After 11 consecutive months of hard work and perseverance to get his business up and running, the owner finally reached his breaking point.
If you’ve experienced this yourself, you can probably remember the same feeling. At some point along their entrepreneurial journey, every founder will eventually reach this crucial moment in their life, one where the next best, logical decision may be hard to come to terms with.
Like many other entrepreneurs in the beginning, this owner started and ran on his own from the very beginning – hoping it would stay that way as long as possible. But if you expect to keep growing, you must be willing to ask for help, and the first step is to hire help. However, the expenses involved in hiring employees and bringing them into the company frightens many entrepreneurs. While the help is needed, there is no way they can afford the payroll taxes, insurance premiums and benefits that come with having employees – not yet anyways.
Fortunately, due to the digital sphere we now reside and work in, there are other options for hiring help while avoiding the large price tags involved.
If you can afford to hire a traditional employee, we can help you decide if you are ready. When you have an employee, you get to decide where, when, and how they do their work. On the other hand, if hiring an employee is not in your best interest at this time, hiring an independent contractor may be the best option to avoid the expenses associated with employees.
An independent contractor acts like a standard employee, however, you have less control over where, when and how they complete the work you hand over to them. You assign the contractor a job and/ or project to complete, and – unless you agree to a certain arrangement – they decide how and where they will get it done.
The payoff for giving up the parameters you would set for a traditional employee, you are not required to pay any payroll taxes, additional insurance premiums or benefits.
For example, let’s imagine you need some construction work done:
- You can hire an employee who works under you, and you can tell them when and how to do the dry wall work, or
- You can hire an independent contractor to complete the dry walling, and they will decide how and when to get it done (you can still give them a deadline to have it done by, you just can’t dictate the exact hours they work).
It’s important to remember that, because independent contractors tend to cost much less than a standard employee, it is a frequently exploited area – one where business owners run into trouble with the IRS. Misclassifying an employee as an independent contractor can come with major penalties.
Below are some guidelines to make sure you are hiring an independent contractor and not an employee:
- Besides pay, no other benefits are provided
- An independent contractor usually works on a project basis
- An employee works under a long-term contract
- An independent contractor essentially sets their own schedule and uses their own tools, equipment, etc.
- You must issue a form 1099 by January 31 to every independent contractor you paid at least $600 to in the previous calendar year.
If you follow the rules and guidelines involved, independent contractors can be a great way to solve your hiring needs while savings thousands of dollars in taxes, insurance and benefits.
As the internet continues to inspire “independent” entrepreneurs, virtual assistants are growing in popularity.
Virtual assistants are independent contractors who operate from their own home or office and are hired to perform specific tasks for businesses. These tasks can include:
Social Media– We all know how important a social presence having is on the Internet these days, but we also know how much of a time commitment it can be. Virtual assistants are a great way to manage an efficient and effective social media presence, scheduling content, researching various platforms, and just monitoring your current profiles.
Data Entry- One of the most popular uses of a virtual assistant is for the constant data entry tasks owners have. This can include tracking social media stats, website visitors, and other metrics your business uses.
Managing Email- For those feeling overwhelmed by their inbox, you can hire a virtual assistant to sort your email and respond to them when appropriate. If you’re not comfortable having your virtual assistant respond directly to your emails, you can always have them just sort your emails into categories to make it easier for you to go through when you have the time.
Scheduling- A virtual assistant can be a great tool for managing your calendar and scheduling your travel, interviews, business lunches, etc.
While these are some of the most common uses of virtual assistants, the potential ways you can utilize their skills are endless. By keeping their work within the guidelines of independent contractors, you can have several of your daily tasks taken care of virtually, all while avoiding the expenses of traditional employees.
Find more in our previous post here:
5 Benefits of Hiring a Virtual Assistant for Your Business
While there are several places you can search to find virtual assistants, we always encourage you to reach out to a trusted individual or group for help to find and match you with one you can trust.
After all, letting someone into the depths of your business – and in some cases, finances- is a risk.
Our MCDA CCG team of business advisors can help you vet virtual assistant or provide you with specific recommendations based on previous assistants we have worked with. Because we work with businesses of all sizes and are industry-wide, we can use our expertise to partner you with the best virtual assistant for your current situation. All saving you time and money to focus on the most important areas of your business.
Give our office headquarters – in Placentia, Orange County, California – a call today to see how you can save!
Other MCDA CCG Recourses you may like:
How to Attract Gen Z Workers
1099 Forms Frequently Asked Questions Answered
CFO vs. Financial Controller: Key Differences to Understand
How To Manage and Record Your Cash Receipts
The Ultimate Guide: Types of Accounting Errors And Correcting Them
Managing Your Startup’s Cash Flow