Tue, 30 Apr 2024 16:50:46 -0700WeeblyTue, 01 Dec 2020 08:00:00 GMThttp://theericssonlawfirm.com/law-blog/employeesub-contractorentrepreneur_ Let's agree on one thing straight away. During this time of economic uncertainty and transition...people are feeling stressed not because there is an insufficient supply of work. People are stressed because the supply of work does not have an equal supply of revenue. After all, most of us have a ready supply of household projects that would provide an unlimited supply of work. What people truly need is a consistent revenue stream.

The good news is, there are all sorts of new opportunities for individuals willing to look at their skill-sets outside of the box they once came in.

Companies often describe lay-offs as the removal of unnecessary jobs, but this is an incomplete description. The truth is, most companies still need the services provided by those who they lay-off. What motivates most companies (if not all of them) to lay-off employees is the cost of keeping them. It may be true that in some cases greed is the motivation behind the motivation, but the vast majority of the time it is nothing more than simple math.

Unfortunately for the companies, each person they lay-off takes with them some institutional knowledge and training. This may be bad for the company, but it is great for the employee.

Starting a small business is not without risk, but for those who are unemployed or under-employed, that risk may be worth taking.

The questions you must ask yourself are:

(1) What skills do I possess? [What did you do for your previous employer? What skills did you bring to your previous employer?]

(2) What is the value of those skills? [Your cost to a company is typically 1.5 to 2.5 times your salary (as a basic measurement). Which means your straight hourly rate is a good starting point. Naturally, this number may be too low for some companies and too high for others. There are internet resources for nearly every industry and lots of blogs where information can be found to determine a true market rate for your skill-set.]

(3) Are my skills generalizable to other companies? [As a sub-contractor you want the freedom to work for other companies.]

Once you determine your service sector and market value, it's time to determine which type of entity you should form (limited liability company, corporation, sole proprietorship, etc.) This should be a decision made in consultation with your attorney and your accountant.

So what stops most people from taking this leap of faith? Is it fear? A lack of information? A lack of faith in one's abilities?

Share your insights...]]>