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Thread: Have I been given a good offer?

  1. #1
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    Have I been given a good offer?

    Gene Cafe Coffee Roaster $850 - Free Beans Free Freight
    Im hoping to get some good advice from some of those in the know here as Ive not come across this situation before and its clouding my ability to make a good decision! :)

    Ive been offered a position. I think.

    Its a mobile coffee cart and, to cut to the chase, its basically operating the vehicle on the owners behalf for 20% of the takings. I dont supply anything, just make coffee and take my cut which, of course, means Im effectively sub-contracting as opposed to being an employee I guess. Could be more specific if need be but thats it in a nutshell.

    Ive not come across a commission based situation in Australia before and was wondering whether this was the norm in the art of mobile coffee?

    It seems like a good opportunity. Would it something worth taking on or do you think its a bit dodgy?

    Your comments would be sincerely appreciated.

    Thanks.

  2. #2
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    Re: Have I been given a good offer?

    If that is the offer be sure you know exactly what the takings are. Id suggest you ask to look at the owners books, or spend a day with him before you make the decision.

  3. #3
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    Re: Have I been given a good offer?

    Ive looked at the books and theres an average in takings that would net me around $500 a week nett (not in the hand) based on a 25 hour week.

    Of course tax, insurance and super has got to come out of that.

    I have the opportunity to do more hours though but, the thought has just occurred to me - if I do well and the hours increase..how do I protect my position? I suppose I cant, can I...


  4. #4
    Senior Member Dennis's Avatar
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    Re: Have I been given a good offer?

    Quote Originally Posted by 406370766D6E6B6C6D020 link=1243380325/2#2 date=1243381484
    Ive looked at the books and theres an average in takings that would net me around $500 a week nett (not in the hand) based on a 25 hour week.

    Of course tax, insurance and super has got to come out of that.

    I have the opportunity to do more hours though but, the thought has just occurred to me - if I do well and the hours increase..how do I protect my position? *I suppose I cant, can I...
    In that case it would be gross, not nett. Dont forget sick pay, holiday pay, workers comp. Does the principal have public liability and/or do you have personal liability insurance?

    And yes, pretty much like any job these days, you dont have any guarantees.


  5. #5
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    Re: Have I been given a good offer?

    There is a good chance you wont have to pay your own super. Im pretty sure that there will be arguments about that fact but the law is certainly on your side. When compulsory super came in a lot of employers made their employees become sub contractors to avoid paying super for them. The law has remedied that now.

    Justin

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    Super Moderator Javaphile's Avatar
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    Re: Have I been given a good offer?

    I would suggest that you check with your local/state governmental agencies to see if this position would be considered an employee or self-employed position.

    I dont know about in Oz, but situations like this in the US are dealt with differently in different states. In many (most?) states here this would be considered to be an employee position and would not be eligible for being labeled self-employed. At the core of the employee/self-employed determination here are the questions do you own the tools you use (in this case the van and its equipment) and do you determine the hours worked and the route you drive/service or does the person/company youre working for/contracting with set them.

    Here in the US as an employee the employer is responsible for paying such things as vehicle and personal injury insurance as well as various taxes. If on the other hand you are considered to be self-employed/sub-contracting you are responsible for paying for all the various insurances and performance bonds as well as paying taxes that are normally paid by the employer. Nor are you covered by unemployment or personal injury/workers compensation insurance unless you take out a policy of your own.

    Get as much information as you can from the owner and then take that info and talk to the appropriate governmental office.


    Java "Things that make you go Hhhmmm...." phile

  7. #7
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    Re: Have I been given a good offer?

    I think you can look at the books all day long, no one who offers you a job is going to give you the option that costs them more. Yeah it might give you an incentive to work harder, but I think if the guy who owns the van thought it would be cheaper to pay you by the hour he would.


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    Re: Have I been given a good offer?

    My advice? Get a copy of the contract and take it to a lawyer who does employment stuff.

    Just because you think youre a contractor doesnt mean you necessarily are.

  9. #9
    Senior Member greenman's Avatar
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    Re: Have I been given a good offer?

    How many coffees per hour would be produced over the 25 hours worked?

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    Re: Have I been given a good offer?

    The basic setup is that I would be operating as a business within a business. That is, I would provide an ABN (on my invoice), the fee being 20% of the takings as opposed to x amount of dollars.

    The principal has public liability insurance and the van is comprehensively insured.

    I basically provide the service of coffeemaking and driving and thats it. All materials, equipment, upkeep of the car, mobile phone, cards, uniform, fuel, the bookkeeping etc are paid for by the principal.

