I've been watching with interest the thread at SOWPUB concerning "Deck Restoration". Including 'contract' day labor.
Some are even taking the initiative and already placing ads prior to learning about, or checking into what they are actually getting themselves involved in. Nothing wrong with taking action. In fact, most people never do! But you want to be certain you are not getting the cart in front of the horse with this "money-making project".
First of all I have yet to see any discussion concerning working within city limits. Generally speaking, most cities, towns and communities have some type of building inspector and building codes you must abide by. Have you taken the time to apply for, or purchase, a Building Permit if needed for 'remodel' in your particular area???
Then again most areas require some type of License & Permit Bond of at least $5,000.00 to work within city limits. These types of bonds are currently costing $100.00 per town/city.
Now we can move on to Commercial General Liability coverages! DO YOU HAVE ANY???
Selling simple Advertising Boards to a restaurant or fax-blasting to offices are one thing. But conducting your operations, especially as a 'Building Contractor' on a premise other than your own - is quite a different matter - and opens a whole new can of worms.
What if there was a "Slip/Trip & Fall" which you were responsible for??? You had a small spill or pool of "Cleaner" that the homeowner slipped in??? Who "pays" for medical expenses??? HINT: YOU WOULD! Got it covered???
Or how about the homeowner disputing the 'quality' of your work, commonly referred to as your
"Completed Operations". Where would you get the funds to stave off a possible civil suit??? How about finding out you were 'out of compliance' with local laws pertaining to remodelling and are 100% liable, if not legally in trouble as well!!!
Now let's touch on possible complications to your personal auto insurance program. Are you rated for 'business' or 'commercial' use of your vehicles??? Chance are not very likely. I can tell you from experience that insurance carriers investigate more rigorously as the dollar amount of the claim increases.
For example... You have an accident 'on the way to a deck job'. Vehicle is loaded with supplies. The third-party has extensive bodily injury which you hit. Lot's of dollars are being spent at the hospital putting this pedestrian back together.
Your insurance carrier begins to ask 'pointed' questions. It comes to light you are involved in a business with your vehicle. There is most likely an
Exclusionary Statement pertaining to business use without notifying the carrier. Have you notified them???
What would you do if your carrier denied the claim???
Then there is 'Contract Labor'. Wyoming is a
Monopolistic State. Meaning Work Comp is handled at the State level and not by the insurance companies. Everybody always claims they know about "Contract Labor" law... Do you???
Where will you get the coverage in case one of your
"Don't worry I use Day Labor" workers decides to sue you for their injuries??? Especially since they were working under your direction.
Contract Labor is governed by an extremely strict set of complicated rules by the IRS. Head to
http://www.irs.gov and run through the checklist they have for what constitutes contract workers versus employees.
Are you filing 1099's on your workers??? Do you need a INS-9 form??? W-2's??? W-4's??? Are you certain you qualify for whatever status you are claiming???
In addition to your Commercial General Liability policy you're purchasing to properly work this "Money-making Idea", and it better include a classification for reconstruction/remodel of one to two family, private residence dwellings, you should also have a classification for Sub-Contracted Work including the amount of work subbed out.
At the very least you should apply for a business license and procure yourself an Employer Identification Number (EIN) for tax purposes. You can find the EIN forms here at
http://www.corpamerica/pdf/ss4.pdf .
Anyway... These are just a few thoughts concerning the zealousness of a few folks who "are running with this idea". And there are many more. Too many to go into detail here.
Suffice it to say I would highly recommend you speaking with your 'financial advisors' including your bookkeeper, insurance agent, and local city hall at the very minimum.
You could save yourself thousands of dollars by laying the proper groundwork BEFORE you get yourself into trouble - to deep to get out of. We're not talking about ticking off some office employee with annoying faxes here. We're talking about working on the property of others. Working with "Day Labor" and the exposures to many laws and regulations which are strictly enforced. More so then the Fax-Blasting laws.
This is definitely a doable business venture. But don't run into it blind on the basis of one post and a thread with half a dozen replies to it. It's not worth the risk.
Success and Regards... Mike
http://www.CrashCourseMarketing.com
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