Clean It Up
UK Window Cleaning Forum => Window Cleaning Forum => Topic started by: dai on April 02, 2006, 06:07:18 pm
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This one is for you guys that have full time employees.
How much does an employee have to earn an hour, above his wages. Before you start to turn a profit from employing them?
I think of the costs.
1]Wages
2]National insurance contributions
3]Employee and 3rd party insurance
4] Annual and statutory holidays
5] cost of equipment and van
6] Paying for being rained off.
I'm sure there's more that I haven't thought of.
David St Ives, as a recent employer you must have done the sums. Maybe you can help. Dai
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At least double - and they never understand why - and they'll think you're ripping them off!
Malc of the "No employees if I can help it!" class.
But more seriously - I have teamed up with another guy (non-forum member) for a few of our large jobs (on a 50/50 self employed basis - each providing our own equipment.) and to cover my one contract where I need cover if I go on hols for a fortnight.
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Paper work? takes up your time.
Employment contracts, statement of employment, employment hand books… health and safety and terms and conditions, they needed to know where you stand, the big one is the health and safety hand books you have to get them to read it and sign for it, its law anything happens to YOUR employees YOU are in big problems
Have a read here we us this site a lot for our business http://www.businesslink.gov.uk/bdotg/action/layer?topicId=1073858787
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Thanks poleman, It's no wonder so many of us don't bother. Dai
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Dai
sorry i have only just seen this post ,i will answer tommorrow i am off to bed.
Nite all
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Thanks poleman, It's no wonder so many of us don't bother. Dai
Indeed, I think that myself some times, but the good thing about window cleaning you can earn as much or as little as you like.
Andy
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I was hoping to get an honest answer from an employer who had worked out the figures.
If your round is mainly domestic in an area where you have to compete with guys employing benefit cheats, it seems to me to be unfeasible.
Ian Giles has posted a few times on what average window cleaners earn, and I think he's pretty close to the mark. I once employed a guy that had a job working four on four off. He worked with me for three of his days off.
He was a good guy, but working together only earned 50% more than if I worked alone.
If you were paying a guy £6.50 an hour, and had to pay him for annual and bank holidays, rained off etc, he would need to bring in about £13 an hour every hour he worked. maybe more if you were providing a vehicle.
Franchising, or subbing apart, what are the actual costs of being an employer? Someone must have worked it all out before taking the plunge. Dai
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£6.50 +25%+£3per hour vechical expenses etc.+ 40%profit margin=£18.54+17.5%vat=£21.78per hour x40=£871per wk=£174.20 per day.
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Dai,
I have found that the best way of employing is by paying a percentage of turnover done on the day. If you pay a fixed hourly rate you can easily get stung if you have no work for them or the weather is against you.
If you have two employees working a round for you doing say £400/day we pay them a percentage of that figure, this obviously encourages them to work to earn more. I am not going to divulge the percentage we pay, lets just say they are on a lot better than minimum wage. But they work hard for it and I know I can go on holiday for a fortnight without a worry of whats happening.
What you need to remember is that you will need to pay your employers NI on top of wages (add 8%)
You will also need to pay holiday pay, minimum of 20 days not including bank holidays. The rate of holiday pay is based on the previous 12 weeks earnings (add 8%)
Allow for EL and PL insurance cost increases (between £1200 - £2500 pa)
Clothing - £70/person/year
Higher use of chemicals and greater wear on equipment, they don't look after things as well as you did, as they didn't have to pay for it (it's true!!)
If they are going to be working on their own then you will have extra vehicle costs and insurance, fuel, servicing etc
You also have other costs that may be incurred like: Accounting software for calculating tax and NI, increased end of year accounts cost, your time doing wages and admin, training costs, etc.
If you are not already VAT registered then as your business grows with extra staff this becomes a very likely possibility. You then have the problem of going to all your customers who you have been cleaning for years and saying that you are putting their prices up by 17.5% because you have to now pay VAT. PLUS you have all the hassle of doing your VAT returns.
At the end of the day, employing anyone is a hassle, BUT....one man by himself can only do so much work and earn so much money in a week.
