[terrymaloy]

Had a proposition put to me the other day and in theory it sounds OK.
A friend of mine is interested in changing his job and start up carpet cleaning.

He has the capital to set up...machine, van, chemicals, advertising etc and was wanting to use my company name for his business (as I have been established for over 10 years).
Before you start to shoot the idea down, he lives about 25 miles from me, in a different county in fact and is an area I very rarely cover unless I was recommended.

All the phone calls received would come to me, I'd book the job in for him and take a "cut" from the booking...
He wants to come and see me at work next week.

Am I causing myself a possible headache and tell him to go it alone ? or should I give it a go for some extra income ? 

Opinions would be appreciated. Thanks.

[gwrightson]

i would say a non starter,

use your company name !! why ?  because it is a good name and est, what if your reputation is tarnished by him?
I forsee a number of other problems arising also, and I cannot understand why some body who you say has capital would want not want to build his own name and reputation, after all he will still have to all of the marketing for his area surly. I personaly think you would be a fool for the sake of what you believe may be a few extra ££,s

Geoff

[Steve Rothwell]

If it all goes through your company, not only is your reputation at stake, but on your next tax return you will have a very large increase in turnover, and would have to pay the tax accordingly, it may take you above the VAT threshold if you are not already there, and as it would all be going through your business would he be classed as an employee, with all the legal implications to go along with it.

Just a few things to bear in mind I think.

[Doctor Carpet (Ret'd)]

Both Geoff and Hector make perfect sense. Don't touch it with a barge pole.

There are other issues as well. What if you and he have a falling out? How would you dis-entangle your respective business interests? That sort of problem could probably keep lawyers in very fine wine for many years.

Then of course there is the issue of mutual trust. How will you monitor what each of you is doing to ensure there is no underhand working of jobs and/or payment.

Worse case scenario and he tried to impersonate you either with your exisitng clients or with your bank?

It surely is a non-starter. Give him help and advise. Maybe share costs of leaflets taking one side each, but don't do what he is proposing. It can only be storing up problems for the future.

Rog

[diamond]

Can you not look into franchising of some sort
I see it as a great opportunity to boost your business as long as he is ok and as long as you get a contract drawn up.
Worth looking into

[Jim_77]

I wouldn't read any further than Roger's post!  Way too many pitfalls, all might seem rosy now but things rarely stay the same, not once real money is at stake.

When taking on a franchise, I thought losing 10% of my turnover in franchise fees was fairly insignificant.  Then I added up all the thousands I've paid over the years and realise why I'm not driving a Ferrari!!  This same thing will get to him once he has cut his teeth and feels he can stand on his own two feet.

[peter maybury]

There is probably a beneifit in helping him out to find his feet there may even be some benefit in letting him set up a business in a name that could look like it is associated with your business but There are so many people that will poop on you.
I have associations with a lot of other cleaning companies and competitors and it has worked for me but it has taken years to build p the trusts and the associaitions that I have.  It is being subbed on a job and not handing out your own cards to other peoples customers. Most partnerships do not succeed but it is a two way thing- how honest reliable and trustworthy are you because you should expect no more than that from anybody else.  Many of the contracts that I have I could not keep without the cover that others give me when I want a break etc etc.
Peter
www.carpetcleanercardiff.com