
Did I mention customers?
Dan_1981 said:
The feedback she gets from her customers for her & the girl she's considering working with is really good. They are regularly asked to do the cleans as private customers rather than via the company. This is not something she wants to do without doing it properly.
From a customer base point of view they're very confident they could cover the hours they currently work.
The risk coming out of sickness / holidays etc is a good point, however I think they can manage this via the relationships they have with the small customer base.
Wider question is about the technical bits that they need to do....
So as I understand it, they obv need insurance.
Then they need to consider tax etc.
Is there a dummies guide to setting up & running your own small business? Self employed? Sole Trader? A business name???
PH is as good as any guide to be honest. Some of us on here are even accountants From a customer base point of view they're very confident they could cover the hours they currently work.
The risk coming out of sickness / holidays etc is a good point, however I think they can manage this via the relationships they have with the small customer base.
Wider question is about the technical bits that they need to do....
So as I understand it, they obv need insurance.
Then they need to consider tax etc.
Is there a dummies guide to setting up & running your own small business? Self employed? Sole Trader? A business name???
And my advice would always be to talk to an accountant early on in proceedings.
Dan_1981 said:
Thanks all .
Thanks for the detail Wing Commander.
She is employed PAYE at the moment on a zero hour contract. The contract is very basic provided from a generic HR company i think.
I think setting up with another person is because she's a bit worried about doing it and thinks that between them they can cover things a bit easier, cover each others holidays / sickness etc.
So going 'self employed' - what does this actually mean?! And what does she need to do to do it..... i've been PAYE for over 20 years & have zero experience of this - hence the very basic questions.
"Setting up with another person" is vague and unclear.Thanks for the detail Wing Commander.
She is employed PAYE at the moment on a zero hour contract. The contract is very basic provided from a generic HR company i think.
I think setting up with another person is because she's a bit worried about doing it and thinks that between them they can cover things a bit easier, cover each others holidays / sickness etc.
So going 'self employed' - what does this actually mean?! And what does she need to do to do it..... i've been PAYE for over 20 years & have zero experience of this - hence the very basic questions.
A person who runs a business in their own name, trading as an individual, is referred to as a "sole trader" (or, rather sloppily "Self Employed")
If a business is set up with two or more individuals, it is a business partnership and the rules are a bit more complex than a simple sole trader
So, getting things right from the very start is absolutely essential.
Did I mention the word "accountant" earlier?
We partner with a few cleaning agencies, if she's managing the cleaners definitely don't underestimate the time and costs when calculating prices, and it's hard to complete purely on price when some people with no overheads will offer to do it cheaply for cash.
The feedback we were getting from clients was finding decent and reliable cleaners was limiting growth but with covid, working from home, and the cost of living it has changed that somewhat.
The employment side can be a little bit of a minefield, last month we concluded an enquiry from HMRC, we got the result we wanted but it was fairly stressful for the client nonetheless.
The feedback we were getting from clients was finding decent and reliable cleaners was limiting growth but with covid, working from home, and the cost of living it has changed that somewhat.
The employment side can be a little bit of a minefield, last month we concluded an enquiry from HMRC, we got the result we wanted but it was fairly stressful for the client nonetheless.
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