    I dont have any personal insurances (well, ok, health insurance but Ive always had that),

    I dont pay any other expenses - all are covered by the principal

    The hours are currently set but I can determine hours and routes if I wish,

    An hourly rate isnt always the way to go. Ive learned that the hard way (havent most of us?)

    Im aware of the situation in the US which is utterly different to its Australian counterpart - and makes me love Australia all the more.

    I took info to government dept and was told I was a contractor.

    A contract has not been signed as Im still thinking about it.

    I have absolutely no idea how many coffees Id produce in 25 hours - life is too variable! :)

    Thanks very much for your comments. Really very welcome - even the cynical ones! *;)

  11. #11
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    Re: Have I been given a good offer?

    I guess if you are happy with $24,000 PA (before tax, assuming 4 weeks off per year, and yes you will need it). You also have to remember you dont get paid for public holidays (unless you have events) your pay will go down in the summer and set up and clean up take around an hour per day so make sure you include that in your hours per week. Me I wouldnt do what I do for that much but I have my own priorities to look after. If it is experience you are after and the money is enough then go for it. 8-)

  12. #12
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    Re: Have I been given a good offer?

    I personally think $24,000 is still better than Unemployment Benefits! You will probably still fall in the bracket where you are classed as "Low Wage Earner", so would receive incentives at tax time and throughout the year.

    I think that, if youre working around your (potential) childrens schedules, doing something you enjoy, that is reasonably low stress, then I say go for it.

    I could handle doing something like this, rather than being stuck to a desk all day for 38 hours a week, trying to find time to get housework done, children fed, cleaned and homeworked, etc!

    Id just send a cautionary note to have any contract looked at by a Solicitor (ex-legal secretary in me coming out) to make sure there is nothing to hit you for six down the track but otherwise, go with your gut feel.

    As an Human Resources Officer nowdays, Id say that if you are in a position to afford to live on that amount of money, go make yourself happy!

    Cheers
    Di

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    Re: Have I been given a good offer?

    not sure if this is even negotiable but maybe you should put in a safety condition so even if you run a loss you still get a bit of money for running the van. example 20% or $300 if under a quota. its a big gamble for something thats not urs and so vague

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    Re: Have I been given a good offer?

    I personally think $24,000 is still better than Unemployment Benefits!
    YES!!!!! As someone who is (and certainly not wanting to be), I agree.


    All told, weve worked out that the hourly rate sits at a current average at around $24. Given the nature of the business, some days, depending on the clientele, this can jump a lot higher albeit thats not the everyday norm. The person who has it now runs it as a slow pace. What I get is basically up to me. I like the challenge in that rather than waiting for a boss to hand me $17 per hour for a 4 hour shift and minimal effort.

    And when you consider that the local hourly rates for a casual barista/coffeemaker are around $17 here flat (ie no special rates for after 6pm or weekends), and about $15 for permanents, theres not too much disparity there.

    Of course, with the changing workplace laws, I realise that these hourly rates may well rise come July.

    But ultimately, I am more concerned with any legal issues that might crop up, particularly because I have not operated as a sole trader/contractor before and because Im operating someone elses equipment etc.

    Thanks so much for the low turnover clause idea. Thats a good one and Ive written that down for inclusion into the contract.

    And thanks again for your feedback. This is great! :)

  15. #15
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    Re: Have I been given a good offer?

    Quote Originally Posted by 0C2F3C3A21222720214E0 link=1243380325/9#9 date=1243416773
    An hourly rate isnt always the way to go. Ive learned that the hard way (havent most of us?)
    I wouldnt mind an example of that for my own education please.


    Quote Originally Posted by 3A7E283B4E0 link=1243380325/12#12 date=1243419331
    not sure if this is even negotiable but maybe you should put in a safety condition so even if you run a loss you still get a bit of money for running the van. example 20% or $300 if under a quota. its a big gamble for something thats not urs and so vague
    This I agree with and its an example of when hourly rates can be the go.

  16. #16
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    Re: Have I been given a good offer?

    I wouldnt mind an example of that for my own education please.
    No problem.

    One example (and a classic one around here) you apply for a job based on x amount of hours (say, 20 or so), you are taken on as an employee of a cafe, promised x amount of hours and, in reality, are given 25% of the original estimate. Tough titties if you dont like it.

    In addition, the laws being the way they are at present, mean that you have to be given, say, 3 hours per shift or, at best, about 15 hours per week.

    As Im sure people are very aware of in here, this often doesnt happen.

