Starting a cleaning business and hiring people

[AsifD]

Hi everyone,

So recently I decided that I need to gain experience in starting and running my own businesses and went for a cleaning business due to it having a low barrier to entry but also provide me a lot of experience in several aspects of businesses.

The business
It is a cleaning agency where customers create the order through the website and I then forward a cleaner to it. But the difference here is my plan is to provide the pricing system instead of per hour to be a flat fee based on bedrooms&bathrooms and incorporate some green technologies for one-offs.
The cleaners are supposed to bring their own cleaning supplies, bring themselves to the locations.

The problems I am facing
After working on the website and finally finishing it I have come to the next step which is the employment step.

I understand that HMRC decides what the staff I hire is seen as, but I would like to know if anyone could advise me on what route I should take with regards to contracts for the cleaners.

Self-employed
I could hire the cleaners as self employed, upside is that I do not have to worry about their taxes, SSP/SMP, NIC, not have to pay continuously over a day and instead only pay for/and when they provide the service to the customer (if I understood it correctly), what I mean here is that I do not have to pay the cleaner from 9 to 6 at X amount per hour but instead just pay only for when there are customers requiring a service.
The downside is that I will not have a lot of control over the cleaners, such as quality control (although I could go over and check if the cleaner did it properly or not and then inform them of their job and take actions (only in extreme cases) if necessary)
The self-employed cleaner could also provide the service more cheaper instead and take clients away from me.

Employee
would give me a lot more control, retain clients, allow for training of employees and progression for them, retain employees and provide better customer service.
Downsides here are that I will be paying a lot more (pay an hourly rate from 9-6 even if there are no jobs available) as well as a lot more paperwork.

Zero-hours
A zero hours employee contract seems more feasible, it has the same upsides as a regular employee and less downsides (I only pay for when the employee needs to work) however I do pay SMP, SSP and so on and lots of paperwork (PAYE and so on).

ad-hoc
I have read in one of the threads about hiring employees on an ad-hoc basis for cleaners? I am not sure if that would that not be considered the same as a zero-hours contract just the users labeling it differently?

My plan
At the moment I wish to manage my low funds wisely and generate more so that I can hire the better cleaners permanently and provide them with higher wages than competitors and provide most work to them. Then to turn away from a regular booking agency and provide my own regular cleaners over a larger area delivering consistent work for the customers.

Unfortunately I have been stuck in deciding what route would be best for my current start, at the moment my funds are quite limited and I would like to control how much I spend so I cannot hire a full-time employee and am not entirely sure how much a zero-hours contract would cost me in total (NIC, SSP, MSP, Sick pay etc).

From the three the zero-hours contract seems best route if I want to have the upsides of an employee but pay significantly less, although cost wise self-employed seems best. What would you reckon to be the best route? Any advice is welcome

I do feel like these are questions I should be answering myself in terms of what direction I want the business to go to however I do appreciate some advice and maybe a direction that I could take and learn from. Thank you.

 

[Mr D]

If you want control, employed is your best bet. Say a business wants some rooms cleaned regularly 7am to 8.30am - then employees are able to be told when to work.
If you don't mind as to when the work gets done or who does it, self employed can do it.

Employee you don't need to pay 9 - 6 even if no work, take them on for as you say zero hours until some work is established.
You will have the joy of employers NI, pension payment, holiday pay, sick pay and maybe travel time & costs if you have them working multiple sites.
Oh and uniform. A tabard?

 

[AsifD]

Thank you for your reply,

Essentially the employee states himself what time/days they are free in the system, then if a job arrives I can hand them out to the nearest employee that is available on that day and it is up to them if they accept the role. so I dont mind when they finish but I do mind when they start, although this will be between the client and cleaner the brand reputation and decrease in sales would be on me in case they did not arrive on time. This would still be both self-employed & zero hours right? I was just wondering if all the work required to hire and maintain zero-hours at start is worth it in comparison to making it much simpler by just hiring self-employed people?

I will have to sit down and look at the costs and the rules regarding those mentioned a bit more in depth, I have become a bit confused with how the NIC is paid out/charged still some more learning for me to do. Would a zero-hours employee come out much more expensive than a self-employed cleaner? I definitely should look into the zero-hours some more and do a cost analysis.

For uniform I was thinking of doing that once I gained a bit more funds and started to go towards a more professional and permanent employees route. Felt like a normal navy t-shirt with our logo would be fine.

 

[Mr D]

Zero hours is employed, not self employed. And you won't have the control of the person who is self employed that you do for employees.

Zero hours employee will cost you different per hour, the self employed should charge you based on the fact they have to pay their own pension, national insurance, travel, and cover their own sick pay and holidays.
Up to a point a zero hour employee won't cost you in national insurance. They may not choose to cost you in pension payment.

 

[AsifD]

Thank you and understood ,

I have been looking at zero-hours contract a bit more in detail and since it is my first time hiring people I have been trying to gain as much knowledge in what the employers responsibilities are to its staff, pardon me for any ignorant statements.

Lets see if I got some of the basics right.

Zero-hours contract staff can be considered workers/employees depending on particular things, but this definition is mostly decided by HMRC. In this case they would be considered workers.

Set up PAYE either manually or through accounting software (thus their NIC and income tax is handled but accounting software comes at a price) and pension enrolment has to be done for a staff member once they start to earn £10.000 a year, which as a start up will take a while for us to reach.

I understand that for cleaners on zero-hours they accrue their holiday leave, which is taken from a minimum of 28 days a year. Aswell as how their SSP and SMP is paid out (average pay over a week accross 8 weeks of pay is what should be used to calculate the SSP through gov.uk). No breaks are allowed when theyre cleaning a house, but I will give a break of one hour in between jobs.

Create a Health and Safety instructions list for the staff and to inform HSE of anything through RIDDOR.

Ive gotten some questions that I have found hard to find information on:

Can zero-hours contract staff have rules on that they are not allowed to sell their services to the clients? For example to offer to stop them from offering cheaper rates to the regular customers and essentially take them away from us?
Do I need to pay the cleaners for the time to travel to the client?
And can I request the cleaners to do the cleaning in how they think it should be done as well as that they purchase the equipment and tools themselves and use their own car to get to the job? (In the future I will have a permanent cleaner also train them so that the quality of work becomes consistent).
Would I also need to get an extra insurance for them driving towards the job?

Cheers!

 

[Mr D]

While employment contracts can have rules, can you afford to enforce them?
And yes pay travel time between jobs. And travel to the client. Not to mention travelling expenses.
Why are you wanting employees to provide their own equipment and tools? Again an expense to reimburse?
They'd need some extra insurance to travel on works business, usually just a clause in their policy. You would need that if they are using your vehicles.

 

[Stedurham]

I personally would clean the contracts you currently have then when you need more staff you have an idea how many hours you were doing and employ them to do these hours. Cleaning is usually woman wanting to work around the school hours and usually only wanting 16/20 hours, or that's the cleaners that have been in places where I have

 

[Mr D]

I personally would clean the contracts you currently have then when you need more staff you have an idea how many hours you were doing and employ them to do these hours. Cleaning is usually woman wanting to work around the school hours and usually only wanting 16/20 hours, or that's the cleaners that have been in places where I have

Can also be people wanting work that will fit in around their current job for extra income.
Wife used to work with a couple of women that could work up to 8am but had to go off to full time jobs afterwards. If work not done by 8am, tough.

 

[Salifuj]

I would advice to employ the people. I know we are in the gig economy but having control of your workers is a big plus. The downside to that, i think is the fact that even if you don't get called you still have to pay your employees. I may be wrong on this though.