Starting little detailing business with local shop

I read that, I'm just saying, what he SAYS, and what's on PAPER is different especially in court. I don't know enough about the insurances that are out there for me to know the stipulations of it and all that...



I'm assuming there's going to be a written contract of some sort between you and the business, I'm just saying to make sure both sides read over the contract carefully and make sure it 100% spells out all the things you two have agreed upon and leave no assumptions out, because just because you and the owner understand what was meant, doesn't mean a judge will in the unfortunate event things go sour. As much as I'd love to trust the next guy, I guess the many things that I've experience has made me a bit more cautious
 
hehe good to know--that was I guess my biggest thing; I wasn't sure if the insurance actually covered him too...I wouldn't think it would make much business sense for the insurance company to allow it....but if it did(again I don't know the insurance end) i figured the shop would have a fairly high level of coverage? (lol though as I typed that I feel a little silly for making that assumption)
 
Alexshimshimhae said:
Hope I don't deter you, I've been told be numerous people, that trying/doing things when you're younger is better--because less is at stake. Ultimately, a failed business is more important to someone who's say 50 than it is to someone say, 19 because the 19 yo will make back the losses many times over; but it's still best to avoid the mines whenever possible =]

This is my take on it. toyotamachine2009: What liabilities do you personally have right now ? Do you own a home or anything ? Purchase financed vehicle ? Live at home ? Depending how many bills you have, you really might not have much to lose in trying this out. From quickly glancing over the information in this thread, it doesn't sound like THAT bad of a deal. Personally, I'd probably try it out for a few months and see how it goes.



As for liability, it makes no difference how it's setup. If the tinting / audio shop accepts a vehicle in, they're liable for what happens to that vehicle, doesn't matter who touches it. It would be like saying you took your vehicle to the local GM dealership for a radiator replacement, and GM farmed the work out to a small local radiator shop. If the radiator still leaks when you get it back, the GM dealer can't say "oh well go deal with xyz radiators, we actually just had them do the work". The same applies in your situation, the tinting / audio shop has accepted responsibility for the vehicle as long as it is in their care, unless the customer specifically signs a completely different service agreement with you. In this scenario, yes, the shop is taking all liability for you screwing up, so to be honest, a 50/50 split doesn't sound too bad to me.
 
I wouldn't do it for less than 75/25 if I provide everything. At 50/50 or 55/45 they are not giving you near enough profit-motive. That's not a good offer on his behalf because it will end up dying.
 
Alright I'll give it a shot.. I don't have many bills really. Still live at home but saving up to move out. My girlfriend lives with me at home too and she is working manager at gyro time.. So I been mostly using her pay checks that paid for my polisher my pads all my products everything lol. I got things easy as of now but it can get ugly real fast for example my parents say you need to get out.. Or my gf and I break up then I wont have her source of income anymore.
 
lol all I'm saying is take the time to really weigh out your pros and cons. At the end of the day, getting input and feedback is all well and good because it certainly helps, but you still need to do your due diligence or else all the advise in the world isn't going to help you
 
Jean-Claude said:
I wouldn't do it for less than 75/25 if I provide everything. At 50/50 or 55/45 they are not giving you near enough profit-motive. That's not a good offer on his behalf because it will end up dying.



well half people say 50/50 is fair because A. They are giving me location. B. I am not paying rent or lease or anything. C. They are covering insurance. D. They cover credit card fees.



And other half say 50/50 isnt. I tried to ask for 60/40 but he said well I am covering all those costs all you need to do is pay for product other than that, thats your only expense. Also they are doing the marketing so they are drawing in customers to me they will put detailing on their site. Offer specials that include tint and detailing.. They want to find a crappy hood all scratched up and me polish half of it and hang it up in the lobby so people can see a 50/50 of what it looks like same with a car mat take a really dirty one and clean half of it. They are all for it and want this to succeed.
 
lol I say you ask the owner if you can take a dish-washing sponge to his hood to purposely put in swirls (mind you, you don't want to severely damage his car) :)
 
do NOT take his word for it that his 'insurance' will cover you.



Ask to see the liability declaration, and call the insurance company yourself.



Protect yourself with some healthy suspicion. do you know he even has insurance? What proof has he offered you? Ask him what company he has his general liability policy thru, and if he takes more than 10 seconds to answer, don't take his word for it until you -see- documentation.
 
How can he give you a 1099 and you be covered by his insurance? 1099's are given to sub-contractors. Sub-contractors are going to supply their own insurance. If there's a serious mistake and someone goes head hunting, they will come after you and he may claim that he has no real ties to you.



