This is the twenty-third article in the series
"90 Days to Transform Your Job Into a Business"
Time spent on hiring is time well spent.Robert Half
Your Expectations as an Employee
In your job, not only did your boss likely tell you what results you were accountable for.
She probably also said how the job was to be done, when the deadlines were, whom to work with, and more.
It was the company's responsibility to provide you with a work place, tools, a computer with appropriate software, a phone, email address, or whatever else you needed to do your job.
No Business Owner Ever Truly Goes It Alone
Not even a sole proprietor. This entire series has highlighted the fact that a range and depth of professional expertise is required for success that no one person could possible learn and keep up with.
Even if you have the expertise, you may not have the time to do for yourself what you do for others. For example, you may have to concentrate on marketing and sales and hire someone to help with creating or delivering what you sell.
It could also be a capacity issuethere are only so many hours in the day. You may need to have others help you build web sites, cut hair, mow lawns, do tax returns, write wills, etc.
So, Hire Employees or Contractors?
It depends. There are pros and cons to both with legal and tax implications. Your business team can and should help you with this decision.
For example, you may hire employees for some jobs and contractors for others.
This decision may also impact the employee benefits you offer and what the eligibility rules are.
Once Decided, Stay Consistent With the Rules
Back in 2000, temp workers at Microsoft won $97 million in a lawsuit. Thousands of temporary employees accused the company of improperly denying them benefits like stock options, pensions and health coverage by hiring them through temp agencies instead of directly. Afterwards, many other companies revamped their policies to avoid such a situation.
The IRS Has a Vote On This
Take the time to read the IRS rules and definitions concerning employee versus contractors. Figure out how those rules apply to you and set up your hiring practices accordingly.
Consultants, Graphic Designers, Attorneys, Accountants, and Other Service Providers
If you want to operate independently of your own clients, it is your responsibility to set up your contracts, work materials and tools, and other aspects so that your business relationship with your client supports your independent contractor status with the IRS.
The US Small Business Administration web site has an excellent section on this subject.
Use that knowledge to set up your own subcontractor agreement for hiring outside help.
Sources for Independent Contractor Agreement Templates
Whether you want to hire an independent contractor for professional or business services or you want to be one, here are sources of contractor agreement templates:
When using templates, review all sections and edit according to your circumstances. For example, the template you use may have wording that all disputes will be taken to court in Missouri, but you live in New York, which would be highly inconvenient if legal action is required.
You may also want to look into having a non-disclosure agreement if the person will have to have access to sensitive business information while working with you.
Be sure to understand the dividing line between what you need to provide to the contractor so he or she can do the job versus the tools and resources they provide because it's part of their business
For example, if a graphic designer is designing a brochure for you, you need to give him your logo in an electronic file so he can incorporate it into the brochure. However, you don't provide the computer, software, or training he needs to create the brochure.
How to Hire an Independent Contractor
When hiring an individual independent consultant, be sure to ask them for their W-9 form so you can file the 1099-MISC form at tax time. If the 1099 isn't necessary because of how their company is set up, they will tell you.
- Home or office repair contractors: They generally have their own contracts: How to Hire a Contractor Without Getting Hosed
- Management consultant: Free PDF How to Hire a Management Consultant
- Business coach: Six Tips On Hiring A Business Coach
- Attorney: How To Hire A Small Business Attorney
- Bookkeeper, Accountant, CFO: Building Your Small Business Accounting Team
- Quality consultant: How to Hire an ISO 9000 Consultant
- Marketing consultant: Reasons Why Hiring A Small Business Marketing Consultant Makes Sense!
- Sales consultant: When to Hire a Sales Consultant
- Web designer: How to Choose – And Hire – a Web Designer
- Graphic designer: How to Hire and Work with a Graphic Designer
- Freelance writer: How to Find (and Hire) Quality Freelancers to Write Content & Linkable Assets
- Search engine optimization (SEO) consultant: 10 Questions to Ask When Hiring an SEO Consultant
- Social media consultant: 10 Questions You Must Ask When Hiring a Social Media Consultant
Managing Your Independent Contractors
Once your consultant is on board, monitor project progress and results, be available for questions, provide materials and feedback in a timely fashion, and payments on time according to the agreement.
Respect the agreement you have in place by not expecting extras and by staying in scope. By all means, ask about them, but realize the request may be more complicated than you think or not included in the original agreement.
If you are unhappy about anything, tell your consultant and give him or her the opportunity to make it right.
When the project completes successfully, consider giving the consultant a recommendation on their LinkedIn profile (you need to be connected first) or a brief written testimonial for their web site.
If the consultant is not living up to the agreement despite your efforts, consider terminating the contract to save yourself time, aggravation, and wasted money.
Good Relationships Are the Key
In business and in life, good relationships with others is a key ingredient in your success. Thought, planning, and preparation are the foundation.