Commercial Cleaning business looking to expand

[vminnear]

Hi guys, I'm new to the forum and enjoy reading your good advice, and I'd love to pick your brains too.

My twin sister and I have been cleaning offices for the last 10 years, we're currently 33 and we've reached the limit on what we can achieve on our own. I'd love to expand the business, so I'm looking to possibly employ people to help. My plan is to focus on high-quality, reliable service and high-quality clients rather than bothering with companies who only want to pay the minimum.

There are quite a few things I need to do before I can start ramping things up:

1. LTD company. We're currently operating as a partnership but if I want to expand a LTD will be more tax efficient, professional and limit the risk to ourselves.
2. Website. I made my website a million years ago, it still does the job and we get enquiries through it but I want to make it look a lot more professional. Happy to invest in getting someone else to do it this time.
3. Google reviews and marketing - I haven't really been investing much time in marketing as we have been happy ticking along with our current jobs, however as I want to expand it would help to get some good testimonials and put ourselves out there a bit more.
4. Work out how much it would cost to employ someone to help. From what I can tell, employing someone costs a business about 1.7-2 times their salary, but I'd welcome input here. This would mean charging the businesses more than I currently am. I'd rather employ than sub-contract as I don't enjoy flirting with the finer points of employment law to stay legal. I'd also like to be able to provide training and uniforms for a professional edge.

The main question I have is do you think employing people is the right route and is it possible to make it work? I know I could get better margins with sub-contracting but I would have no control over how the work is carried out.

Is there anything I'm not taking into consideration?

 

[Socio South West]

The nuts and bolts of employing people make it a no brainer if you want to develop your business, but it does create another tier of stress and additional management that you need to factor in if it is to be successful.

For a small business of your type with a sound client base operating at capacity there is a case for the 'Small is Beautiful' approach, and keeping with what the two of you can manage reasonably without introducing stressful aspects of a larger business.

You are giving pointers - eg 'I don't enjoy flirting with the finer points of employment law' - that are suggesting that neither employment or subcontracting is the way for you to go. Are you prepared to contend with sickness, absence, discipline and all the other factors that you are going to need to address with employees?

 

[fisicx]

@vminnear welcome to UKBF.

1, 2 and 3 in your list are fairly easy to fix. There may be some costs involved as you will need help with these.

I wouldn’t bother with #4. What you could do instead is offer a wider range of services and sell the leads. For example, patio pressure washing, gutter cleaning, garden work, general maintenance. All low cost to market and simple to manage.

 

[Paul Kelly ICHYB]

a LTD will be more tax efficient,

How?

employing someone costs a business about 1.7-2 times their salary

How did you get to this?

 

[Paul Kelly ICHYB]

I know I could get better margins with sub-contracting but I would have no control over how the work is carried out.

Which is more important to you?

 

[vminnear]

How?


How did you get to this?

I don't know if being ltd would be more tax efficient really, I will talk to an accountant about it. I think it will reduce the risk if I want to start ramping things up and looks a bit more professional especially to other businesses.

The 1.7-2 thing is from working out the cost of NIC, equipment, training, sick leave, paid leave etc.. I've been using some online calculators to estimate. Again, I will do more research and try and iron out how much everything is likely to cost.

Regarding margins vs control, it's important to me to be able to build reliable systems to control the quality of the service. The business is all about service and that is hard to do well if everyone is doing things in their own way. If I can't provide a good service, I won't get paid anyway.

 

[Paul Kelly ICHYB]

Being ltd does reduce personal risk but increases admin and costs. It can be beneficial financially, but your accountant will be able to give the best advice.

equipment, training

Wouldn't everybody need this, regardless of the way they are employed?

NI - 15.05%
Holiday - +/- 8%
Pension? - 3%
Sickness? - 1%
What else specifically for the staff (not general shared costs like office)?

For your needs, control has a cost, so margins will be affected.

 

[vminnear]

I don't know if being ltd would be more tax efficient really, I will talk to an accountant about it. I think it will reduce the risk if I want to start ramping things up and looks a bit more professional especially to other businesses.

The 1.7-2 thing is from working out the cost of NIC, equipment, training, sick leave, paid leave etc.. I've been using some online calculators to estimate. Again, I will do more research and try and iron out how much everything is likely to cost.

Also in regards to y

Being ltd does reduce personal risk but increases admin and costs. It can be beneficial financially, but your accountant will be able to give the best advice.


Wouldn't everybody need this, regardless of the way they are employed?

NI - 15.05%
Holiday - +/- 8%
Pension? - 3%
Sickness? - 1%
What else specifically for the staff (not general shared costs like office)?

For your needs, control has a cost, so margins will be affected.

Equipment or training needs to accounted for regardless. Employees would need uniforms though.

Travel costs also need to be taken into consideration if they are to travel between jobs. Not sure how to work that into the calculations accurately.

 

[Paul Kelly ICHYB]

Equipment or training needs to accounted for regardless. Employees would need uniforms though.

Not if you are comparing employment versus contracters/self employed

 

[WaveJumper]

On a slightly different track if your looking to take on larger contracts you will need to get all your H&S, risk assessments / working practises (if not done already) produced and close to hand. You mentioned training already just make sure you keep detailed records so nothing comes back to bite you where it hurts if something goes wrong on one of your sites.

 

[Ian J]

On a slightly different track if your looking to take on larger contracts you will need to get all your H&S, risk assessments / working practises (if not done already) produced

You forgot to mention funding