The Ultimate Guide to Growing Your Team as an Entrepreneur
Sometimes it would be nice to do it all, but let’s consider the value in finding the right people to contribute to your business and help it grow.
Top 3 Questions to Consider When Expanding Your Team
Answering these questions will not only help you determine the right time to expand your team, but help you document the role and establish expectations from the onset.
Will This New Team Member Be an Employee or an Independent Contractor?
The classification of a worker as an employee or independent contractor will determine whether you as the employer is responsible for withholding and paying payroll taxes. The worker’s classification is based chiefly on whether you have the right to direct or control the worker’s work. The IRS has a largely subjective 20-factor analysis you can use to assist you in making a determination. I will walk you through this the main drivers that should shed light on the classification.
Main Factors To Consider
Hint: if you answered yes to these questions, then you are leaning to employee.
How To Protect And Manage Expectations
You have found the right person and have classified them properly as an employee or independent contractor. Now it’s time to iron out obligations, compensation and protect your business from the liabilities that come with a new business relationship.
Employee
– Scope of responsibilities – what you expect from them
– Expected work hours – how many and what hours will they work
– Compensation – if they are salary, hours, any bonus structure or profit sharing
– Confidentiality – protect your information, customer list, and more
– Non-solicitation – protect them from taking your team when they leave
For your employees don’t forget an employee handbook that will cover all of your legal rights and notices that can be distributed to everyone on your growing team.
Independent Contractor
– Scope of their services – what specifically their services will include
– Schedule of deliverables – when each deliverable is due
– Fee structure – how you will pay them for their services
– Relationship of the parties – for tax purposes
– Indemnity – to ensure risks are placed with the right party
– Confidentiality – protect your information, customer list, and more
– Non-compete – ensure that they don’t leave & work directly with your customers
– Non-solicitation – protect them from taking your team when they leave
5/01/2023
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