If he covers you, demand a copy of his coverage to include you/your company as a covered party. If he doesn't give this to you, walk, he's full of it.



I bet he's going to view all of the customers as his as well. That means all of your hard work stays with him if you leave to have your own shop.



I believe your effort and money is better spent having a mobile service. Low overhead and you keep all the profits.



The biggest part I don't like is how he is so slow but wants to start this new venture and split 50/50. It sounds like he's grasping to draw new customers but doesn't want to hustle or spend the money get them himself. That's not the attitude I want someone I am doing business with to have. It sounds like this is an afterthought and you will get kicked to the curb once he gets what he wants. If he called you once in a while and offered you 50% to do a job, that makes sense. 50% for you to draw new customers to him is for the birds. Getting new customers is one of the most time consuming and expensive parts of business.



Sometimes ya gotta just walk.
 
toymachine2009: Understand, that even IF this shop's insurance didn't cover you in case of an accident or mishap, it's STILL not your problem directly. A client CANNOT hold you responsible unless you signed an agreement with them that was separate from this shop's. I explained this earlier. It seems that most folks here are hung up on this issue.



No rent costs, no insurance fees (which you will need if you're mobile, BTW, and at your age, it'll be pricey), no marketing costs, basically you're an employee yet have the potential to make more than just a worker. Maybe some folks here have had bad experiences themselves, but if I was 19 again and had this opportunity, I'd jump on it. If business picks up for the shop in general, and detailing becomes a bigger part of the shop, then it's possible that you could even buy into the company, become a partner and partially own it. Or the whole thing could flop in the next 3 months and everyone's out of work at the shop. Sure it's a gamble, but IMO, the potential benefits outweigh the risks, especially at your age right now. The biggest, most important thing is that you trust these guys who own this shop. That's the only thing that would stop me from trying this out.
 
WAS said:
toymachine2009: Understand, that even IF this shop's insurance didn't cover you in case of an accident or mishap, it's STILL not your problem directly. A client CANNOT hold you responsible unless you signed an agreement with them that was separate from this shop's. I explained this earlier. It seems that most folks here are hung up on this issue.



No rent costs, no insurance fees (which you will need if you're mobile, BTW, and at your age, it'll be pricey), no marketing costs, basically you're an employee yet have the potential to make more than just a worker. Maybe some folks here have had bad experiences themselves, but if I was 19 again and had this opportunity, I'd jump on it. If business picks up for the shop in general, and detailing becomes a bigger part of the shop, then it's possible that you could even buy into the company, become a partner and partially own it. Or the whole thing could flop in the next 3 months and everyone's out of work at the shop. Sure it's a gamble, but IMO, the potential benefits outweigh the risks, especially at your age right now. The biggest, most important thing is that you trust these guys who own this shop. That's the only thing that would stop me from trying this out.



in california, being a 1099 will not automatically cover you by the businesses insurance. you have to be named an additional insured. we do it all the time with my other business. it is way cheaper and you usually only pay per time you work. but we carry a $2 million dollar general policy and a per incident that is higher than what is required. dont get suckered, get some legal help or at least call a local insurance agent and ask. not every state or city is the same and you could be on the hook for a lot of money.
 
This is my biggest concern thus far. Since I am 1099'd That means instead of my employer pay 7.5% of Social Security and I pay 7.5% of Social Security I pay the full 15% myself! So since I am taxed on everything I make that means out of every $100 I make already subtract $15 dollars... so thats now only $85... Now subtract 15% for federal taxes so now out of that $100 dollars I came home with $70 but WAIT then say I gotta use $5-10 dollars in product Then I come home with $60 dollars out of every $100 I make...



Opinions on this...



Well Im already splitting with the company 50% but now I gotta split my 50% I make 30% with the government. so very little profit is to be made if any! Unless I was making 500+ a week even then I would only get $250 and then take out 15% and another 15%... This sounds like nothing for me but there business making all sorts of extra cash on the side.
 
business expenses act as deductions against income, thereby lowering your taxable income--you do need to understand that certain deductions are subject to thresholds and limitations.
 
advs1 said:
in california, being a 1099 will not automatically cover you by the businesses insurance. you have to be named an additional insured. we do it all the time with my other business. it is way cheaper and you usually only pay per time you work. but we carry a $2 million dollar general policy and a per incident that is higher than what is required. dont get suckered, get some legal help or at least call a local insurance agent and ask. not every state or city is the same and you could be on the hook for a lot of money.

