EMPLOYEES, SUB-CONTRACTORS AND RISK
Who gets to decide whether a worker will act as an employee or as a sub-contractor? It should be a key concern to independent contractors.
Some workers prefer the stability of a steady pay cheque and the ease of having taxes, EI and CPP deducted and remitted on their behalf at source. Other workers prefer the flexibility and tax write-off potential of sub-contracting.
My preference was strongly towards having subs.It offered me motivated workers, flexibility in scheduling, simpler books and less pressure. It kept labour as a cost of sales, not overhead.
So who should decide....workers or employers?
Turns out, neither...
Sometimes it felt like my days were spent slaying dragons, putting out fires and squeezing in enough value-generation (painting) to be able to keep the wheels turning for another day. Rinse and repeat.
Most of the clients I worked for were more financially successful than me. Once in a while there was a customer that seemed to have things figured out pretty good - they seemed successful at life. If I had a good rapport with them, I would ask them for one piece of advice that they thought was a key factor to their success over the years. I thought of it as mining for nuggets. Why insist on doing things the hard way if there was an easier option?
Some of the answers I received didn't resonate - they didn't jive with my personal values. Some advice was straight forward, practical (i.e. work hard). In ten years of asking, the most interesting, beneficial and actionable answer came from my best customer. I don't think it was a coincidence.
Jim, I thought, would be a good person to ask. He owned and operated a high-end custom home design/build company. At the time he simultaneously owned and operated a high end restaurant in the heart of wine country. Those two business sectors alone were notoriously challenging for entrepreneurs to survive in, let alone thrive. Besides that, Jim is an accomplished musician. He and his wife help their 4 children reach their potential through schooling and entrepreneurship. Jim is very busy. But he finds time for family, exercise, hobbies, holidays, and for everybody that he comes in contact with. And he never seems stressed.
What was one key to his success?...
ESTIMATES PART 1 - FREE ESTIMATES
WHY: PROFITING FROM THE RIGHT APPROACH
This week I met a new colleague, a fellow painter and business owner. He mentioned that he has been busy working 7 days/week in order to catch up on work prior to an upcoming family vacation. He is midstream on a small housing development of 10 homes that is progressing quickly. His phone is ringing with more work from the install department of a big box retailer. He was in the paint store at dinner time waiting for colour matches for the next day so he could keep his crew of seven guys running steady and keep the client's project moving forward. Then he said it...
'I've got 3 estimates waiting for me when I get home.'
Boy do I know that feeling. There goes the rest of his evening. A whole day dedicated to his painting business. A whole week. A whole month...
I've had a love, hate, love relationship with estimates...
THE 10% SOLUTION
If you operate your micro contracting business as a sole-proprietor or a partner in a partnership, one challenge you might face is remitting your personal income taxes in a timely manner.
One of the most effective business strategies was gifted to me about five years ago by a close friend who operated several micro businesses.
It is an extremely simple solution, but very powerful.
Michael Gerber, author of The E-Myth says: 'the system is the solution'. This system might work as well for you as it has for me...