[RTC List] List Digest, Vol 116, Issue 3
Tina Nerat
tina at neratech.net
Fri Dec 25 14:25:53 PST 2009
I replied to Kate directly earlier, but since this discussion is continuing,
the essence of what I told her was to go to SBDC www.northcoastsbdc.org
<http://www.northcoastsbdc.org/> where you can make an appt to see a
business advisor (free and confidential). There's lots of help, workshops,
and information on this subject. Tina
_____
From: list-bounces at redwoodtech.org [mailto:list-bounces at redwoodtech.org] On
Behalf Of Mike Hamanaka
Sent: Friday, December 25, 2009 1:08 PM
To: list at redwoodtech.org
Subject: Re: [RTC List] List Digest, Vol 116, Issue 3
Hi Kate and Dave,
Regarding the question of 1099'ing it in Humboldt.
This also is a concern of mine lately. Living in Humboldt, you have to find
a reason to do something, very much a bedroom community, in fact, I estimate
that 25% of the population probably just sits on their computer, albeit
mostly gamers and very few freelancers.
"1099 employment" is kind of a funny statement, because one is not the
other.
Properly would be "1099 Contracting" in my home office, I even more
properly call it "W9 contracting", and I have a pre-filled out W9 (in jpg
format) that I email to my customers right from the start, usually as soon
as they inquire for services. I DO NOT SEND MY SOCIAL SECURITY NUMBER,
instead I have a EIN, or an employer identification number, which can be
used for 1099'ers instead of their social. Here is where I applied for and
got my EIN https://sa2.www4.irs.gov/modiein/individual/index.jsp
The obvious/more beneficial answer is to become a remote employee of the
bigger corp, you will have several employee rights, that you waive as a
contractor. One of the largest rights, is the ability to use the State of
California to collect your (late) wages or late wage fees. Whereas as a
contractor you may not have simple remedies. In Eureka, we are fortunate
enough to be one of the 18 cities in California that has a Labor Board
Office, (not much for staff, but also not much for a line either, think
empty DMV with 1 worker in it.) The easy alternative to this type of a
fiasco, is to work as a contractor on Retainer, preferably a non-refundable
retainer. In other words all work is prepayed, as a 1099 contractor. Like
a lawyer. Further... you will be limiting yourself as a work-at-home who
only works by prepayment, for me as a Full-Time student my little bits of
available consulting time are valuable to my dozen or so customers, (supply
and demand, right?) since I work from home, my time is also valuable to me.
demand and no supply :P
Also I agree that an intermediate agency can be a strong way to go. Unless
non-competes exist I don't see any problem with a person being a
simultaneous employee of a Corporation A, an employee of a temp company B, a
1099-contractor of temp company C, the owner of a corporation, a sole
proprietor, a stock investor, etc. etc. etc. ---some might even argue that
you should grow your own vegetable and have goats, etc. etc. It is a weird
way to think about work, but you (and me) have chosen careers where you
make things automatic and easier for more people and thus eliminating half
of all labor jobs and even a few middle manager jobs. It is literally my
career to eliminate the need for more employees for my customer, hence the
term "outsource" and "technology" . The career path we have chosen is one
that is imbalanced, how much actual productivity do we provide to the world
through our mouse and keyboard. So my theory of balance is that people who
use computers for work also need to offset their lazy contributions with
hard work contributions, like growing a veggie garden or riding a bicycle.
etc. etc. Anyways that is another story for another discussion.
But consider your time, you are a work-at-home so that you don't commute 10
hours per week, socialize 15 hours, deal with office BS 10 hours week, etc.
>From home it can take 5 hours just have 3 billable hours. Probably not
healthy to think that you can bill more than 6 hours in a day. Although, I
know people who do billing as an employee for a temp agency for more than 10
hours per day, but they have no life. I have even done the crazy billing of
20 hours per day for 2 days in a row, but I think the damage to your
yin/yang is not quite worth more than 6 billable hours in a day. Somehow
this is reminding me of the new movie Avatar. Again, another discussion.
