Home Advertise Contact Blog Advertiser Login RSS
Newsletter Signup

Your Free Business Opportunity Resource Is Easy To Use
Home-Based Businesses
Choosing a Business Opportunity Growth and Profit Marketing and Sales
Plans and Goals Running Your Own Business Start-Up
Working From Home Entrepreneur Exchange Feature Articles
Opportunity Community Opportunity Focus In The News

Free Lead Generation is a hot topic these days since many pay a pretty penny per portal to generate leads to increase ROI.

Free Lead Generation is part of any markets platform.  It is important to note that this November was 'nutty' for lack of a better word.  The purpose of this blog post...

Small Business Media and tapping into that vein can be a tricky and somewhat slippery slope unless you know some tricks of the trade.  Getting your message in front of the right audience is often the key to success.  So, where are the keys to the kingdom you ask and how can you get your hands on...

Entrepreneurs' Day 2016 on the 15th was outshined by politics, climate change discussions and so much more.  That is a real shame since small business is the backbone of this Country.

Entrepreneurs' Day - In my world it is Entrepreneurs' Day every day! I think, sleep and breath Entreprenuership...

Sponsors

Paid2Save Click or Call Bill Toth (716) 345-1888
If you could Travel more, Have Fun, and get Paid doing it, would you want to know more about it?
How Many Leads Does It Take To Close A Sale?
This Article is now live on our blog and I know could be very insightful for many. Read On
The Ideal Length of Everything Online, Including Social Media Posts
When one of your busiest marketing channels limits you to 140 characters, you know that the internet sets its own rules.
I Want To Buy a Business Opportunity or Franchise
Who are the types of people who buy a business opportunity or small franchise? According to people in... Read on
 
Resource Center > Article
To Hire A Home-Based 1099 Or Not To Hire A Home-Based 1099? What You Don’t Know Can Cost You Big!
Share this Article:

With every venture large and small there comes a time when you can’t do it all. It’s at this juncture, as you are  reaching a critical mass, that you can potentially make a tremendous costly mistake that can come back to haunt you for many a moon.

Many home-based business owners start out on their own to break free from corporate America and enjoy the feeling of success derived from the fruits of their own labor. Being your own “everything” from CEO to janitor is truly a great feeling. Then something happens–growth. With growth comes a myriad of new challenges that one person can no longer tackle alone. Once you’ve past the start-up phase and move into the growth-phase you need to hire some help.

At this phase of your home-based business you need to make a plan and ask yourself what kind of help you require and how is it going to aid you to maximize your productivity & profits. Do you need someone to answer the phone or someone to do your payables, receivables, and
 everything else in between? Or do you need someone to perform your marketing? At this critical juncture you need to consider not only whom to hire and where to place ads on web sites or in print, you need to decide just what type of hire will it be. Will this new person be a full-time or part-time employee or should you consider hiring an 
Independent Contractor, also known as a “1099”?

When you hire an employee you need to address the additional costs associated with doing so. You must consider Federal and State taxes, social security taxes, and any number of additional taxes that can make your head spin. A good accountant will come in very handy at this point to aid you in making your decision. You also need to consider where your new employee will be working and what they will use as furniture and business equipment. If you’ve grown from the coffee table into your spare room do you have enough space for a second person? As you can see, hiring a second person can be more taxing, time consuming, and costly than you first have thought.

Here is where the story gets even more tricky. As a rule of thumb, when hiring an employee you should usually estimate costs at roughly 30% over the wage you will be paying them. So, if you thought you’d pay your new hire $14 per hour, your true cost will most likely be upwards of $18 to $20 per hour.

And before you think that hiring a 1099 will make those extra costs magically disappear, consider that while 1099’s  do afford you more flexibility, they usually charge more for their services. While hiring a contractor can ease the tax burden associated with having an employee, this flexibility for your now growing home-based business can come at a high price if this step isn’t well thought out.

Definition of a 1099 Independent Contractor

It’s very important to understand what a a 1099 is. Basically, a 1099 is an individual or business that provides services to another individual or business. A 1099 is a separate business entity and is not considered an employee. Some examples of 1099’s are consultants, agents, brokers or web designers. If you hire a maintenance company to paint your home office, the company is a 1099. The IRS has established a test which can help you determine whether a worker is a 1099 or an employee.

1099 Contractor

Disadvantages of Hiring a 1099

The main disadvantage of hiring a 1099 is miss-classification. Miss-classification is by far the biggest mistake you can make in this arena of hiring help. If you simply label said new hire as a 1009 that isn’t enough. They must actually be a 1099. 

If you do miss-classify an employee as a 1099, you
 might be subject to potentially huge IRS penalties such as back-taxes and interest. You might also risk exposure for an audit if your so-called 1099 attempts to file for unemployment 
benefits upon their termination. In such 
situations, you'd better be able to protect yourself by proving that 
the arrangement was for a 1099 and not a 
employee.

Additional Food For Thought

If you do decide to go the route of hiring on a full-fledged employee you need to determine who that person really is. Doing a background check for roughly a hundred dollars or so might be the best money you’ve spent in a long time.

 

Related Blog Posts

Business Opportunity Apps to make your life easier was the best title I could think of today my friends.  This is especially true if you work with images or you are a graphic designer.

Business Opportunity Apps and Sites have been on my mind as late.  Recently, I've been focused on image optimization...

The Business Franchise Opportunity Sales Tips 7 Part Series was an idea launched by Keith Shaffer Director of Personal at TheLocalProject.net two weeks ago after a coaching session.  The credit goes to him for this...

Getting More Out Of Life: Buying Getting More: How You Can Negotiate to Succeed in Work and Life was an easy choice. When you read that Google used it to train 30,000 employees, you gotta figure it’s got something going for it. I’m always on the lookout for helpful books and negotiation...

12 Apr 16 Posted by: Todd Hatch
in Running Your Own Business

Money-Saving Tools that Entrepreneurs who are involved with business opportunities, franchises and work-at-home positions know how important it is to track money and manage money, which ultimately helps you save money.

The goal is to have more coming in than going out, but it can be difficult...

Here is an overview of the differences between business opportunities and franchise, and how you can determine which is the one for you.

Business Opportunities vs. Franchises the age old question - which is best for you? Do you dream of running your own business opportunity? If so, what does...
 
   

SocialXpand Business Opportunity Interview w/ Brian Weiss was for me a new way to learn from a customer and whom I consider a friend in the industry.

I've had the opportunity to work for a while now with Brian Weiss who is the Director of Sales for the
Video Spotlight

If you could Travel more, Have Fun, and get Paid doing it, would you want to know more about it?

Premium Sponsor