Why I won't grow

[laddergarder]

I wanted to put some honest figures out there and explain why myself and one employee, is as far as I can take my business. In as few words as possible. Warning, this will be long.

I have around 600 customers, with one person working for me. I charge around £1.50 per window for new jobs, but my true average is closer to £1.10 with some older accounts I have had over a decade still paying below £1 ?.

I take in around 50k a year in sales. Spend around 8k on expenses and my employees salery is around 17k. This leaves me about 25k before taxes. 21k after. I take around 13k as a wage for myself and the rest gets set aside for my own pension savings, replacing vans. Etc. 

Now do the maths on my customer numbers and I should be taking in much more. But I do run a bit behind, I loss about a week each year to bad weather, and right off anything between 500 to 1k a year in bad debt. 

Out of my 8k on expenses 5.5k is van related. I have two vans. 

Sounds greats. I only make about 3k after taxes from my employee. 25k sales, less 4k exp, 17k sal, then 1k taxes. Thats not much more than 10 percent of sales. 

It just wouldnt pay, to go above the vat threshold. But thats the least of it. I have had two people working for me for a time, and its allot of work. The more employees the more customers, the more quotes, calls, vans to deal with, the more you have to advertise. The more costs. More chance someone goes off on the sick.

The less and less time you have to clean windows. So you need to take a wage from what your staff are bringing in.

I read an article recent on the gov website that say they plan to hold the vat threshold to push small business into it. With just two employees, I would have to pay vat in the next 3-5 years. Given the rate of the national living wages is expected to rise. 

So for me, it pays to stay small. I will be 20% cheaper than the other guy. 

In my 12 years as a window cleaner, I have seen only two ways to really develop a window cleaning business and grow. Employ staff cash on hand, and pay a fixed percentage, "as self employed" and dont declare there cut as your sales, which I would not do, or focus on comercial, who can claim back vat. 

For me though, small is beautiful. I have two kids, my hours suit my life and I like the freedom that being a self employed window cleaner brings. I wouldnt thank you for a large comerical cleaning business that absorbed all my time.

Just some food for thought, for the new guys looking to grow.

 

[HWCS]

If your happy mate, you earn enough to live not survive and you aint killing yourself then fairplay.

Only thing id say is, is it really worth having an employee?

You maybe aswell to sell him 1/2 or 1/3 of your round and let him go on his own.

 

[laddergarder]

If your happy mate, you earn enough to live not survive and you aint killing yourself then fairplay.

Only thing id say is, is it really worth having an employee?

You maybe aswell to sell him 1/2 or 1/3 of your round and let him go on his own.

He is a member of my family who has worked for me for over a decade. There is also some advantages. For one, if my van is off the road we can double up in the other van.

 

[Dale Transparent]

Good piece @laddergarder, I'm currently considering my options as to where to go next as I can't take on any more work on my own, will definitely take this in to consideration, thanks.

 

[Cleanco]

I wanted to put some honest figures out there and explain why myself and one employee, is as far as I can take my business. In as few words as possible. Warning, this will be long.

I have around 600 customers, with one person working for me. I charge around £1.50 per window for new jobs, but my true average is closer to £1.10 with some older accounts I have had over a decade still paying below £1 ?.

I take in around 50k a year in sales. Spend around 8k on expenses and my employees salery is around 17k. This leaves me about 25k before taxes. 21k after. I take around 13k as a wage for myself and the rest gets set aside for my own pension savings, replacing vans. Etc. 

Now do the maths on my customer numbers and I should be taking in much more. But I do run a bit behind, I loss about a week each year to bad weather, and right off anything between 500 to 1k a year in bad debt. 

Out of my 8k on expenses 5.5k is van related. I have two vans. 

Sounds greats. I only make about 3k after taxes from my employee. 25k sales, less 4k exp, 17k sal, then 1k taxes. Thats not much more than 10 percent of sales. 

It just wouldnt pay, to go above the vat threshold. But thats the least of it. I have had two people working for me for a time, and its allot of work. The more employees the more customers, the more quotes, calls, vans to deal with, the more you have to advertise. The more costs. More chance someone goes off on the sick.

The less and less time you have to clean windows. So you need to take a wage from what your staff are bringing in.

I read an article recent on the gov website that say they plan to hold the vat threshold to push small business into it. With just two employees, I would have to pay vat in the next 3-5 years. Given the rate of the national living wages is expected to rise. 

So for me, it pays to stay small. I will be 20% cheaper than the other guy. 

In my 12 years as a window cleaner, I have seen only two ways to really develop a window cleaning business and grow. Employ staff cash on hand, and pay a fixed percentage, "as self employed" and dont declare there cut as your sales, which I would not do, or focus on comercial, who can claim back vat. 

