One of the decisions you have to make when starting a business is whether you want to hire an employee or an independent contractor. The answer to that question depends a lot on what your business does, and how established it is. It’s not out of the question for new business owners to hire an independent contractor, to get started. Many new businesses can’t afford to hire an employee right away. There are some pros and cons to hiring an independent contractor versus an employee.
Employee
An employee works for you and only you. They work under your guidance and will have to report to you for every shift. This means that you have full control over what they do and don’t do, and when to be in the office, and when not to be. These people fulfill roles that are essential to the running of every business. For example, marketing and bookkeeping are essential roles in most companies, that are best filled by employees you hire and train.
Independent Contractor
Hiring an independent contractor can be cheaper than hiring an employee. But the trade-off is that they will likely have their own way of performing the job that you need to be done. Independent contractors are usually hired on a per-project basis. This can be a good thing or a bad thing. It’s good if you can’t or don’t want to take on the obligations that come with hiring an employee. But it can be bad because just when you get used to working with an independent contractor, they will likely move on to another gig.
Other Considerations
When it comes to the IRS, you’ll need to classify your workers as employees. If you hire them as an independent contractor, you’ll need a written company of the agreement between them and your business. Whether someone is considered an employee or independent contractor for your business is something that needs to be made clear.
Please make an appointment with Spearing Capital and Consulting to find out more about hiring an employee versus hiring an independent contractor to keep your business running smoothly and efficiently.