Starting cleaning business need some advice what is the best way to pay employees and how to get jobs | TruckMount Forums #1 Carpet Cleaning Forums

Starting cleaning business need some advice what is the best way to pay employees and how to get jobs

dagna123

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Feb 22, 2018
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Dagna Banyte
I am in a process of launching residential and commercial cleaning business... I will have few independent contractors that will work for me, what is the best way to pay them, per hour or per job? Also what is the best way to get jobs?? Thank you!!!
 

longkenn

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If they are working for you then they are employees and not independent contractors. If you want to pay back taxes and penalties then, by all means, call them independent contractors. Just be aware that the IRS will not count them as Independent Contractors.

Your statement seems to indicate that you have little experience running a business. I would suggest that you educate yourself before you make the commitment to start a business. What about your business is going to make it succeed? Most businesses fail in the first year, those that make it past the 1 year mark often fail by year 5. Why?

There are several reasons for failures such as failing to plan, undercapitalization, lack of business experience, failure to adopt a business owner mindset rather than an employee mindset and other factors.

I don't mean to discourage you. I would like nothing more than to see you succeed. However, you need to start out of the gate with the right information, the right attitude, and the right motivation.

It is good that you are here seeking information. It is more than what a lot of people do. I would suggest, at the very minimum, going to a community college and taking some business courses. Then develop a business plan before you spend the first dollar on equipment.
 
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dagna123

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Feb 22, 2018
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Dagna Banyte
If they are working for you then they are employees and not independent contractors. If you want to pay back taxes and penalties then, by all means, call them independent contractors. Just be aware that the IRS will not count them as Independent Contractors.

Your statement seems to indicate that you have little experience running a business. I would suggest that you educate yourself before you make the commitment to start a business. What about your business is going to make it succeed? Most businesses fail in the first year, those that make it past the 1 year mark often fail by year 5. Why?

There are several reasons for failures such as failing to plan, undercapitalization, lack of business experience, failure to adopt a business owner mindset rather than an employee mindset and other factors.

I don't mean to discourage you. I would like nothing more than to see you succeed. However, you need to start out of the gate with the right information, the right attitude, and the right motivation.

It is good that you are here seeking information. It is more than what a lot of people do. I would suggest, at the very minimum, going to a community college and taking some business courses. Then develop a business plan before you spend the first dollar on equipment.
Thank you for your input. I am working on my MBA in Business Finance with only few classes left. I do have a business plan as well...I am just looking to start very small and grow by taking "baby steps".... Any feedback is greatly appreciated.
 
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rob allen

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Start at 10 and move up to 20 an hour. Then move to commission and start at 20% then move to more as they earn trust
 

longkenn

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Thank you for your input. I am working on my MBA in Business Finance with only few classes left. I do have a business plan as well...I am just looking to start very small and grow by taking "baby steps".... Any feedback is greatly appreciated.
Good! You will be ahead of the game to some degree with your degree. Check out https://www.irs.gov/newsroom/understanding-employee-vs-contractor-designation

P.S. I can tell you from experience that taking on employees is not baby steps. o_O
 

PistolPete

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If you set yourself up as the middle man then you can sub out the work.
I knew a landscaper in Tampa FL who sold the work and subbed it to local mow n blow guys.
But you have to have a real good understanding of the business.
 
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longkenn

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Yep, you can have subcontractors (AKA independent contractors) but you need to make sure they are truly subs and not employees. They need to have some risk of losing money. If you pay them a set hourly rate then they are an employee. If they don't carry their own liability insurance then they are more than likely an employee. If you tell them when to work and how to work then more than likely they are your employee and not a subcontractor.
 

dallasmaids

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In 2004 when I started my business I paid hourly. It was not long that I discovered percentage of each job was the way to go. After I made the switch things not only were easier, the business boomed. So I am a big proponent of paying percentage.

Also, as mentioned in this thread, you should have employees, not contractors, because it's the law. You can get away with it for a little bit however once you grow the government will notice and come after you.

Anyway, the cleaning industry can be a lucrative industry to be in. And when you make the $$$, go buy a Tesla because it's the best car in existance!

That's my baby in the pic :)
 

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Draeco

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Juel Mendez
I am in a process of launching residential and commercial cleaning business... I will have few independent contractors that will work for me, what is the best way to pay them, per hour or per job? Also what is the best way to get jobs?? Thank you!!!
Please consult with legal counsel before following any of these tips.

However, here are a few points. There are specific requirement for a person or entity to fall as an independent contractor.
1. You cannot define how the scope of work will be performed (the independent contractor establishes this on their own). You can define the tasks required to be completed, but now how. At the time you direct the contractor how to complete the task they become employees.
2. You cannot control a specific time when the work is completed (limited by an agreed time slot based on initial clients needs).
3. You cannot provide any tools, supplies, or equipment to perform the scope of work (unless a rental cost is charged directly to contractor).

Paying a independent contractor should be treated differently than paying an employee. For example.

An employee is assigned a base rate (i.e. hourly/min. wage) which may include some security and benefit calculations such as:

Health and Welfare (vacation, holiday, and sick pay)
Taxes and Insurance (FICA, Medicare, SUI, and Worker's Compensation)

In general an independent contractor carry their own health and welfare and are responsible for their own taxes and insurance. Therefore, while paying an employee $10.00 an hour, an independent contractor may need to be paid $17.19 an hour in order to compensate for their direct costs. This method will also provide some justification on an independent contractor claim with the IRS. The model would look something like this:

Independent Contractor Payment Model
$10.00 hourly base
$5.62 an hour for Health and Welfare
$1.57 an hour for Taxes and Insurance
For a total Hourly Rate of $17.18

If you do not pay your direct employees health and welfare, then you will not need to pay an independent contractor for these benefits. In the eyes of the IRS, the justification must be one to one (employee vs independent).

In Summary:

Employee = direct control + direct costs
Independent Contractor = indirect control + benefits, taxes and insurance are reimbursed
 

Ken Raddon

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Really? You're working on and or getting an MBA and come to a carpet cleaners bulletin board to answer those questions? There are a lot of smart people here but those are questions best asked to a CPA.
 

1ST CHOICE CLEANING

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I am in a process of launching residential and commercial cleaning business... I will have few independent contractors that will work for me, what is the best way to pay them, per hour or per job? Also what is the best way to get jobs?? Thank you!!!
Ok it's been over a year since you made this post please enlighten us on how ot worked out for you.
 

stevenhaugh7

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Steven Haugh
A couple of years back, I worked for a professional cleaning company providing junk removal services in Toronto. Professional cleaners would definitely get you the opportunity to take more rest. In the present situation, it's mandatory to keep our home especially indoor and outdoor area clean for escaping from various diseases. At the time of hiring a junk removal company, the most important step is to choose a provider on the basis of their quality of work. I'm planning to start a new business providing junk removal services. People in Canada are looking to get rid of junk. To be successful, I need to understand the prevailing rates charged and provide services at a low cost for the public. Else, I can take a job with another junk removal company for an initial period so as to gain a better understanding of the junk removal business. What all other things should I consider before starting such a business?
 
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ultrazone

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Segun Abey
Here is a checklist to follow:

  1. Offer Personalized Service and Fair Prices. Spend some time giving free estimates. ...
  2. Manage Your Time Carefully. To be a success, you need to fill up your schedule. ...
  3. Find Your Niche. ...
  4. Use Quality Products. ...
  5. Treat Your Employees Well. ...
  6. Spend Time on Marketing. ...
  7. Focus on the Business Aspect.
 
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