For me though, small is beautiful. I have two kids, my hours suit my life and I like the freedom that being a self employed window cleaner brings. I wouldnt thank you for a large comerical cleaning business that absorbed all my time.

Just some food for thought, for the new guys looking to grow.

I think the vat threshold was a stupid idea. You should either have to pay vat full stop or not at all. If you don’t start your business with vat in mind you may struggle to get across the threshold once you get there if you don’t. If your only turning 50k a year then I’d bin the second  van off as it’s eating into valuable profits and unless your work is seriously spread out then you shouldn’t have a problem getting round it with a two man crew. 

 

[laddergarder]

I think the vat threshold was a stupid idea. You should either have to pay vat full stop or not at all. If you don’t start your business with vat in mind you may struggle to get across the threshold once you get there if you don’t. If your only turning 50k a year then I’d bin the second  van off as it’s eating into valuable profits and unless your work is seriously spread out then you shouldn’t have a problem getting round it with a two man crew. 

I drop my kids off in the morning, generally get to my first job around 9:15, I can stop and start when it suits. Like today for instance I finished early to take my kids to the dentist. 

My employee on the other hand can still start at 8am. Also he can work the hours that suits him, with two vans. Being self employed I will happily sit in the van with a flask and good book, to sit out showers. Where as with an employee, if the weather is too changable, its more efficient to send them home, and work another day. 

If I am out 8 hours and only do 4 hours worth of work. That fine, its beter than nothing. But with an employ I would send them home and have them work another day, because of the wages cost. 2 vans lets me do that.

I have tried 2 to a van and 3 to van, and it gets less efficent the higher you go. You save time on the job, but not moving between them, dealing with the customer etc. So I prefer to keep us seperate.

I would save maybe 3k, but I might loss half that in productivity. So for the extra 1.5k, I prefer the advantage of having two vans. 

Most days I drive out to a street and I am there for the morning or afternoon. I guess I just like the pace of it when your on your own. I just plod away. Plus your not showing up to odd jobs. With a 2 or 3 man crew for a £10 job.

My employee also does his own collections. Which is another way it takes a bit of weight off me.

 

[Bart90]

I wanted to put some honest figures out there and explain why myself and one employee, is as far as I can take my business. In as few words as possible. Warning, this will be long.

I have around 600 customers, with one person working for me. I charge around £1.50 per window for new jobs, but my true average is closer to £1.10 with some older accounts I have had over a decade still paying below £1 ?.

I take in around 50k a year in sales. Spend around 8k on expenses and my employees salery is around 17k. This leaves me about 25k before taxes. 21k after. I take around 13k as a wage for myself and the rest gets set aside for my own pension savings, replacing vans. Etc. 

Now do the maths on my customer numbers and I should be taking in much more. But I do run a bit behind, I loss about a week each year to bad weather, and right off anything between 500 to 1k a year in bad debt. 

Out of my 8k on expenses 5.5k is van related. I have two vans. 

Sounds greats. I only make about 3k after taxes from my employee. 25k sales, less 4k exp, 17k sal, then 1k taxes. Thats not much more than 10 percent of sales. 

It just wouldnt pay, to go above the vat threshold. But thats the least of it. I have had two people working for me for a time, and its allot of work. The more employees the more customers, the more quotes, calls, vans to deal with, the more you have to advertise. The more costs. More chance someone goes off on the sick.

The less and less time you have to clean windows. So you need to take a wage from what your staff are bringing in.

I read an article recent on the gov website that say they plan to hold the vat threshold to push small business into it. With just two employees, I would have to pay vat in the next 3-5 years. Given the rate of the national living wages is expected to rise. 

So for me, it pays to stay small. I will be 20% cheaper than the other guy. 

In my 12 years as a window cleaner, I have seen only two ways to really develop a window cleaning business and grow. Employ staff cash on hand, and pay a fixed percentage, "as self employed" and dont declare there cut as your sales, which I would not do, or focus on comercial, who can claim back vat. 

For me though, small is beautiful. I have two kids, my hours suit my life and I like the freedom that being a self employed window cleaner brings. I wouldnt thank you for a large comerical cleaning business that absorbed all my time.

Just some food for thought, for the new guys looking to grow.

Refreshingly honest, well done mate.  If you're happy that's what counts. Are you trad or wfp? Just as a pointer and I by no means consider myself an expert but  £500 - £1,000 in bad debt every year seems very very high to me.  Maybe look at ways to reduce this?  I've been trading in my current business nearly 8 years (window cleaning for nearly 12 years) and I've only written off £50 in that entire time for bad debt.  My worst case to date has just come to an end and was only resolved by bailiffs. Are you following up on non payers?