As a contractor forget about overtime, actually in California forget about
overtime as an Tech employee, unless you make less than $44 an hour. (I
think that is the value)
If you were going to start your own corporation, you can probably charge a
bit more, but is it worth it? Solely based on what you can earn in the
year, because your corporation will probably need insurance in order to work
directly with the bigger corps. (Your own relationship with your corp is
irrelevant whether 1099 or employee). But I might suggest that creating a
corporation, buying insurance, and playing that whole game in order to
increase your viability and profitability as an independent or freelance
acting as a Corp to Corp will probably be a break-even venture to a person
who is just a sole proprietor. Unless you are "incubating" a small
business... which you might have trouble around here. For a number of
reasons.
1. Office rent, although much lower than other places in CA, is way
over-priced, better to keep the computing at home and in private, and say
hello to a commute again, these small towns are not that close.
2. Because the educated work-force is also medicated and doesn't want to
work, especially not for chump wages.
3. The small business centers can be useful to some people, but from my
experience they are business poison and simply lead generators for business
loans, in otherwords, they prepare you to go and talk to the banker, and in
some cases they want you to be rejected so you qualify for other instruments
of debt. Anyways, better to bootstrap it, what could you really need for a
web business anyways, just marketing? everything else is cheap, free, or
your own time.
4. The internet is choppy, because too many people are watching hulu while
your trying to work.
5. There is almost no chance of productive networking here. You will have
to travel for 1 full day north or south to connect with business people who
can make good referrals.
To sum it up, be a remote employee or a sole proprietor using a W9 with a
retainer. At minimum, it will save you in collection expenses and time.
If you plan to make a startup, boot strap it as a sole proprietor for as
long as possible.
Mike Hamanaka
Website Production
Vertualize.com
On Fri, Dec 25, 2009 at 12:00 PM, <list-request at redwoodtech.org> wrote:
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Today's Topics:
1. Re: 1099 contractor experiences/resources? (Dave Thewlis)
----------------------------------------------------------------------
Message: 1
Date: Thu, 24 Dec 2009 16:40:04 -0800
From: Dave Thewlis <dave at dcta.com>
To: Kate Trower <kate.trower at yahoo.com>
Cc: list at redwoodtech.org
Subject: Re: [RTC List] 1099 contractor experiences/resources?
Message-ID: <4B3409E4.7080903 at dcta.com>
Content-Type: text/plain; charset="iso-8859-1"; Format="flowed"
Kate Trower wrote:
> I find myself taking a crash-course in 1099 employment. If anyone on
> the list is currently operating under a 1099 or has in the past, I
> would love to pick your brain about how you have made it work for you
> in Humboldt.
Kate, I have some 1099 experience but I am not entirely sure it would be
helpful. I wanted to do consulting work for some large firms (Sun, IBM,
etc.) and found that they would not directly hire consultants (or
contractors) directly because of the fairly complicated rules around
whether someone was "really" a contractor as opposed to a stealth
employee w/o benefits. For two or three years I was operating under a
1099 relationship with an intermediate corporation in Florida.
Eventually what I wound up doing was incorporating, as the large
companies had no problem with establishing an agreement with a corporate
entity but would not do that with individuals. So my corporation (an S
corporation) was able to offer my services as a consultant and actually
even helped one or two other consultants in similar situations.
The "corporate veil" meant that the 1099 relationship was between my
company and me (or my company and another consultant) if investigated,
and NOT between my company and IBM (for example), whereas if I had been
directly engaged it would have been, and the burden of showing a
legitimate relationship would have been on them.
The corporate identity, even as an S corp, has also made things like
expense reports and receipts much easier for the prime, which is also
appreciated.
Dave Thewlis
>
> Happy Holidays,
>
> Kate Trower
> 408-470-9428
> kate.trower at yahoo.com
>
> ------------------------------------------------------------------------
>
> _______________________________________________
> List mailing list
> List at redwoodtech.org
> http://redwoodtech.org/mailman/listinfo/list_redwoodtech.org
>
--
*Dave Thewlis, DCTA Inc.*
+1 707 840 9391 (voice) ? +1 707 498 2238 (mobile)
http://www.dcta.com ? dthewlis at dcta.com <mailto:dthewlis at dcta.com>
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