    And of course theres the underlying clincher with casual work or your probation period of permanent work - you can be sacked at any time and, in 99% of cases, the worker does not have right of recourse with regards to unfair dismissal.



    But this is getting away from the original premise of this thread.

    So, if anyone has anymore comments regarding this offer Ive gotten, Id welcome them. I have to *make a decision by Friday.

    For those who have thus far assisted - your input is much appreciated and has given me food for thought. *Thanks. :)


  17. #17
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    Re: Have I been given a good offer?

    Sounds a little bit like a cab driver. Lots of cabbies drive for the owner of the vehicle and take a percentage. Costs are covered by the owner etc. Not sure if there are enough similarities to be usefully comparative, but it may offer something of precedent in terms of employee, employer relationship?

  18. #18
    Sleep is overrated Thundergod's Avatar
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    Re: Have I been given a good offer?

    Quote Originally Posted by 624152544F4C494E4F200 link=1243380325/15#15 date=1243463423
    No problem.
    Thanks for that. Now I understand where you were coming from.

    Sounds though that youll have control over the hours in this instance.
    the only problem I see is that the harder you work the more the owner gets; you slog your guts out to survive if the business is struggling and the owner gets 80%.

    If its a means to an end, do it.
    Im currently "between contracts" and any dollars would be better than playing Centrelinks game, as already mentioned.

    I dont think youve mentioned how much experience youve had making coffee, but anyway this would be one more thing to add to your resume and depending on how you "spin" it, could help with future employment.

  19. #19
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    Re: Have I been given a good offer?

    The principal in my mind is asking you to assume some of the risk if things dont go so well. The concept of a minimum daily / weekly amount would help protect you from this situation somewhat.

    On the other hand, its a good opportunity to earn some extra $ that you could otherwise do.

    I have no idea what the costs involved would be in a coffee set up (mobile incl van etc), Im assuming that there is a greater than 20% NET margin after all expenses have been paid (excluding wages) leaving 20% for you and whatever is left over for the principal.

    I guess you would have to look into things like does he have any contracts in place to supply a particular factory / office block etc, are there any events lined up that you will be attending on a regular basis, , what competition is there for coffee in the places that you will be, all that sort of thing

  20. #20
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    Re: Have I been given a good offer?

    I dont know whether the owner would go for your safety condition in terms of guaranteed cash in cases of low takings, but give it a go.

    As an alternative, why dont you make sure there are protections for you if the van is incapacitated - i.e. the low/no takings is something out of your control, rather than you being lazy (no offence meant - think about what the owner might say if you didnt make much in a week). It might effectively be income insurance for situations out of your control.

    As I said before though, and Hoyks said also, there are people much better qualified than CSers (read: lawyers) to review the proposal.

  21. #21
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    Re: Have I been given a good offer?

    I cant thank you enough for all this feedback. Youre all brilliant.

    I dont think youve mentioned how much experience youve had making coffee
    Youre right, I didnt :) I have 2 years experience working in cafes full-time. This doesnt include my time overseas backpacking where I worked in a variety of places serving all sorts of stuff. Recently, I re-entered the industry, did some refresher courses, signed up here and got back into it. I did this because I was totally over office politics, felt constrained tied to a desk 9 hours a day and missed the contact I had with people not to mention the sights, sounds, smells and heavenly tastes of the coffee world I used to know. In short, I was turning into a robot. Parts of me had already started turning into steel. Then the downturn hit and, voila, I was fortunate to opt for a payout which allowed me to holiday in Majorca for six months.

    Yeah right. A few grand I was able to put on my credit card (which I then chopped up).

    I succeeded in gaining casual employment but, to be honest, Ive been dicked around by cafes that much (competing for hours, being promised hours and not having them eventuate, buying your own aprons etc) that Ive had a gutful. I hasten to add that by saying this Im not bitter, just realistic in that I am just looking for other ways to fund myself without having to do the Centrelink two-step or rob a bank (too bloody dangerous these days). *:D

    The ideas you all suggested have really worked. *Ive spoken to the insurers of the van and their insurance covers me entirely so I dont have any outlay or responsibility (other to insure that I drive it properly and have a full licence) and I have this in writing. Im off to see an accountant today to get the ins and out of contracting (Im not a sub-contractor in this instance and the lines are blurred regarding employee status as someone wisely pointed out). *Also, the owner is willing to increase the percentage takings to 30% if I reach targets and is also willing to negotiate bonuses for business I bring in.

