Hey guys,
A good friend of mine has a window cleaning/pressure cleaning business. He has worked on it since 2003, has about 400-450 customers. Last summer, he got into pressure cleaning…and now he doesn’t care for window cleaning (I don’t blame him, I am now finding out how much you can make with a good pressure cleaning setup). He has come to me a few times, offered me a job to go with him full-time I am weary with going to work full-time with a friend (Business/Personal)-- so I told him no…being friends and working together 5-6 days a week together may be a problem–(I currently work for my boss of 11 years, I am just looking to fill the void on my off days and Summer slow season).-- I work by myself 90 percent of the time, even with my boss (I call him the night before and get all the work for the next day, all the customers are familiar with me). I enjoy working for my boss, the way I look at it – He never has to worry about me showing up and doing a good job, and I never have to worry about collecting my paycheck—and I am entertaining the option of buying a percentage of his business when he decides to retire-- But that is a bridge I will cross when/if that happens.
I recently got myself licensed in 3 counties,a business checking account and am looking at insurance for myself just to get started making some money on the side-- My friend has come to me asking if I would be interested in sub-contracting these jobs for him. I have never done any kind of work other than hourly that shows up on a W2 for the last 11 years-- how exactly does this work? Somewhere between a 60/40 split I would feel comfortable with, knowing his prices he would make 40 percent “Not even leaving the house”. But here’s my question-- If I am my own business-- how would I subcontractor work for his? I have all of my own tools, my own truck, etc-- would the income I receive be able to use for MY business returns?
The reason I am asking is I am trying to get my own home. I am paying 1300 a month in rent, and when I applied for a mortgage I was told with my W2 income. (28k a year)…not much wiggle room. I understand I need TWO YEARS of returns if I am getting 1099’s or self employment income…I would like to pick up my own jobs on the side, and subcontract work from my friend’s business as well. I’m not talking going everyday, maybe 1-2 days a week for him to supplement my time I am losing from my current job in the summer (My friend has bi-monthly accounts year round to whereas I deal with snowbirds 6 months out of the year). I just want to be able to claim this money, and wondered if subcontracting will add income to MY business?
This is all new to me, all I have ever done is work hourly. I afford enough for a 1 or 2 bedroom condo currently, I may buy one when my lease is up in April of 2018-- and start showing more income returns so by 2020/2021 I am ready to buy my dream house-- all I need is the VERIFIABLE INCOME! The future is bright for me, I am only 31 years old and have plenty of knowledge gathered from these 11 years full-time. Paying 1300 a month on someone else’s mortgage is a tragedy-- I could buy a condo with my current income and just invest in that property to get me by until a few years down the road where I have more on the books VERIFIABLE income. My lease is up in 7 months so I start thinking ahead.
Any help or suggestions would be appreciated, the work that can go my way through my friend’s business is plenty-- he is also having a hard time finding employees who want to work and not just do “the boss’s work” (Patios, non-ladder work, etc)-- I’ve worked with him over the years but it has been under the table (Or should I say, I never worked for him, Uncle Sam). The opportunity is there, but is this a viable option or would I just be receiving a 1099 from HIS company?
Edit: I know this is something I should ask a CPA, but since I see so many of you guys on here-- someone has to have gone this route before! I make enough to live off of with my current job, all of this would be going straight into my business checking and never touched (except for taxes)—to further my purchasing power down the road. For some of you who are reading this and wonder, my boss is the one telling me to go do something on the side-- he fully supports it as long as I don’t interfere with his work (I signed a non-compete over 11 years ago-- would never think of it). My friend is dying to get some time off, he has too much work coming in and not enough men to get it done-- I feel this could be a WIN/WIN for everyone involved and HAPPY customers all around.
Thanks,
SeaBreeze