Employee vs Independent Contractor

IRS Announces Worker Classification Audit

The IRS recently announced that it will conduct 6,000 audits focused on whether businesses are properly classifying their workers as employees or independent contractors.  Employers should take the time to review their existing arrangements with independent contractors.  If an employer has classified an employee as an independent contractor and has no reasonable basis for doing so, they may be held liable for employment taxes for that worker.  In addition to this tax and potential penalties for employers who misclassify workers, employers may find that workers reclassified from independent contractor to employee are now seeking to claim benefits from the employer, such as health benefits and matching 401(k) contributions.

As a general rule, an individual is an independent contractor if the employer for whom the services are performed, has the right to control or direct only the result of the work and not the means and methods of accomplishing the result.

Technically speaking, the classification determination is made under a common-law test based on all the facts and circumstances.  Common law rules include three characteristics, which are used by the IRS to determine the relationship between businesses and workers: behavioral control, financial control, and the type of relationship.

If, after reviewing the three categories of evidence, it is still unclear whether a worker is an employee or an independent contractor, either the business or the worker may file Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding, with the IRS.  The IRS will review the facts and circumstances and determine the worker’s status.  This process can take up to six months; however, businesses that continually hire the same types of workers to perform particular services may want to consider filing the Form SS-8.

This is a major topic affecting entrepreneurs, start-ups, and small businesses.  Steiner Business Solutions will be addressing this in an upcoming Business Seminar.  Make sure you go to our website and look for the date.  You can register for any of our free seminars at www.steinerbusinesssolutions.com.

Employee vs Owner Mentality

Over the last several years I’ve met many business owners – single operators and partners within a group.  What I’ve noticed is that some owners lack the right mentality to own (and manage) a business.  I call it the “owner mentality”.  Instead,  they still hold onto an “employee mentality” – a mentality developed over many years while working for others OR relying too heavily on other business partners to make things happen.  When you have an employee mentality, you expect things to change or get better, but you expect it will happen somehow naturally- or you depend on someone else to make it happen.  That’s not the mentality of an entrepreneur or someone who’s successful.

If you’re in business for yourself, you need an owner mentality.  With this mentality, you know it’s up to you (and only you at times) to make it happen.  Don’t look for others to carry you or bail you out.  I can personally speak to this topic because I’ve had to wear many hats in my company.  It’s my name on the door.  I have no formal training in sales & marketing.  I’m not the most outgoing person, so networking doesn’t come naturally to me.  But I know that if I’m going to make my company successful (especially in one of the worst economies of all time), I need to step out of my comfort zone and do the work.

What’s your mentality?  Are you waiting for the phone to ring? Or…Are you making the phone ring!

More pics from Biz Linc 2009

Bill Rancic from Apprentice

How YOU doin??

A vendor looking to partner-up

Biz Linc 2009

Visitor learning about SBS

We had our big day at Biz Linc 2009 just a few days ago and I can report that it was a successful event for the company.  All the hours, all the frustration, all the anxiety, and all the money that went into this event were well worth it.  The feedback we got from friends, fellow exhibitors, vendors, and visitors to our booth was all very positive.   I’m very proud of my team for handling themselves in a fun, friendly, and professional manner during a long day.  It takes a lot of energy, both physical and emotional, to run a trade show event.  I’ll admit that it took me about 2 full days to recover!

I want to thank everyone who came by our booth to find out about Steiner Business Solutions.  We enjoyed the conversations very much.   I truly enjoy being around business owners and entrepreneurs.  It reminds me time and again why I ventured out on my own and why I enjoy doing the work I do.  We’ve followed up with everyone who left us their information, and we’ve been fortunate to have already scheduled some follow-up meetings.  As I’ve said before – once people hear about and experience the way we do things, we rarely lose their business.

As a small business owner who started from scratch, I’m very proud of what I’ve accomplished to date.  It may sound corny, but it’s always been a dream of mine to have my own company represent itself at a trade show.  You have to know that it’s the right time however; don’t let your ego or ambition dictate the timing.  I can remember signing up for a JMU alumni networking event last year.  The event administrator and a few friends asked if I was going to set up a booth display for SBS.  They said, “This is a great opportunity for you!”.  If my ego had made the decision, I probably would have done the booth.  Who knows how it would have turned out, but ultimately I decided against it because I knew the timing wasn’t right.  At the time,  I didn’t have the book of business or marketing collateral to support the decision to put myself out there; but more important – I didn’t have the confidence.

At Biz Linc 2009 – I had it all!

Good pic of our booth

I find it interesting……

that Wachovia calls my money market account “Small Business  High Performance Money Market”, yet I earn a staggering .05% yield on my money.  That’s like me calling the Mercury Comet I drove in high school a “High Performance Sports Car”.

Takeaways from recent attendance at PR seminar

On Sept 1st, I attended a panel discussion hosted by Richmond BizSense.  The topic focused on how the business media finds its sources, scoops and compelling stories.  I thought it would be worth my time to attend because as a business owner, I’m always looking for ways to promote my business.  I think most would agree that a brief mention, or article, in a local newspaper or website would be invaluable exposure – and more than likely lead to increased sales.

Here are a few of the key highlights I took away from the discussion:

1. Writers  & editors said they are looking for “trend stories”.  How does your company fit in or relate to current business trends?
2. Develop relationships with one or more local reporters.  Don’t just blindly send them your story and expect them to follow up.
3. Ask reporters & writers what types of stories they’re working on now.
4. Comment on stories that have already been written – suggest different angles or simply say “nice story”.
5. Email is the preferred method of communication.  Try to avoid cold calls – they don’t like those.
6. When sending emails, put something descriptive in the subject line – don’t leave it blank.
7. Put all your text in the body of your email.  Don’t put one or two sentences in the body and attach a word document.  This will help when the editor does a keyword search when going through all their emails.
8. Press releases need to be short and concise – one, maybe two paragraphs.  Again – load it up with keywords.

Hope this was helpful!

Dan