Outsourcing work locally on a piecework basis.

[jim_0525]

I'm a one man band making arcade machines. Doing everything myself from home I get by making 1 machine a month, and I could do 2 at a push. Previously when my order book was getting too long I started to think about getting premises and employees but to make it worthwhile needed something like 2 employees and 5 times the sales.

As we come out of covid I'm getting over-run by orders again, and I'm wondering if I can outsource some work locally. The idea is to offer the work on a piecework basis so I have no employer responsibilities. The work package would go like this: I deliver cnc cut wood panels to them, along with vinyl artwork/rubber edging/door hinges. They will do some sanding and prep, and spray the panels black, screw them together, apply the artwork and edging. It's about 15hrs labour plus some drying time and I'd give them 4 or 5days and then collect the assembled shell. If things go well I might get them to do some of the next stages as well eg low voltage wiring.

I've never done something like this before, what do I need to consider ? ie What pitfalls await me?

I've already thought that I shouldn't supply the spray paint cans, as that might put some COSHH liability on me. Obviously I will informally make sure they know how to work safely but it's better to do that from a position of non-responsibility.

 

[pentel]

Expect to pay around £30 / hr for a fully compliant business to undertake this kind of work with a minimum batch size of 10 units.

A retired Fred in a shed will do it a LOT cheaper.

 

[Frank the Insurance guy]

Hi Jim,

First thing is to find a business locally that is up to the task. Give them one machine as a "test" case and to see if you can work with them.

On the liability front - you need to be completely removed from the outsourced company. You only need to supply them with the parts needed. They should have their own tools and equipment and not be supervised by you. If not, you may be deemed to be their Employer with full requirements for Health & Safety, Employers Liability Insurance etc.

 

[Mark T Jones]

Consistency / reliability / responsibility / liability.

TBH, the Fred In A Shed smacks of corner cutting (forgive he pun).

I'd certainly follow @Frank the Insurance guy's advice

 

[Deleted member 335660]

I'm a one man band making arcade machines. Doing everything myself from home I get by making 1 machine a month, and I could do 2 at a push. Previously when my order book was getting too long I started to think about getting premises and employees but to make it worthwhile needed something like 2 employees and 5 times the sales.

As we come out of covid I'm getting over-run by orders again, and I'm wondering if I can outsource some work locally. The idea is to offer the work on a piecework basis so I have no employer responsibilities. The work package would go like this: I deliver cnc cut wood panels to them, along with vinyl artwork/rubber edging/door hinges. They will do some sanding and prep, and spray the panels black, screw them together, apply the artwork and edging. It's about 15hrs labour plus some drying time and I'd give them 4 or 5days and then collect the assembled shell. If things go well I might get them to do some of the next stages as well eg low voltage wiring.

I've never done something like this before, what do I need to consider ? ie What pitfalls await me?

I've already thought that I shouldn't supply the spray paint cans, as that might put some COSHH liability on me. Obviously I will informally make sure they know how to work safely but it's better to do that from a position of non-responsibility.

Hi Jim,

The problem with piecework is quality. You give them 4 days they will try and do it in 3. As you are not employing them it’s a tricky one, but that’s the issue.

It’s difficult to say who will take this on. If it is individuals then you may have issues in terms of accounting for your payments to them if they don’t

I'm a one man band making arcade machines. Doing everything myself from home I get by making 1 machine a month, and I could do 2 at a push. Previously when my order book was getting too long I started to think about getting premises and employees but to make it worthwhile needed something like 2 employees and 5 times the sales.

As we come out of covid I'm getting over-run by orders again, and I'm wondering if I can outsource some work locally. The idea is to offer the work on a piecework basis so I have no employer responsibilities. The work package would go like this: I deliver cnc cut wood panels to them, along with vinyl artwork/rubber edging/door hinges. They will do some sanding and prep, and spray the panels black, screw them together, apply the artwork and edging. It's about 15hrs labour plus some drying time and I'd give them 4 or 5days and then collect the assembled shell. If things go well I might get them to do some of the next stages as well eg low voltage wiring.

I've never done something like this before, what do I need to consider ? ie What pitfalls await me?

I've already thought that I shouldn't supply the spray paint cans, as that might put some COSHH liability on me. Obviously I will informally make sure they know how to work safely but it's better to do that from a position of non-responsibility.

Hi Jim,

The problem with piecework is quality. You give them 4 days they will try and do it in 3. As you are not employing them it’s a tricky one, but that’s the issue.

It’s difficult to say who will take this on. If it is individuals then you may have issues in terms of accounting for your payments to them if they don’t have invoice facilities.

As for safety aspects I leave that to an expert to respond.

 

[pentel]

TBH, the Fred In A Shed smacks of corner cutting (forgive he pun).

I agree.

However the OP may not have the margin or quantities to pay the realistic cost they might encounter when going to a pukka manufacturer.

If he only wants 1 or 2 a month then a one man band start up or semi retired Fred might suit him... for now....

 

[jim_0525]

Mark T is correct, currently I cost my labour at £25/hr for everything, or I return a profit of £25/hr depending how you want to look at it. I am a man in a shed (well garage/workshop).

If I can sub out some of the work at a lower rate that will improve my profitability as well as improve my turnaround time, and get rid of some boring work where I add least value. I also have some simple avenues to increase sales but I've not tried them yet due to lack of capacity.

On the accounting aspect, I'm thinking all I need is a receipt for the work??

There would be a simple contract per job detailing the required result and standard for each part (eg panel 10: external face and two long sides satin black finish to grade B ) as well as the overall assembly and the price. Here is where I would note that the contractor is fully responsible for how they carry out the work, including all legal and safety aspects.

 

[pentel]

If I can sub out some of the work at a lower rate that will improve my profitability

Don't forget to factor in your time for organising, collecting and delivery along with the time spent doing QC and managing this process.

 

[BusterBloodvessel]

Are your premises not big enough that someone could work with you?

As mentioned above I think someone with the skill set who is retired/semi retired would be right up your street for this, coming in doing say 3 x 6 hour days in a week to get it done, once or twice a month. You save on time and cost of delivering all the stuff and collecting it, plus they work under your supervision so you can keep an eye on the quality? Plus of course they might be able to jump on other tasks with you here and there as required.

Not sure why you specifically want to outsource it to someone completely separate rather than look at some casual labour alongside you?

 

[jim_0525]

Are your premises not big enough that someone could work with you?

Not sure why you specifically want to outsource it to someone completely separate rather than look at some casual labour alongside you?

I work from home. Cutting, prep, spraying are done in that sequence in the garage/workshop. And clean assembly is in the house. Spraying is the hardest to integrate with other work due to dust (yes, I've considered a spray shed).

Even if it was feasible/legal/allowable I wouldn't want someone else here anyway, nor am I keen on having an employee.

As well as using someone else's labour, this plan also makes use of their space (eg garage).

 

[BusterBloodvessel]

I understand.

Out of interest, and if you don't mind me asking, when you say "arcade machines" what are you making? Is it like retro games for home users? Replicas of space invaders etc?

 

[jim_0525]

Out of interest, and if you don't mind me asking, when you say "arcade machines" what are you making? Is it like retro games for home users? Replicas of space invaders etc?

Yes, retro-style (but not replica) arcade machines (full-size/stand-up arcade cabinets).

 

[IanSuth]

Do you have a Mens Shed near you, these and other repair shacks etc would attract the type of person you may be looking for, it might also offer them the space to do it off your premises

https://menssheds.org.uk/find-a-shed/