adman

  • Posts: 51
New contract and VAT
« on: October 20, 2021, 10:12:47 pm »
Hi all,

I have been asked to quote a large contract approx £50k per year.  It would be our largest by some distance if I won it.

Currently I am a sole trader,  with two franchisees all paying into my Ltd franchise business and the new contract would presumably have to be with me (with the 2 franchisees helping me complete the work)

The contract will send my sole tradership through the VAT threshold, and as I'm 70% domestic I think I'll only be able to recover some of the additional 20% increase in cost.  We're all full too, and would need at least 4 operators to look after the contract, so would need to find someone ASAP.

My question is, should I bother?  I've been pondering it for 2 days now and can't reach a decision I'm comfortable with.  I've been chasing work and growing my business relentlessly since I started, and can't get my head around passing up this opportunity.  I also don't want to take on a massive contract that will mean a pay cut elsewhere and a head ache...does anyone have any good ideas how to alternatively manage the VAT situation? 

Any advice or experience very much appreciated

Splash & dash

  • Posts: 4364
Re: New contract and VAT
« Reply #1 on: October 20, 2021, 10:28:58 pm »
It might be a simplistic statement but 50k divided by 4 more staffs wages doesn’t seam worth it to me , unless it’s a stepping stone with other work to make it viable .

NWH

  • Posts: 16952
Re: New contract and VAT
« Reply #2 on: October 20, 2021, 11:46:08 pm »
How much time does that contract require a month.

adman

  • Posts: 51
Re: New contract and VAT
« Reply #3 on: October 21, 2021, 12:06:28 am »
Sorry, its 1 more franchisee required to make 4.  It will be once per week for 4 people in total

Soupy

  • Posts: 20510
Re: New contract and VAT
« Reply #4 on: October 21, 2021, 05:32:36 am »
Sorry, its 1 more franchisee required to make 4.  It will be once per week for 4 people in total

One full day you mean?
A fully paid up  memeber of the blue pill community

adman

  • Posts: 51
Re: New contract and VAT
« Reply #5 on: October 21, 2021, 06:32:40 am »

[/quote]

One full day you mean?
[/quote]

Yeah, 1 full day for 4 people each week

windowswashed

  • Posts: 2561
Re: New contract and VAT
« Reply #6 on: October 21, 2021, 06:40:04 am »
Lot of eggs in one basket. Lose that contract after being use to it will hurt. I lost a big contract when I employed and it took quite a time to fill that void. Lot riding on one customer, no wonder it's making you question it. Go with your gut instinct.

colin bird

  • Posts: 1175
Re: New contract and VAT
« Reply #7 on: October 21, 2021, 06:57:55 am »


One full day you mean?
[/quote]

Yeah, 1 full day for 4 people each week
[/quote]

I don't have anywhere near the amount of work as you, one full day for four people works out about £250 per person is that enough when you take into consideration running costs etc,depending where you are based I feel you would get a better return for a full day on domestic,,also your risk would be spread across the board,rather than having a large amount riding on one job,personally I would keep pushing for domestic work ,it may take a while to generate 50k worth of work but it the long run it will generate more income with less risk,and increase the value of your business

Smudger

  • Posts: 13419
Re: New contract and VAT
« Reply #8 on: October 21, 2021, 03:48:32 pm »
If it's going to be £240 per man for the day then it's not worth the hassle either you need to work faster, smarter, harder to get it working for 3 men or pass,

If your having that much trouble deciding to run with it then I'd say it's not for you

Darran
Never argue with an idiot, they will only bring you down to their level, and beat you with experience

adman

  • Posts: 51
Re: New contract and VAT
« Reply #9 on: October 21, 2021, 04:53:05 pm »
If it's going to be £240 per man for the day then it's not worth the hassle either you need to work faster, smarter, harder to get it working for 3 men or pass,

If your having that much trouble deciding to run with it then I'd say it's not for you

Darran

I can quote whatever I like, it's not really about just what the day rate is, although I appreciate any thoughts on what my larger competitors would be charging

If I was an employer, I'd employ another person, put my domestic prices up, and push through the Vat threshold and use this as a stepping stone to growth.

