Never Hire Your Workers?

A frequent question from budding entrepreneurs is:

“How do I hire people? And when?”

My Answer:

When you doing the work is getting in the way of you growing the company, AND when I have the cash to pay. Or when you just cannot stand it anymore!

How?

My general rule is that I NEVER hire anyone – I always contract via 1099. I only make exceptions if I cannot get away with contracting or if there is some overwhelming reason not to do so (people I might hire inside UAB or other corporate structure are two examples – the risk is not all mine.)

Generally when you hire, I would suggest you do so as 1099 or on contract also. (I know – go ahead and flame me!) By doing this contract role, you get complete control of the work without the risk of having an employee.  This way you pay them a direct amount and use them when you need them. I would even do this for a long term worker! Some IRS rules apply, and if in doubt seek the advice of your CPA.

It is not a big deal.

Some people really freak out over the hiring deal. Really is it not rocket science. You need work done, they want money. You agree to terms and commence in a working relationship. Just forget all the complexity you might see in your day job or HR, employee handbooks, benefits, etc. These matter – but later.  In the beginning, just get the work done.

Next time we will take a look at how to find define who you need to do the work.