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Have someone else come in and do birthday cakes? - Page 2

post #16 of 33
Quote:
Originally Posted by Annabakescakes View Post

RMy part would be the same for every cake, i would take the order, discuss it with the contractor, collect payment, bake, and fill most likely, then my part would be done. I know what it costs me, and an average of how long it takes to do my part, and I would still have my own cakes to bake and fill. The only variable is what the customer is paying, so that part the contractor earns would be the variable. I'd really prefer not to over complicate things, and would pay myself the exact same thing for doing it per cake order. The rest would go to the contractor. Simple.

This would be an extremely generous compensation package for your contractor, since you would be essentially reversing the roles of entrepreneur and employee by collecting your own costs and a small fixed profit for yourself with all the additional benefits accruing to the contractor.

If your primary goal is to have as simple a compensation structure as possible and you are not concerned about the opportunity cost of lost profits then your formula will work for you.
post #17 of 33
I think what you are proposing could work if you got just the right person. If what they are looking for is a foot in the door to build their own business it could be a problem. They might not want to put out a product without their own name on it. However, if they can appreciate what you are offering in terms of an already established business with a solid reputation and customer base, this could work.
Have you had much communication with the person you have in mind? You mentioned that she was interested in renting your kitchen; does that mean she wants to be doing her own thing? Or do you have some indication she would be interested in what you are thinking of?
post #18 of 33

If the work has to be done in your kitchen (because that is where the license is) I don't think you can consider the other baker an independent contractor.  Would have to be an employee.  But please check with your state regulations.

 

Liz
 

Follow me on my Twitter handle: @Sugar_Iowa

Or on Facebook: https://www.facebook.com/SugarFineBakedGoodsAndConfections

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Follow me on my Twitter handle: @Sugar_Iowa

Or on Facebook: https://www.facebook.com/SugarFineBakedGoodsAndConfections

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post #19 of 33
Quote:
Originally Posted by liz at sugar View Post

If the work has to be done in your kitchen (because that is where the license is) I don't think you can consider the other baker an independent contractor.  Would have to be an employee.  But please check with your state regulations.

Good point. The IRS has a pretty good guide (although as you said some states may vary), in this case I agree that this sounds like an employee situation.

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Behavioral-Control
post #20 of 33
Hmm. I am kind of thinking out loud here but I wonder if a partnership kind of thing would work? Not an equal partner, but a small percentage sort of thing. I really don't have a great handle on small business employee laws and whatnot, especially in the US, so feel free to disregard my thoughts here.
post #21 of 33
Just chiming in. I have a lady who I contract all of my sugar flower work to. I'm just no good with it. She's not a partner but I do supply her with gumpaste. I work all that in to my pricing and it's worked out nicely.

While its not the same I just wanted to share that it can work. Don't know that I would want to do it with a complete stranger. But I'm a success story of sorts!
post #22 of 33
Thread Starter 
I know of several independent contractors that do painting and maintenance for an apartment complex and the work has to be done there, but they have to use their own tools, that is the only thing I am worried about. Obviously I would have to look into it further.
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post #23 of 33
Can u explain more about ur arrangement please
Quote:
Originally Posted by morganchampagne View Post

Just chiming in. I have a lady who I contract all of my sugar flower work to. I'm just no good with it. She's not a partner but I do supply her with gumpaste. I work all that in to my pricing and it's worked out nicely.

While its not the same I just wanted to share that it can work. Don't know that I would want to do it with a complete stranger. But I'm a success story of sorts!
post #24 of 33
What if she had a license too and she just uses the equipment would it still be considered a employee?
Quote:
Originally Posted by jason_kraft View Post

Good point. The IRS has a pretty good guide (although as you said some states may vary), in this case I agree that this sounds like an employee situation.

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Behavioral-Control
post #25 of 33
Before you get too far into how you'd pay them, are you even sure they'd be interested in that kind of arrangement? If she approached you about renting your kitchen I'm guessing she's looking to start her own business rather than a job.

Are you proposing that she brings any clients to you and they buy from your business, with her doing the decorating? Is she ultimately going to want to go out on her own, and if she does how will you handle the clients?
elsewhere.
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elsewhere.
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post #26 of 33
Quote:
Originally Posted by hislilbaker89 View Post

Can u explain more about ur arrangement please

It's a neighbor I have. She's amazing with her hands, but she's not a baker, and has no interest in being one. So I mix the gumpaste and let it mature, and take it to her. I price the sugar flowers and she gets that part of the money. I get paid for the cake and other decorating. She also is in on the discussion of the design of the cake if they want flowers
post #27 of 33
Thread Starter 

Someone privately posted something to me, (because she didn't want to start arguing semantics either), that I will look into further, but this is what they said (edited to stay anonymous and to take out all the hilarious things she said about a CC member)

 

 

Quote:

...... but I don't feel like having ***** pick it apart and ask me questions, lol.

I have an arrangement with a woman and a business I own, (not caking.)
I own the business and location, all the tools, pay all the bills, etc etc, she comes in as a contract worker and 'rents' my tools, and gets paid a commission per job.
It works out well for both of us, and is completely legal in my state

 

So, it has been done, and it works, and it certainly was concise, without a lot of added off topic, dead horse beating and BS. HOW REFRESHING! I love it.

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post #28 of 33
Thread Starter 
Quote:
Originally Posted by morganchampagne View Post

Quote:
Originally Posted by hislilbaker89 View Post

Can u explain more about ur arrangement please

It's a neighbor I have. She's amazing with her hands, but she's not a baker, and has no interest in being one. So I mix the gumpaste and let it mature, and take it to her. I price the sugar flowers and she gets that part of the money. I get paid for the cake and other decorating. She also is in on the discussion of the design of the cake if they want flowers

I would love someone to do figure work for me, I really would love to be able to whip out beautiful people and pets, but I am not interested in it enough to practice.

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post #29 of 33
Quote:
Originally Posted by Annabakescakes View Post

I have an arrangement with a woman and a business I own, (not caking.)
I own the business and location, all the tools, pay all the bills, etc etc, she comes in as a contract worker and 'rents' my tools, and gets paid a commission per job.
It works out well for both of us, and is completely legal in my state
...
So, it has been done, and it works

The situation as described above certainly can work and be fair to both parties if the commission is based on the value added by the contractor. You may think this is "semantics", but it's a critical component of your compensation structure that will help you maintain your profits down the road.

And in any case, I don't think anyone has said this type of arrangement was illegal.
post #30 of 33
Quote:
Originally Posted by hislilbaker89 View Post

What if she had a license too and she just uses the equipment would it still be considered a employee?

The distinction between contractor and employee (from the IRS and the state) can sometimes be unclear. The best thing to do if you have a question is to contact a local attorney with expertise in state and federal labor laws.
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