Hi all,
I'm currently looking around for a cleaning franchise, and wondering if anyone on this forum has dealt/owned one.
2 companies I've looked at 1.AMC cleaning 2. Berkelys
I want to start at bottom which cost around 20k
This provides you with around 50-60k gross p/a
You charge the organisation 30p/h which works out around 40 hours of work per week
My partner wants to do the work during the night
I will pay her approx 500 cash in hand which leaves maybe 200 per week?after expenses ect
It seems like an OK way to make some passive income…..What does anyone on this site think??
By the way I already have 2 investment propertys and reached my borrowing cap, so I am looking for ways for some passive income…
Thanks guys.Be very careful about paying anyone who is an employee cash-in-hand.
Accidents can happen, and if she/he is not on the books and gets hurt, there is no coverage, and you could be found out for not providing the correct work conditions, and either or both of you could get into serious trouble with the A.T.O.
Workcare premiums are tax deductible, and it may be better for your partner to draw a minimum wage to stay under the tax threshold, and then maybe share in the company dividends at the end of the year.
You need to get onto an accountant and set this is up properly and legally and safely.
It is too easy to make money legally than to have to go down that path.cheers for the reply Marc,
ok besides the cash in hand issue, have you hand any dealings/experience/insight into cleaning contracts/franchises. Do you think an outlay of 20k for the return (50-60k gross p/a) is an ok investment?
Once you sign up you can obtain additional contracts also.
Any help would be greatly appreciated.Why not start your own business? We are always looking for good cleaners and I'm sure other real estate agencies are too.
Hi, you’re doing the right thing by asking questions. You can never ask too many in my opinion. Try and find past or existing franchisees to hear what they have to say. I know a couple of people who have purchased cleaning franchises and the common complaint I hear is that the franchisee ends up having to find their own jobs (contracts) then ends up having to pay a percentage to the franchise people. It’s ok if theyare out there winning tenders and so on, but if they are not you may as well start from scratch yourself??? If you’re looking at an existing business check out where things are at with existing contracts. Know some one one who went into a cleaning business only to find that a high percentage of the business income was lost shortly after they took over.
Not sure about the wisdom of the cash thing either. One of the problems I see with it is that you will end paying heaps more tax as the income of the business will not have been offset by your biggest expense??
All the best
HallgThanks Xenia and hallg for your responses…
Xenia if you need someone keen and reliable you got the right team
Still no-one has answered the question for an outlay of around 20k for aprrox 60k gross is this a good return????
Could someone be so kind to answer ?Don't know if there is one simple answer to your question. As you would be aware the gross income figure doesn't tell you what your actual "passive" nett income is. If one assumes that expenses end up being about $40,000 that could leave you with some where between $10,000 to $20,000 nett. If that turns out to be so, in theory you could make a 50% plus return on your original investment and I think most of us would take that. However that assumes a number of things: 1) Will the company deliver the income (contracts) they promise? 2) Can you deliver the actual work for which your business will be paid, at a cost which is well below the gross income figure? 3) Even if you do a good job at the local level, will the franchise stand the test of time and be there when, or if, you wish to sell? If any of these questions turn out to be negative, your original investment could evaporate. On the other hand if you can grow the business, into good earner, who knows?? Sorry I'm not much help. One thing I do know, and I think is worth mentioning, is the cost to employ labour for cleaning. I currently manage 5 cleaners (among other things) and according to my figures the real cost is about $23 per hour. If for some reason your partner is unable to perform the work, you may be in position of having to employ some one. $23 per hour plus other costs may eat well into that "passive" income??
All the best
Hallg
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