You all know I’m a big fan of bootstrapping and utilizing independent contractors is one technique to help entrepreneurs accomplish that. However, it’s important to remember that, while the use of independent contractors can be of great benefit to businesses in certain situations, you need to make sure that these independent contractors are actually independent contractors and not employees whom you’re just avoiding classifying as such. This week’s video shares some basic rules that you can use to help you decide if a particular role should be classified as an employee or as an independent contractor so that you don’t get in trouble with the IRS.
The first criterion that the IRS uses to decide if someone is an employee or an independent contractor is behavior control: do you control how the person does the job they’re assigned to do or do you just care about the output? If you tell someone when, where, and how to work or provide detailed training, s/he is probably an employee.
The second criterion is financial control: if the person working for you is in control of his or her own business expenses, sends you an invoice for work, and can decide how much to charge and whether that rate means he or she makes or loses money, the person is probably an independent contractor. If, however, you provide all of the equipment and materials, set the rates, and pay without being invoiced, the person is probably an employee.
Finally, the way you structure the relationship is key to whether the person is considered an employee or an independent contractor. Does s/he work for you indefinitely at a set rate or are is s/he contracted on a per project basis? If someone is hired to do a specific project in a specific timeframe for a specific price, s/he is probably a contractor. If, however, you hire him or her for an indefinite number of projects lasting an undetermined amount of time and pay what amounts to a salary, you probably have an employee.
It’s important to make sure that you don’t mis-classify employees as independent contractors because the IRS is cracking down and you can wind up in a lot of trouble and facing stiff penalties if the IRS decides that you should have classified some or all of your independent contractors as employees and followed the relevant tax and employment laws.
It’s very likely that at some point along any entrepreneur’s business building journey they’ll be interested in getting a loan or line of credit from the bank to help them manage and/or grow their business. It’s important for entrepreneurs to understand what bankers will look at and evaluate before the time comes when they actually need the money. This week’s video explains the 5 Cs of business credit so that you can get your financial ducks in a row now and have a much better chance of getting approved for a loan in the future.
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As your startup or small business grows, its taxes will become more and more complicated. Most of us simply do not have the training or experience to make doing our own taxes worthwhile and would be better served to hire a professional to help us out.
Here are few things to consider when searching for the proper tax professional for you and your business:
In an earlier video I talked about how small companies can attract and retain top employees even when they don’t have the cash to offer the compensation packages that big companies do. One of the things I mentioned is that top employees want to feel like they’re continually learning and growing, so it’s important for small companies to offer training and development to their employees. The logical next question then is: how do companies implement a successful employee training and development program when they don’t have much spare cash to spend on it? Check out this week’s video to find out:
Last week I walked you through the basics of creating a solid marketing plan that you can use to promote your startup or small business. Much of what that marketing plan is built around is comprehensive market research, so I thought I should give you a little more detail about where to get some of the information you’ll be attempting to dig up about your ideal customer as you begin to work on your marketing plan.
Many entrepreneurs are afraid to dig into doing market research because they don’t know where to begin and fear that the only way to get good data is to pay a market research company a ton of money. When you’re just starting out with planning your business, however, you can do a ton of very effective market research yourself, for free. Check out this week’s video to learn about some of the best tools out there for getting market research without spending more than you already do for your internet connection.
When you’re just launching a company or you’re trying to grow a small business you don’t have the massive marketing budget or penetrating brand recognition of major multinationals. Developing a solid marketing plan is key to successfully bringing in new customers and building a thriving business. Watch this week’s video to learn the basics of creating a solid marketing plan for your business’ success:
Many aspiring entrepreneurs are tripped up by a common fear that sidelines their businesses before they even get started: a fear of sharing their idea. While it’s natural to want to protect your “billion dollar idea” so that you can maintain control and build the business of your dreams, if the fear of someone stealing your idea prevents you from seeking out advice, feedback, and mentorship it can easily prevent your success. Watch this week’s video to find out why this fear is so damaging and how to prevent it from crippling your company before it even launches.
Naturally, one of the biggest struggles for any new business is marketing. They don’t have the name recognition they need but they also don’t have the money to fund major marketing projects or pay for a public relations team. That’s why entrepreneurs have to learn a few tricks to try to get their names out into the press and in front of potential customers and one of those tricks is the service Help a Reporter Out. Watch this week’s video to learn what HARO is, why you should be using it, and how to get started.
Update: I got a note from the folks over at MonkeyLearn who said, “we recently discovered that some experts sources are using MonkeyLearn to create personalized alerts for HARO requests. This helps them speed up the process of answering relevant HARO queries and save time. With this in mind, we wrote a guide about automating this process in four easy steps (without writing a single line of code).”
I haven’t tried it yet but I’m interested in anything that helps me save time so I wanted to share. Let me know if you give it a try and find it helpful. Again, here’s the link to their guide.
Last week I talked about how to manage your business from anywhere so that you can take full advantage of the freedom that entrepreneurship gives you and travel the world if you’d like. This week, as promised, I want to share some of the tools I use to help me while I manage my businesses remotely. Some of them may be familiar to you while some may be brand new but they’re all incredibly useful so check out the video below and then let me know in the comments what tools you use to help you manage your business(es) as you travel.
As you’ll know if you’ve explored the other pages on my website, I’m a full-time nomad and I’ve spent this year traveling through Latin America to explore the entrepreneurial ecosystems in the region. The fact that I have no real home base hasn’t stopped me from running my businesses, so I was recently asked to write a guest post for Under30CEO about how to live life as an entrepreneurial nomad. I got such a great response from that piece that I figured I should adapt it for video and share it here, in case some of you would love the freedom of being a nomad.