 

[Part Timer]

I wanted to put some honest figures out there and explain why myself and one employee, is as far as I can take my business. In as few words as possible. Warning, this will be long.

I have around 600 customers, with one person working for me. I charge around £1.50 per window for new jobs, but my true average is closer to £1.10 with some older accounts I have had over a decade still paying below £1 ?.

I take in around 50k a year in sales. Spend around 8k on expenses and my employees salery is around 17k. This leaves me about 25k before taxes. 21k after. I take around 13k as a wage for myself and the rest gets set aside for my own pension savings, replacing vans. Etc. 

Now do the maths on my customer numbers and I should be taking in much more. But I do run a bit behind, I loss about a week each year to bad weather, and right off anything between 500 to 1k a year in bad debt. 

Out of my 8k on expenses 5.5k is van related. I have two vans. 

Sounds greats. I only make about 3k after taxes from my employee. 25k sales, less 4k exp, 17k sal, then 1k taxes. Thats not much more than 10 percent of sales. 

It just wouldnt pay, to go above the vat threshold. But thats the least of it. I have had two people working for me for a time, and its allot of work. The more employees the more customers, the more quotes, calls, vans to deal with, the more you have to advertise. The more costs. More chance someone goes off on the sick.

The less and less time you have to clean windows. So you need to take a wage from what your staff are bringing in.

I read an article recent on the gov website that say they plan to hold the vat threshold to push small business into it. With just two employees, I would have to pay vat in the next 3-5 years. Given the rate of the national living wages is expected to rise. 

So for me, it pays to stay small. I will be 20% cheaper than the other guy. 

In my 12 years as a window cleaner, I have seen only two ways to really develop a window cleaning business and grow. Employ staff cash on hand, and pay a fixed percentage, "as self employed" and dont declare there cut as your sales, which I would not do, or focus on comercial, who can claim back vat. 

For me though, small is beautiful. I have two kids, my hours suit my life and I like the freedom that being a self employed window cleaner brings. I wouldnt thank you for a large comerical cleaning business that absorbed all my time.

Just some food for thought, for the new guys looking to grow.

Your business, your life. All I would say is for £25k a year you're doing a lot of work but if you're happy it has sod all to do with me. 

 

[Wind o kleen]

The employee comes out on top , something seriously not right 

 

[Dale Transparent]

Would it be worth speaking to your accountant and enquiring whether it's financially beneficial to have 2 companies? One as your own as a sole trader and the other a partnership with your employee with set percentage ownership?

 

[laddergarder]

Your business, your life. All I would say is for £25k a year you're doing a lot of work but if you're happy it has sod all to do with me. 

I work 4 days a week, which lets me work around the weather. Probably about 60-70 houses a week. Even though I currently manage 300 customers with my employee doing the rest, it tends to take me about 5 weeks to get round everyone, so I have more work than I need for the hours I do.

 

[laddergarder]

Refreshingly honest, well done mate.  If you're happy that's what counts. Are you trad or wfp? Just as a pointer and I by no means consider myself an expert but  £500 - £1,000 in bad debt every year seems very very high to me.  Maybe look at ways to reduce this?  I've been trading in my current business nearly 8 years (window cleaning for nearly 12 years) and I've only written off £50 in that entire time for bad debt.  My worst case to date has just come to an end and was only resolved by bailiffs. Are you following up on non payers?

£50 bad debt in 8 year wow. Customers are way more honest down your end. I have lost more than that on one job. 

I post a slip when I clean the windows, then if they are not in at night when I call back I post an invoice. I do two cleans without payment, but not a third. 

If its two cleans, invoiced twice, and still no payment, they go on hold and if I have to miss the third clean, I mail out an invoice on headed paper through the post. 

I am trad. I used wfp for a few year along side trad, but decided to stick to trad.

Would it be worth speaking to your accountant and enquiring whether it's financially beneficial to have 2 companies? One as your own as a sole trader and the other a partnership with your employee with set percentage ownership?

That would basically be just employing them buck shee. Plus not something that you can really scale. 

 

[Bart90]

£50 bad debt in 8 year wow. Customers are way more honest down your end. I have lost more than that on one job. 

I post a slip when I clean the windows, then if they are not in at night when I call back I post an invoice. I do two cleans without payment, but not a third. 

If its two cleans, invoiced twice, and still no payment, they go on hold and if I have to miss the third clean, I mail out an invoice on headed paper through the post. 