If you want to grow your business so that you are in a position where you can move away from actually going out there and cleaning, then it is the only way of moving forward.
I have gone from working for myself, to using self employed people to help, to now employing and training staff to do the job for me.
One key is make sure you employ the right people with the right attitude from the start and pay them accordingly "Pay peanuts - get monkeys!"
email me if I can be of any further help.
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Great reply Lionheart,
Going the route you have described is exactly why window cleaning is mostly a sole trader occupation!!!
You are quite correct in all you say.
Therefore you have to have the kind of work whereby your employees can indeed do around £200 per day per man.
But surely you have to have a basic minimum built into your wage structure??
I didn't think you could pay purely on piece work for an employee??
That was always the way I did it when I took on lads on a self employeed basis, I gave up in the end though, it was becoming increasingly risky to take lads on in this way :o
And you go through so many guys! Then you find one that can stick at it, a year or 2 goes by and they leave and set up by themselves!!
Over the years I have had 6 do this (Squeaks being the last one, I gave up on employing people after Squeaks and sold him just about all of my remaining domestic round) and 5 of them are still going strong now.
To employ legally and on the books means you have to have the kind of work where they can produce a high enough turn over, on domestic work that takes some doing.
Paul C Smith over on the other forum did a good post on this, he used Doorknockers to generate work, he hasn't been going very long as a window cleaner and is already VAT reg.
If you've got what it takes then it is the road to go down.
If your minimum price for a semi is only £8.00 or less then move along please, forget about employing people. You won't stand a snowballs of making it work.
Er...I fall into that category myself :'( £8.00 is my minimum.
You probably need to be up around £15.00 for the same size job.
If you have what it takes then the sky's the limit, but how many of us have it?
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It all depends on what your business / personal goals are really.
Yes it's costly employing people... But you'll never get rich as a one man band!
I don't employ anyone else (yet)... But my brother helps out now and again with my work (using his own equipment etc) and I just pay him a % of what he does in a day.
Andy
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Lionheart
Employers NI contribution is 12.8%
NOT 8%
Regards
Graham
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Phoenix,
Yes I agree, strictly what you say is true, however this does not apply to the first £94.00 earned per week, which is at 0%
Therefore if an employee is being paid say £250/week before tax, they will be entitled to £94.00 at 0% NIC and the remaining £156.00 will be charged at 12.8% NIC (£19.97).
Over their gross pay this works out at 7.98%.
Obviously for higher earners this figure would increase towards the 12.8% and conversely for lower earners it would reduce towards the 0%.
We use 8% as a guide to the cost of NIC.
Regards
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£6.50 +25%+£3per hour vehicle expenses etc.+ 40%profit margin=£18.54+17.5%vat=£21.78per hour x40=£871per wk=£174.20 per day..
Well that's me out of it then. I don't make that myself.
Thanks guys.
Ian As usual mate, I think you have it spot on,[no pun intended]
There can be no way that a guy with young lads working for him, can undercut my prices and run a legitimate business.
Having to compete with people employing benefit cheats is holding back our business.
This may not be a problem in more affluent areas, where there are well paid jobs to be had, but in an area where national minimum pay rates are the norm, it certainly is.
Whilst I was against licensing window cleaners as they do in Scotland, I am beginning to see the merit of it. If it would put an end to the £30 a day, cash in hand merchants, I would go for it. Dai
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£30 a day Dai , had a chat with a guy in Wrexham only this week and the guy was paying him £20 a day ( he was 17-18 ish ) I nearly fell over me pole :o His driver was from Poland so prob on about £5 a day .
I said I'll pay him £40 a day as I felt sorry for him - now got a new best friend , phones me every night :D
We was both cleaning the same type of house - Mine £12 his £7 , just got to keep the prices right I think and let them have the cheap ....
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Great reply Lionheart,
Going the route you have described is exactly why window cleaning is mostly a sole trader occupation!!!
You are quite correct in all you say.
Therefore you have to have the kind of work whereby your employees can indeed do around £200 per day per man.
are you serious Ian....employees than can earn £200 per day i dont think they exist do they????