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Since everybody else is pointing out how poor his employee compliance is and that he's picked a freaking hard row to hoe, I'll praise the guy. Awesome job! This

Since everybody else is pointing out how poor his employee compliance is and that he's picked a freaking hard row to hoe, I'll praise the guy. Awesome job! This is the internet equivalent of going door-to-door. In fact, I bet you could combine this with going door to door and see sales really take off :) The scaling thing Edw brings up doesn't concern me right now: you are in the throes of kicking ass. Later on reality will sink in. But he's right -- you have some major changes to make if you really want to go long-term with this. Patio has a more legal concern: that your cleaners are really workers. I'm not so sure. I'd see a lawyer about this pronto. If these folks were already doing some cleaning before you met them, and if you make it clear that there is no office, there is no work hours, they are free to take or not take work, and that their only obligation to you is completing each job they sign up for? I think you might be fine. It's certainly a lot less control that software contractors have over them, and they're contractors. Instead of growing, I'd concentrate on making this thing hands-off. Hire a temp to do the office work, etc. Even if it eats into most of your income, once you are freed up then you'll be in a position to really expand. This "make the business a machine" is your next step. At least according to everybody I read. I liked the post. We need reminding that a little bit of hussle and not over-thinking things can take you a long ways.

tptacek 15y ago
He has a "detaileddddddd" checklist of how he wants the work done and a training program. His lawyer is going to tell him that they're employees. What's worse is, the better he does, the more clear-cut this issue gets. His key business metric is employee turnover, and anything he does to improve this increases the likelihood that his employees will be relying on him for most of their wages. This is a "too good to be true" scenario. He's defined a fixed-price service with rigorous standards to be delivered across a major metro area with 8 known-good workers and is making $1000/month on it. To be compliant, some of that has to give: his business will have to look more like a placement or dispatch service, or he'll have to make way less money. The IRS reclassification thing will be painful.
- DanielBMarkham 15y ago
  Thanks. I only read the initial post. Yeah, you can't get into how to do the work. Also using anything called employee turnover is a dead stop. But I still think it's salvageable, simply because there are so many independent cleaners out there already. This industry is heavily independent. I think he really needs to look at his structure, pronto. I'll play devil's advocate just a bit more for the crowd. Many times startups skirt all sorts of rules and regulations when getting off the ground. I'm okay with that -- startups are always a bit subversive, and if you listen to your accountant and lawyer you'd never take any risk at all. But you can't go on like that for very long. EDIT: Here's a possible setup: place the jobs on cards and put on the wall. Have the cleaners bid for the jobs. The checklist could just be the terms of contract completion, and you'd have to make sure the checklist was not a job description. Whether or not the contractors conspire to set the price or anything is none of your concern. You're simply a clearing house for very small cleaning contracts. I think it's very doable. His business and income is really in chasing down people who need cleaning and people who can provide it. That doesn't have to have anything to do with employees. But it won't work as you've described it. I was just blogging about this. Many times you find value and struggle with the model. http://news.ycombinator.com/item?id=3847651 http://news.ycombinator.com/item?id=3847651
  - tptacek 15y ago
    This is not the good kind of subversive. This is the kind of subversive that screws people who are making close to subsistence wages over on taxes. He spends "an hour a day" on Maids In Black now and based on his pricing and the prevailing take-home for housekeepers is taking more than half the gross from the business. That doesn't seem particularly laudable (but maybe my math is fucked up). I don't think it's going to be easy to provide the service he wants to provide (flat-rate book-online competitive-quality housecleaning on demand) profitably under a 1099 structure.
    - DanielBMarkham 15y ago
      I'm unable to address this, as I'm not sure what you mean. I was simply saying that from his vantage point, hooking up customers and vendors who were already in the market can be a valid business model. I believe you are talking about bringing new people into the market as vendors and then treating them poorly. Hopefully we can agree that folks that are already doing cleaning can continue doing it just using this guy's services to find customers. If not,if the point is that all cleaners should be w-2 employees, then yes, no matter what he does it will not satisfy somebody with that view. I do not believe all cleaners should be employees. It's perfectly fine with me if you feel otherwise, but I don't think that's the way the IRS sees things. (thankfully)

tptacek 15y ago

He has a "detaileddddddd" checklist of how he wants the work done and a training program. His lawyer is going to tell him that they're employees. What's worse is, the better he does, the more clear-cut this issue gets. His key business metric is employee turnover, and anything he does to improve this increases the likelihood that his employees will be relying on him for most of their wages. This is a "too good to be true" scenario. He's defined a fixed-price service with rigorous standards to be delivered across a major metro area with 8 known-good workers and is making $1000/month on it. To be compliant, some of that has to give: his business will have to look more like a placement or dispatch service, or he'll have to make way less money. The IRS reclassification thing will be painful.

DanielBMarkham 15y ago
Thanks. I only read the initial post. Yeah, you can't get into how to do the work. Also using anything called employee turnover is a dead stop. But I still think it's salvageable, simply because there are so many independent cleaners out there already. This industry is heavily independent. I think he really needs to look at his structure, pronto. I'll play devil's advocate just a bit more for the crowd. Many times startups skirt all sorts of rules and regulations when getting off the ground. I'm okay with that -- startups are always a bit subversive, and if you listen to your accountant and lawyer you'd never take any risk at all. But you can't go on like that for very long. EDIT: Here's a possible setup: place the jobs on cards and put on the wall. Have the cleaners bid for the jobs. The checklist could just be the terms of contract completion, and you'd have to make sure the checklist was not a job description. Whether or not the contractors conspire to set the price or anything is none of your concern. You're simply a clearing house for very small cleaning contracts. I think it's very doable. His business and income is really in chasing down people who need cleaning and people who can provide it. That doesn't have to have anything to do with employees. But it won't work as you've described it. I was just blogging about this. Many times you find value and struggle with the model. http://news.ycombinator.com/item?id=3847651 http://news.ycombinator.com/item?id=3847651
- tptacek 15y ago
  This is not the good kind of subversive. This is the kind of subversive that screws people who are making close to subsistence wages over on taxes. He spends "an hour a day" on Maids In Black now and based on his pricing and the prevailing take-home for housekeepers is taking more than half the gross from the business. That doesn't seem particularly laudable (but maybe my math is fucked up). I don't think it's going to be easy to provide the service he wants to provide (flat-rate book-online competitive-quality housecleaning on demand) profitably under a 1099 structure.
  - DanielBMarkham 15y ago
    I'm unable to address this, as I'm not sure what you mean. I was simply saying that from his vantage point, hooking up customers and vendors who were already in the market can be a valid business model. I believe you are talking about bringing new people into the market as vendors and then treating them poorly. Hopefully we can agree that folks that are already doing cleaning can continue doing it just using this guy's services to find customers. If not,if the point is that all cleaners should be w-2 employees, then yes, no matter what he does it will not satisfy somebody with that view. I do not believe all cleaners should be employees. It's perfectly fine with me if you feel otherwise, but I don't think that's the way the IRS sees things. (thankfully)