I am trad. I used wfp for a few year along side trad, but decided to stick to trad.

That would basically be just employing them buck shee. Plus not something that you can really scale. 

The £50 was for one job in 12 years.  I've had a good number try it on.  I'm just like a dog with a bone when it comes to payment and sometimes, in truth, chasing up is more hassle than it's worth but for me it's always been the principle ? Even so, it's got to be worth looking at ways to reduce that bad debt if you can, more money in your pocket that you've rightfully earned  ?

 

[laddergarder]

The £50 was for one job in 12 years.  I've had a good number try it on.  I'm just like a dog with a bone when it comes to payment and sometimes, in truth, chasing up is more hassle than it's worth but for me it's always been the principle ? Even so, it's got to be worth looking at ways to reduce that bad debt if you can, more money in your pocket that you've rightfully earned  ?

I am with you on the priciple of it, but for a £10 job, I could spend more than that chasing them further, and still not get paid.

I take cash, cheque, paypal and now DD as well, so if they are going to pay there is plenty of easy ways to pay me. Some just dodge you endlessly. 

In the end, if I have been at there property 4 times, twice while cleaning, twice in the evening for two cleans, posted two invoices by hand, then a reminder through the mail. And still dont get paid. They just dont recieve my service again, and I move on. 

Some times people move and they dont cancel, others just pass away, and you get a call a few months later from a relative(in this senario I tell them to ignore the bill, and I just close the account).

 

[dazmond]

i earn around £45k a year ON MY OWN working around 25 hours a week "on the glass"(no evening collecting now)46 weeks of the year and im left with around £30k-£32k a year profit after tax,insurances and all expenses which i can easily live on here because housing costs are so low......

your figures seem a bit low mate esp with having an employee as well?as long as your happy?i wouldnt be.....id be looking at raising some prices if i were you and looking at ways to speed up and become more efficient.......

as for write offs....mines usually around £50-£100 a year(usually because of death or moved without notifying me)this year its only £8!?

 

[dazmond]

i have one van,a grippa hot water system,xtreme poles,electric reel,etc and my expenses are around £7-£8k a year just for me!but im WFP and i like expensive window cleaning gear.....ive been window cleaning 26 years(nearly 10 years WFP).....

 

[Simply Business]

I wanted to put some honest figures out there and explain why myself and one employee, is as far as I can take my business. In as few words as possible. Warning, this will be long.

I have around 600 customers, with one person working for me. I charge around £1.50 per window for new jobs, but my true average is closer to £1.10 with some older accounts I have had over a decade still paying below £1 ?.

I take in around 50k a year in sales. Spend around 8k on expenses and my employees salery is around 17k. This leaves me about 25k before taxes. 21k after. I take around 13k as a wage for myself and the rest gets set aside for my own pension savings, replacing vans. Etc. 

Now do the maths on my customer numbers and I should be taking in much more. But I do run a bit behind, I loss about a week each year to bad weather, and right off anything between 500 to 1k a year in bad debt. 

Out of my 8k on expenses 5.5k is van related. I have two vans. 

Sounds greats. I only make about 3k after taxes from my employee. 25k sales, less 4k exp, 17k sal, then 1k taxes. Thats not much more than 10 percent of sales. 

It just wouldnt pay, to go above the vat threshold. But thats the least of it. I have had two people working for me for a time, and its allot of work. The more employees the more customers, the more quotes, calls, vans to deal with, the more you have to advertise. The more costs. More chance someone goes off on the sick.

The less and less time you have to clean windows. So you need to take a wage from what your staff are bringing in.

I read an article recent on the gov website that say they plan to hold the vat threshold to push small business into it. With just two employees, I would have to pay vat in the next 3-5 years. Given the rate of the national living wages is expected to rise. 

So for me, it pays to stay small. I will be 20% cheaper than the other guy. 

In my 12 years as a window cleaner, I have seen only two ways to really develop a window cleaning business and grow. Employ staff cash on hand, and pay a fixed percentage, "as self employed" and dont declare there cut as your sales, which I would not do, or focus on comercial, who can claim back vat. 

For me though, small is beautiful. I have two kids, my hours suit my life and I like the freedom that being a self employed window cleaner brings. I wouldnt thank you for a large comerical cleaning business that absorbed all my time.

Just some food for thought, for the new guys looking to grow.

So interesting to read @laddergarder. Thanks for sharing.

 

[Dave B]

Have you considered going ltd which is what I'm doing?

You save money by paying yourself a salary of around 8k and then your dividends which are every bit of profit you have if you want are nic free.

Only pay 19% corporation tax on that so save another 9% on nic contributions.

More hassle but more cash in your pocket.