    The owner is willing to add clauses that include what I bring to the business as well as a force majeur clause which covers me in terms of being washed out or the venue being forcibly closed. I determine my own routes, times and territories as long as I achieve a daily base which, in my view, is very achieveable.

    Im also allowed to make modifications to the present conditions in the van - ie. cleaning regime, the way the tools are stacked, how the menu is placed and how the food (ie milk etc) is stored. This is really important as what is currently happening is not how I would operate a food business under Australian standards.

    I have an appointment with a business centre today who have organised someone to go over stuff with me and Ill be putting all these ideas on this thread on the table too.

    Yes, I realise I wont get the perks I became used to in my office life but Im prepared to work hard. My work ethic is strong. As long as the ATO is happy, Im happy.

    As I said before though, and Hoyks said also, there are people much better qualified than CSers (read: lawyers) to review the proposal.
    I realise this (and ultimately Ill have docs looked over) but in terms of factfinding I find that those who are actually doing the job know the ins and out of it which means that they can equip me with a good idea of what the vision should look like more than a lawyer will. Which is fair enough as lawyers apply the law (and some invent it) but they wont teach you how to fly under the radar. Well, not the ones you pay $200 an hour anyway :)

    Anyway, thats it at present. Again, I cant thank you all enough. All this has given me a real lift and optimism. Perhaps I can carve something out for myself - maybe even a van of my own one day.
    One thing I know I wont be doing and thatll be owning a franchise.
    :)



  22. #22
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    Re: Have I been given a good offer?

    Take it from someone who stepped off the corporate escalator to have a total change in vocation (from Credit Risk Manager for a finance company to owning own franchised video shop), it is well worth it. I dont know what I will be doing in 5 or 10 years time, but it wont be back in a corporate.

    Ultimately, I was making wayyyy more money in the office, but bordering on clinically depressed doing it, now, I have more money pressures, but enjoy the people contact and the knowledge that the more effort I put in, the more reward I get out, plus I am more contented within myself so a better husband / father.

    Franchises do have their place, just got to be the right one with the right conditions

    Sen

  23. #23
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    Re: Have I been given a good offer?

    Just a maybe to consider with the deal, you might want to consider what your access to some sites will be like if swine flu kicks into gear fully. Some businesses may go into lockdown and a good stop becomes 0. Not likely but something to consider, I know it scares me a little.

  24. #24
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    Re: Have I been given a good offer?

    Good idea seeing the accountant. In terms of much of the practical stuff they might be better anyway.

    Insurance, target bonuses, force majeure clause - you seem to have it under control.

    Good luck with it ;)

  25. #25
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    Re: Have I been given a good offer?

    You certainly seem to be doing your Due Diligence. Do let us all know how things go, good or bad.

    All the best.

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    Re: Have I been given a good offer?

    Sorry, I should have said coffee franchise. I dont have any experience with other franchises. My mistake, my apologies.

    Swine flu? Seasonal flu kills more people every year.

    Ill certainly give you a heads up on the outcome because the lawyer just slapped his hand on the buzzer this morning and said no way so Im waiting to see what the accountant says. Then I can step back and they can duke it out...yeh. ;D


  27. #27
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    Re: Have I been given a good offer?

    My comment on the flu isnt based on what the current reality is but what could happen and what is being planned for, I dont think there is going to be any issues but I just thought it would be prudent to consider in negotiations.

  28. #28
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    Re: Have I been given a good offer?

    at least the swine flu gave the reporters something else to comment on rather than continually depressing things further with "the recession"

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    Re: Have I been given a good offer?

    My comment on the flu isnt based on what the current reality is *
    Well if todays reports are anything to go by, perhaps it is. This is what happens when ships are allowed to dock and quarantined school students dont stay home.

    at least the swine flu gave the reporters something else to comment on rather than continually depressing things further with "the recession"
    Yeah but it brings obscure politicans out of the ether prophesising death and gloom without a skerrick of evidence. I mean, does anyone know who Nicola Roxon is? Nah, me neither *;D

    ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
    ANYHOO...after all that, I dont think Ill be taking the van. Lawyer didnt like it and the accountant raised a brow and muttered something about working under the radar but, unless the cut was raised to 50%, the deal wasnt a good one and explained why. Im a bit disappointed but over it.

    Well I have a few interviews this week. Hopefully one of them will lead to a job.

    Cheers everyone! :)


  30. #30
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    Re: Have I been given a good offer?

    Behmor Brazen - $249 - Free Freight
    Unfortunate but I always say that with every opportunity you look at you learn something for the future so good luck. 8-)



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