My point is, who cares if he's covered by the business insurance or not ? It's not his problem. If an incident happens with a vehicle that is in this shop's care, then THEY are responsible for it. Whether they screwed up and their contractor isn't covered by their insurance policy is THEIR problem, not the OP's. Unless of course he's signing different agreements with clients, that's a different story.



toymachine2009: Maybe it makes sense to set yourself up as a company and simply invoice out to the tint / audio shop ? You might want to talk to an accountant on how best this arrangement would work for you income tax-wise.
 
This is what I have to sign... If you can just skim it (quick glance.. see if anything is fishy..) let me know





INDEPENDENT CONTRACTORS AGREEMENT


This “Agreement” is made as of November 01, 2010 (Date, Year) by and between Cleveland Rox, INC

DBA Tint N Tunes (Furthermore known as the Company), and ___________________________________

(the Independent Contractor) a Corporation / sole proprietorship _________________________SSN /

EIN with its principal place of business at _________________________________________________

_____________________________________________________ "Independent Contractor's Address".

In consideration of the mutual premises herein contained, Company and Independent Contractor hereby agree as follows:

SECTION 1: ENGAGEMENT

The Company hereby engages the Independent Contractor to render the services, of automotive detailing.

SECTION 2: COMPENSATION

A. In full consideration for the performance of the Services hereunder, and for any rights granted or relinquished by the Independent Contractor under this Agreement, the Company shall pay the Independent Contractor as follows:

1. Percentage of 55% (fifty – five percent) of the retail sales amount of each detail job completed

B. Payments shall be preceded by an invoice from the Independent Contractor (to be submitted by Friday of each week), which Company shall then no later than Monday of the following week. Invoice should include date f completed job, vehicle type and vehicle plate number.



C. The Company will NOT reimburse the Independent Contractor for any expenses incurred in the performance of the Services.

D. Independent Contractor acknowledges and agrees that, except as provided in this Section 2, it shall not be entitled to, and the Company shall not be obligated to pay, any monies or other compensation for the Services provided and rights granted under this Agreement.

E. In the event that the Independent Contractor creates damage to a vehicle or equipment or the shop itself, the Contractor will be responsible to pay for all damages within 72 hours of the claim / damage occurring.





SECTION 3: ASSURANCE OF SERVICES


A. Independent Contractor will assure that they will be available to perform, and will perform the services hereunder until they are completed. If unable to perform duties for a time period a 24 hour notice is required.

In the event that they contractor is unable to perform duties, a replacement may be sent to complete the duties of which compensation will be arranged between contractor and the replacement. Replacement of the individual still holds the Independent Contractor liable for damages.

SECTION 4: INDEPENDENT CONTRACTOR RELATIONSHIP

A. The Independent Contractor agrees to perform the Services hereunder solely as an Independent Contractor. The Contractor will be responsible to obtain all Federal, State and local licenses as well as insurances that pertain to their services and craft. The parties to this Agreement recognize that this Agreement does not create any actual or apparent agency, partnership, franchise, or relationship of employer and employee between the parties. The Independent Contractor is not authorized to enter into or commit the Company to any agreements, and the Independent Contractor shall not represent itself as the agent or legal representative of the Company.

B. Further, the Independent Contractor shall not be entitled to participate in any of the Company's benefits, including without limitation any health or retirement plans. The Independent Contractor shall not be entitled to any remuneration, benefits, or expenses other than as specifically provided for in this Agreement.

C. The Company shall not be liable for taxes, Worker's Compensation, unemployment insurance, employers' liability, employer's FICA, social security, withholding tax, or other taxes or withholding for or on behalf of the Independent Contractor or any other person consulted or employed by the Independent Contractor in performing Services under this Agreement. All such costs shall be Independent Contractor's responsibility.

SECTION 5: PROPRIETARY RIGHTS

A. The Independent Contractor acknowledges that it has no right to or interest in its work or product resulting from the Services performed hereunder, or any of the documents, reports or other materials created by the Independent Contractor in connection with such Services, nor any right to or interest in any copyright therein. The Independent Contractor acknowledges that the Services and the products thereof (hereinafter referred to as the "Materials") have been specially commissioned or ordered by the Company as "works made-for-hire" as that term is used in the Copyright Law of the United States, and that the Company is therefore to be deemed the author of and is the owner of all copyrights in and to such Materials.



B. In the event that such Materials, or any portion thereof, are for any reason deemed not to have been works made-for-hire, the Independent Contractor hereby assigns to the Company any and all right, title, and interest Independent Contractor may have in and to such Materials, including all copyrights, all publishing rights, and all rights to use, reproduce, and otherwise exploit the Materials in any and all formats or media and all channels, whether now known of hereafter created. The Independent Contractor agrees to execute such instruments as the Company may from time to time deem necessary or desirable to evidence, establish, maintain, and protect the Company's ownership of such Materials, and all other rights, title, and interest therein.

