PPB April 2018

by Terry Ramsay 12 | APRIL 2018 | INNOVATE Q A DISTRIBUTOR ASKS: As our business grows, I struggle with whether we should continue to hire independent contractors (such as graphic designers, sales reps and accountants/ bookkeepers) by the job, or add to our staff on the payroll. What parameters do other distributors use to make this decision? What types of contractor positions make more sense to replace with staff employees? A There really isn’t a right or wrong way to answer this question. It comes down to the volume of work to be completed, costs, and your comfort level over the control you can exert over the process. If you’re paying a third party $10 per vector for conversion and you only require 10 conversions per day, chances are you won’t find a full-time resource for less than $26,000 per year. The same goes for any other task you need done. Personally, I’m a control freak, so I prefer to have control over as much of the process, paperwork and data as possible, especially when the work is sensitive or very important. For that reason, I prefer to hire people on the payroll over contractors. If the work that needs to get done is mindless and of low importance, I’ll consider using contractors. But usually, in my opinion, employees are the best way to go. BRET BONNET President Quality Logo Products PPAI 304730 The simplest answer is to do the math. Compare the pay-as-you-go (contractor) model to the employee model. Be sure to include salary, insurance, benefits, tax filings, unemployment payments and filings and the administrative costs of employees related to taxes, health and welfare, etc. The most common outcome is that hiring employees is not the best economic model for a small business. The alternative is to eliminate most of the administrative costs and work by partnering with a specialized distributor. Find one that specifies in writing that your accounts are yours, you have no binding agreement and you can leave the arrangement at any time with no penalty. Find one that has the highest Better Business Bureau and credit ratings to be sure your profits are safe. Look for one that pays your profits instantly by overnight direct deposit. And, finally, be sure you are protected from bad debt and product liability. Then go ahead and build your business without the worry of employees. GREGG EMMER Chief Marketing Officer Kaeser & Blair Incorporated PPAI 103148 If you are asking this question, chances are you don’t have enough work to justify a specialty position. In my state, the cost to hire and keep an employee will be one of the most—if not the most—expensive business costs you can have. Payroll expenses include workers compensation, social security tax, unemployment tax, extra insurance and more hours for the Staffing For Success