Next up in our Business Lifecycle is another step where it's very important that you should check in with your attorney and your accountant. This is where accountants become important, especially for choosing whether to have employees.
In the early days of your company, it may be fun for you to do all of the work. You enjoy the hustle, the seven days a week, the crazy hours as you're getting your company off the ground. However, as things grow, you'll probably find that you need some help.
One option is to look for independent contractors who can help you on a per-project basis. You can use services online that can connect you with an independent contractor, maybe overseas, and be able to help you with what you're looking for. These days, there are a lot of people who are experts in exactly what you need, and they are there and excited to do the work that you don't want to be doing.
The other option is to hire employees for your business. This is where having an accountant becomes very important, that choice between an employee and an independent contractor has legal and accounting ramifications. The requirements for each are very different.
For example, you will have to pay a salary, withhold taxes, provide pay stubs, do all the reporting, and possibly even offer retirement accounts for your employees. An independent contractor is going to have a contract with you to likely perform work at a certain rate, and you won't have to deal with taxes, the taxes would be paid for by the independent contractor.
Another issue for you to consider is what are you going to do? Are you going to be an employee of the business, or you just going to be an owner? Some owners will just take their owner distributions and they will not be employees that draw a paycheck. Others however, need the paycheck so they can get certain tax deductions at the end of the year, including childcare credits, so you'll want to talk to your accountant and your attorney to figure out what's the best system for you and your business. There are very significant tax implications involved with that choice, and it's not something you should leave to some website that's going to mail merge your information into their generic forms.
If you're ready to hire employees and you want to make sure your employment contracts are appropriate, let's set up a Legal Strategy Session to review them (or create them). And if you'd prefer more information on the general steps to starting your business, you can download the Business Lifecycle report for more information.