Or franchise your worker so he pays you 25% and he has the turnover not you allowing you to have a couple guys on the road and stay under vat threshold and they pay for their own vans and equipment etc.

Just a few ideas.

 

[laddergarder]

Have you considered going ltd which is what I'm doing?

You save money by paying yourself a salary of around 8k and then your dividends which are every bit of profit you have if you want are nic free.

Only pay 19% corporation tax on that so save another 9% on nic contributions.

More hassle but more cash in your pocket.

Or franchise your worker so he pays you 25% and he has the turnover not you allowing you to have a couple guys on the road and stay under vat threshold and they pay for their own vans and equipment etc.

Just a few ideas.

The prob with not paying those nic contributions, is you do that for 20 years then find out you have not contributed enough to get a state pension. 

I could see problems with the franchising. Its just another way to get round paying your staff properly.

To be honest, I am happy were I am. I dont think earning 25k for 4 days a week is too bad at all. There is certainly plenty of job round my way that pay allot less.

The only proper solution is charge more. But I cant see me being able to double my pricing in my area and still stay busy, and busy enough at that to still need to employ.

Or work twice as fast. But I have been at it for 12 years, I am not slow. I also have no intention of trying to knock my pan in. 

I am trying to update my prices with old customers, so my average is closer to £1.50 per window. Which is a problem of my own doing for not increasing my prices enough with old customers over the years.

Earning discussions will always return of wide range on platforms like forums. I just really wanted to make the point that perhaps, others have pricing and takings similar to mine, who have just started and have filled there diary enought to need to employ. But it might be worth concidering how much they will really get out of taking on more.

I applogise I cant remember of says they earn 45k sales on there own. But I think even they will admit, it might not be best to try and double those takings, then have to pay 18k in vat. Higher accountancy fees, and all the hassell of dealing with an employee. 

For me I would rather push my pricing than grow.

 

[Dave B]

The prob with not paying those nic contributions, is you do that for 20 years then find out you have not contributed enough to get a state pension. 

I could see problems with the franchising. Its just another way to get round paying your staff properly.

To be honest, I am happy were I am. I dont think earning 25k for 4 days a week is too bad at all. There is certainly plenty of job round my way that pay allot less.

The only proper solution is charge more. But I cant see me being able to double my pricing in my area and still stay busy, and busy enough at that to still need to employ.

Or work twice as fast. But I have been at it for 12 years, I am not slow. I also have no intention of trying to knock my pan in. 

I am trying to update my prices with old customers, so my average is closer to £1.50 per window. Which is a problem of my own doing for not increasing my prices enough with old customers over the years.

Earning discussions will always return of wide range on platforms like forums. I just really wanted to make the point that perhaps, others have pricing and takings similar to mine, who have just started and have filled there diary enought to need to employ. But it might be worth concidering how much they will really get out of taking on more.

I applogise I cant remember of says they earn 45k sales on there own. But I think even they will admit, it might not be best to try and double those takings, then have to pay 18k in vat. Higher accountancy fees, and all the hassell of dealing with an employee. 

For me I would rather push my pricing than grow.

Fair enough but franchising means your "employee" (not an employee on paper) actually earns more as he will take 100% of the cash and give you only 20-25% which means you earn less but less turnover and they keep up to 80% of the money they make.

I have never paid towards a pension in my life it is my business which will pay me once I quit.

5 franchisees paying me 40 quid a day each means I can retire on 1k a week and just do admin from home and never have to go out on the tools.

Plus having a pressure washing van out also means I have a comfortable life.

Not much chance of having a state pension in 21 years when I'm 65 anyway lol.

All depends what you want but I have no faith in government to pay for my lifestyle when I retire.

The point of franchising is if a worker earns 50k a year you would be vat registered. 

If you have him franchised your turnover only increases by the amount of royalties you charge not the turnover of "their" business 

Still can make you good money if done right.

 

[Cleanco]

Fair enough but franchising means your "employee" (not an employee on paper) actually earns more as he will take 100% of the cash and give you only 20-25% which means you earn less but less turnover and they keep up to 80% of the money they make.

I have never paid towards a pension in my life it is my business which will pay me once I quit.

5 franchisees paying me 40 quid a day each means I can retire on 1k a week and just do admin from home and never have to go out on the tools.

Plus having a pressure washing van out also means I have a comfortable life.

Not much chance of having a state pension in 21 years when I'm 65 anyway lol.

All depends what you want but I have no faith in government to pay for my lifestyle when I retire.

Too right, you can tell by how much the government are trying to push workplace pensions and keep knocking the retiring age back that they are trying to abolish the state pension.