C. Notwithstanding the foregoing, the Company acknowledges that the Independent Contractor's ability to carry out the work required is heavily dependent upon the Independent Contractor's past experience in the industry and in providing similar services to others and they expect to continue such work in the future. Subject to the confidentiality provisions of Section 6 below, generic information communicated to the Company in the course of this project either orally, in the form of presentations, or in documents that report such general industry knowledge is not subject to the terms of A & B above.

SECTION 6: CONFIDENTIALITY

A. In connection with the performance of Services hereunder, the Independent Contractor may be exposed to confidential and proprietary information of the Company, whether or not so identified (including without limitation this Agreement). All such confidential and proprietary information shall be subject to the terms and conditions of the Non-Disclosure Agreement, as annexed in Exhibit B.



B. The Independent Contractor shall not, without the prior written consent of the Company, use the Company's name in any advertising or promotional literature or publish any articles relating to the Company, this Agreement, or the Services and shall not otherwise refer to the retention of Independent Contractor to render consulting services hereunder.

SECTION 7: WARRANTIES AND INDEMNIFICATION

A. The Independent Contractor represents and warrants that:

i) The Services shall be performed in accordance with, and shall not violate, applicable laws, rules or regulations, and standards prevailing in the industry and the Independent Contractor shall obtain all permits or permissions required to comply with such laws, rules or regulations;

ii) The Materials shall be original, clear, and presentable in accordance with generally applicable standards in the industry;



iii) The Materials will not contain libelous, injurious, or unlawful material and will not violate or in any way infringe upon the personal or proprietary rights of third parties, including property, contractual, employment, trade secrets, proprietary information, and non-disclosure rights, or any trademark, copyright, or patent, nor will they contain any format, instruction, or information that is inaccurate or injurious to any person, computer system, or machine;

vi) The Independent Contractor has full power and authority to enter into and perform its obligations under this Agreement; this Agreement is a legal, valid, and binding obligation of Independent Contractor, enforceable against it in accordance with its terms (except as may be limited by bankruptcy, insolvency, moratorium, or similar laws affecting creditors' rights generally and equitable remedies); entering into this Agreement will not violate the Charter or By-laws of Independent Contractor or any material contract to which it is a party;

v) The Independent Contractor will perform the Services in accordance with the specifications established by the Company.

B. The Company represents and warrants that it has full power and authority to enter into and perform its obligations under this Agreement; this Agreement is a legal, valid, and binding obligation of the Company, enforceable against it in accordance with its terms (except as may be limited by bankruptcy, insolvency, moratorium, or similar laws affecting creditors' rights generally and equitable remedies); entering into this Agreement will not violate the Charter or By-laws of the Company or any material contract to which it is a party.

C. The Independent Contractor shall comply with all of the Company's standards and procedures when working on-site at the Company, including without limitation, standards relating to security.

D. The Company shall not be liable for injury or death occurring to the Independent Contractor or any of its employees or other assistants in the course of performing this Agreement.

E. The Independent Contractor hereby indemnifies and holds harmless the Company, its subsidiaries, and affiliates, and their officers and employees, from any damages, claims, liabilities, and costs, including reasonable attorney's fees, or losses of any kind or nature whatsoever ("Loss") which may in any way arise from the Services performed by the Independent Contractor hereunder, the work of employees of the Independent Contractor while performing the Services of the Independent Contractor hereunder, or any breach or alleged breach by Independent Contractor of this Agreement, including the warranties set forth herein. The Company shall retain control over the defense of, and any resolution or settlement relating to, such Loss. The Independent Contractor will cooperate with the Company and provide reasonable assistance in defending any such claim.

SECTION 8: TERM AND TERMINATION

A. The term of this Agreement shall commence on the date hereof and shall continue until the Independent Contractor satisfactorily completes performance of the Services (hereinafter the "Term").



B. This Agreement may be terminated:

i) by either party upon fifteen (15) days prior written notice if the other party breaches or is in default of any obligation hereunder and such default has not been cured within such fifteen (15) day period

ii) by the Company at any time during the Term for any reason (or no reason

C. Neither party shall be liable or deemed to be in default for any delay or failure in performance under this Agreement or interruption of service resulting, directly or indirectly, from acts of God, civil or military authority, acts of the public enemy, war, riots, civil disturbances, insurrections, accidents, fire, explosions, earthquakes, floods, the elements, strikes, labor disputes, shortages of suitable parts, materials, labor or transportation or any causes beyond the control of such party.



