Vending Business Independent contractor

[HBurkholder]

Client (husband & wife) has a vending business which has the potential of growing beyond what they can physically handle. In discussing this business growth with them I suggested the idea of them owning the machines, securing the locations etc and having some one service them as an independent contractor who would own his own vehicle and work on a percentage of sales. Does anyone have any experience with this type business to give some input as to how this could be set up or if the concept is even feasible. The husband had worked as a delivery man for a bakery and was paid as an independent contractor and owned his own truck. In fact he quit when the company was going to make him pay for his route at the tune of something like $100,000.

[outwest]

The big problem with vending..

is the cash nature of the business. In every scenario for servicing the machines, you've got to think about tracking the sales, the expected cash etc. So think about how are you going to track the sales independently of the contractor? Same problems with an employee of course.

There are systems out there that track inventory, machine stock, cash received etc by machine. If they haven't started that, now is the time before they get big.

[taxmandan]

Review state laws

State IC vs. Employee laws vary so check your state rules too. Ours are stricter than the IRS and he would be an employee in this instance. We have eight criteria used to determine whether they are an IC, and they have to meet ALL eight to qualify as an IC.