I'm not, I had always planned to stay as a small sole trader and build up a large franchise of smaller businesses.  This contract muddies my waters

adman

  • Posts: 51
Re: New contract and VAT
« Reply #10 on: October 21, 2021, 05:00:24 pm »


One full day you mean?

Yeah, 1 full day for 4 people each week
[/quote]

I don't have anywhere near the amount of work as you, one full day for four people works out about £250 per person is that enough when you take into consideration running costs etc,depending where you are based I feel you would get a better return for a full day on domestic,,also your risk would be spread across the board,rather than having a large amount riding on one job,personally I would keep pushing for domestic work ,it may take a while to generate 50k worth of work but it the long run it will generate more income with less risk,and increase the value of your business
[/quote]

I hear what you're saying, but it's £50k of work.  It's a prestigious client too and might push us into a different league.

  I'll probably put my quote in and not hear back so should probably stop stressing about it lol

Richard iSparkle

  • Posts: 2490
Re: New contract and VAT
« Reply #11 on: October 21, 2021, 09:54:42 pm »


One full day you mean?

Yeah, 1 full day for 4 people each week

I don't have anywhere near the amount of work as you, one full day for four people works out about £250 per person is that enough when you take into consideration running costs etc,depending where you are based I feel you would get a better return for a full day on domestic,,also your risk would be spread across the board,rather than having a large amount riding on one job,personally I would keep pushing for domestic work ,it may take a while to generate 50k worth of work but it the long run it will generate more income with less risk,and increase the value of your business
[/quote]

I hear what you're saying, but it's £50k of work.  It's a prestigious client too and might push us into a different league.

  I'll probably put my quote in and not hear back so should probably stop stressing about it lol
[/quote]

if you decide to quote make sure the price you give is very worthwhile for you.

i would quote high and then some

if you aren't used to quoting a job on this scale. you are likely to underprice it. any mistake could turn into a huge problem

also, if ends up being more hassle than its worth for your franchisees they could just refuse to do it..leaving you in a pickle

also with this type of thing... cashflow could be a big problem for you.

if they are big and slow to pay you, you could end up out of business

personally,  in my position i would quote for it. but in yours, from what you have said, i think i'd dodge it

iSparkle Window Cleaning

www.isparklewindowcleaning.uk

ok cleaning

  • Posts: 649
Re: New contract and VAT
« Reply #12 on: October 31, 2021, 03:11:15 pm »
50k a year contract what will you be cleaning Buckingham  palace?

KS Cleaning

  • Posts: 3929
Re: New contract and VAT
« Reply #13 on: October 31, 2021, 03:30:15 pm »
Sorry, its 1 more franchisee required to make 4.  It will be once per week for 4 people in total
So let’s say the contract brings in £240 per man for a full days work. How much would the franchisees be invoicing you for that day? I wouldn’t  imagine that they would do a days work for any less than £200? This contract would be doable with employees but not franchisees IMO.

Splash & dash

  • Posts: 4364
Re: New contract and VAT
« Reply #14 on: October 31, 2021, 04:09:53 pm »
50k a year contract what will you be cleaning Buckingham  palace?


Ime guessing it’s more than one building there are a lot of contracts out there with big firms for far more than 50k per year

NWH

  • Posts: 16952
Re: New contract and VAT
« Reply #15 on: October 31, 2021, 05:18:29 pm »
All they’ll all be working their 🥜 off for that amount of money again compared to what they’d get on domestics,250 notes for a days constant grafting on a big building 50-60ft high no thanks I’ll stick to my houses.

Ascjim

  • Posts: 218
Re: New contract and VAT
« Reply #16 on: October 31, 2021, 07:54:05 pm »
I really doubt you will get it anyway.

adman

  • Posts: 51
Re: New contract and VAT
« Reply #17 on: November 02, 2021, 05:34:09 pm »
I really doubt you will get it anyway.

That's the spirit 🤣

The quotes gone in and expecting an answer this week.  Will let you know how I get on

Soupy

  • Posts: 20510
Re: New contract and VAT
« Reply #18 on: November 02, 2021, 05:35:12 pm »
I really doubt you will get it anyway.

That's the spirit 🤣

The quotes gone in and expecting an answer this week.  Will let you know how I get on

Good luck 🍀
A fully paid up  memeber of the blue pill community