D. Upon termination by either party, Independent Consultant shall provide to Company any and all copies, in whole or in part, of the Materials (as they then exist) and any and all tangible materials the Company provided to the Independent Consultant in connection with this Agreement.

SECTION 9: DAMAGES AND REMEDIES

A. In the event of termination of this Agreement by the Company pursuant to Section 8.B (i), the Company shall have all remedies available to it at law and in equity. Any and all Materials prepared for and/or delivered to the Company prior to termination shall remain the property of the Company.

B. In the event of termination pursuant to Section 8.B (ii), and provided that Independent Contractor is not in material breach of its obligations hereunder, the Independent Contractor shall be entitled to keep all monies already paid pursuant to Section 2 and the Company's sole obligation shall be to pay Independent Contractor the amount due for Services already acceptably performed and Materials already accepted, pro rata. In no event shall the Company be liable for any lost profits or consequential, incidental or special damages.

C. The Independent Contractor waives any and all right to injunctive relief in the event of any dispute with the Company, and the Independent Contractor's sole remedy in such a dispute shall be at law.

Section 10: GENERAL TERMS

A. This Agreement shall be governed and construed in accordance with the laws of the State of Nevada applicable to contracts made and fully performed therein, and the state and federal courts located in Nevada shall have exclusive jurisdiction of all suits and proceedings arising out of or in connection with this agreement. Both parties hereby submit to the jurisdiction of said courts for purposes of any such suit or proceeding, and waive any claim that any such forum is an inconvenient forum.



B. Any notices to either party under this Agreement shall be in writing and delivered by hand or sent by nationally recognized messenger service, or by registered or certified mail, return receipt requested, to the address set forth above or to such other address as that party may hereafter designate by notice. Notice shall be effective when received, which shall be no greater than one (1) business day after being sent by a nationally recognized messenger service or three days after being sent by mail.

C. The Company may freely assign this Agreement, in whole or in part. The Independent Contractor may not, without the written consent of the Company, assign, subcontract, or delegate its obligations under this Agreement, except that the Independent Contractor may transfer the right only to receive any amounts which may be payable to it for performance under this Agreement, and then only after receipt by the Company of written notice of such assignment or transfer. This Agreement shall be binding upon and inure to the benefit of the parties' successors and assigns.

D. The waiver by either party of a breach or violation of any provision of this Agreement shall not constitute a waiver of any subsequent or other breach or violation.

E. Following the expiration or termination of this Agreement, whether by its terms, operation of law, or otherwise, the terms and conditions set forth, as well as any term, provision, or condition required for the interpretation of this Agreement or necessary for the full observation and performance by each party hereto of all rights and obligations arising prior to the date of termination, shall survive such expiration or termination.

F. This Agreement represents the entire Agreement between the parties. The Agreement may not be amended, changed, or supplemented in any way except by written Agreement signed by both parties.

EXHIBIT A

The following describes the Services to be performed, any Materials that are to be delivered, and the schedule for delivery (if applicable): ______________________________________________________

____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________Independent Contractor will be supplied an area to perform the services of automotive detailing. The shop will be available 7 days a week upon request and notice for the purposes of providing these services.

By: C.W. Cleveland By: _

Signature: _____________________ Signature:

Date: _____________________ Date:

Title: President Cleveland Rox, INC Title:
 
(not a lawyer)



suggestions:



Strike sec 9-C



Amend sec 5 to allow you to include rights for yourself to use things like photos of work performed directly by you



....



man, they want you to work in their shop, take %45 of the profit, but won't cover workers' comp, or any insurances for that matter?



I guess you have to decide if their 'marketing' tactics and business levels are worth that %45.



I also agree with whoever said to have a trial period of time, or forced review/renewal of the contract instead of leaving it as an indefinite comitttment.
 
madmallard said:
(not a lawyer)



suggestions:



Strike sec 9-C



Amend sec 5 to allow you to include rights for yourself to use things like photos of work performed directly by you



....



man, they want you to work in their shop, take %45 of the profit, but won't cover workers' comp, or any insurances for that matter?



I guess you have to decide if their 'marketing' tactics and business levels are worth that %45.



I also agree with whoever said to have a trial period of time, or forced review/renewal of the contract instead of leaving it as an indefinite comitttment.



Well we edited the doc and split it 50/50 and they are covering my insurance on damage to vehicles or shop etc.
 
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