Independent Contractor vs Employee - Need some advice
Hi everyone! Need some advice. My employer is talking about having us go to independent contractors instead of employees. This isn't something I have any experience with so I would love some input on the pros/cons of both. I'm currently an employee. Being an IC would mean I would be responsible for all my own equipment, products, supplies, business cards, brochures, marketing, etc. We are currently on a flat fee per service pay scale now (anywhere from 20-35%) and would move to possible 65-70% as an IC, but obviously have to supply everything. I do like being more in control of what products I can use, what services I offer, etc. Not so sure about having to worry about bringing sheets and towels and doing all the laundry at home. I'd love some advice, experiences others have had, etc. I have to make a decision by the end of next week.
I have already called the skin care line I want to transition to, and there is no minimum order, so that would help make it easier to get stocked.
Thanks!
Views: 436
Replies to This Discussion
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Permalink Reply by Jacque O on
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I would be leary of converting to an Independent Contractor. A major question for the owner would be who takes the cut when specials are run on pricing. You may need to sign a contract but what agreements is your owner signign to? There are also complications with taxes if you are used to filing as an employee, however options for write-offs are far greater.
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Permalink Reply by Jodi on
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Thanks for the advice. Appreciate it. I've been thinking long and hard about it all day.
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Permalink Reply by Cindy Greenwood on
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I think it's a great transition to owning your own business.
Personally I like being in control of what I use and how I do my treatments.
Your flat fee sounds like it was pretty low, so why don't you run the numbers and see what your income might be, based on what you did last year.
Do you already have some of your own equipment?
I was buying things before I was even out of school (mag lamp, steamer, wax pot, etc).
If not - put together a list of what you will need and how much it will cost. You don't have to get everything at once - you'd be surprised how how little you can get by on.
Your pricing - including specials - is all your decision.
If the numbers make sense, why not?
You need to be a lot more organized with your record keeping...but again, good experience!
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Thanks everyone. I'm considering trying it for the 1st quarter and see how it goes. I think the equipment we have there is staying, just would need to replace if something breaks. I'm not sure about the sheets/towels. She said she is getting rid of the washer/dryer in January, which kinda irritates me. I really do not feel like having to lug laundry back and forth. I will be transitioning to a new skin care line, the one I prefer and I think my clients will love the changes they see in their skin. I'm guessing we will now have to pay 100% of the credit card fees, I believe now we pay half of those (I know she takes money out of cc tips). I would like the freedom to do what I choose, but the record keeping will be tough until I get used to it.
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Permalink Reply by Denise Ivers on
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Hi Jodi
I'm an IC and pay a monthly rent. Equipment and products, marketing etc... all mine and my responsibility.
I agree with Cindy this could be a good transition to owning your own businss but only if your contract is set up so that you don't lose in the end.
What about paying a monthly rent? Is this an option with this owner? This way you don't have to worry about keeping track of clients seen, her income/your income, specials, etc..... Yes you will have start up costs by providing your own equipment and products but it will truly be YOUR business. Do your numbers to see how much the 30-35% this commission split would actually be in dollars and consider negotiating a monthly rent. What concerns me about this type of agreement/contract is most that are set up this way disallow you from taking "your" clients with you when you move on. This is very important to consider. If she doesn't allow you to keep your clients then I would walk away from this situation.
Doing laundry and towels is not such a big deal. I got used to it!! Consider using Square for credit card processing. It's easy and they deposit in your bank account the next day. Their take: 2.75%. Keeping the clients you already have and growing your business in the right direction is key to long term success. Let us know what you decide.
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Hi Denise, I'm in PA and rental is not legal for Estheticians, so that is not an option. I'm really torn and a little scared, considering she told us at the meeting yesterday..."I have nothing to lose if I shut this down tomorrow." She has lost interest in the spa industry. Again, not very comforting. I'm only part time, I have a full time job with a regular paycheck, but I still don't want to invest in products only to have no where to use them be a possibility. Oh and even with this possible 70% commission to be an IC, we have to buy our own brochures, business cards, etc. We won't have a receptionist anymore, so she expects us to be there anytime we are on the schedule to answer phones, make appointments, sell giftcards, etc. I'm not sure that can be enforced, since there will be no pay if not doing services. I have no problem answering phones and making appointments for myself and my business, but none of us seemed happy about working for free to schedule appointments for each other...maybe I'm being petty, I'm not sure. I just want a nice place to work where I'm treated fairly and I haven't felt that for a while now.
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I put my own phone number on all my marketing material when I opened at my new place.
I got my biz cards at Vistaprint but I am printing up my own brochures with paper from paperdirect.com
Plus I have my own on-line booking page AND process all of my own payments...using square for credit cards. I also sell my own gift certificates...I had some gorgeous ones made up at zazzle.com but I can print my own if I want.
These are all business expenses that you need to keep records on - you don't pay taxes on biz expenses...which include treatment products, linens, cost of laundry etc. I don't have a real accountant, but my girl at H&R block does a great job with getting all of my deductions in.
I keep all of my client contact info...phone, email, addresses.
I really got burned by NOT handling all of this in my last situation. I lost tons of gift certificate sales and client info.
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Permalink Reply by Cora Ariella on
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Hi Cindy, I am very interested to know where do you print your own brochures and gift cards. Just got my vistaprint order in and I'm very happy with the new bcards but not sure it's worth doing the rest with them. Hope you can reply to this, and I will also check the 2 websites you mentioned. Cora
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Cora - I get the paper from PaperDirect.com for brochures. Because you can print just a few brochures at a time when you do it yourself, you can change up your menu easily. I do it all on my own printer.
You can print your own posters, postcards and flyers too...with any blank, colored, or bordered papers.
I have used some templates from both avery.com and microsoft.
But I actually prefer my biz cards from Vistaprint - pay the extra and get the glossy finish, it looks much better. I also ordered my postcards from them...they do a great job and the cost is very low.
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Permalink Reply by Claire Barnes on
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@Jodi this comment you made (pasted).... We won't have a receptionist anymore, so she expects us to be there anytime we are on the schedule to answer phones, make appointments, sell giftcards, etc. I'm not sure that can be enforced, since there will be no pay if not doing services. I have no problem answering phones and making appointments for myself and my business, but none of us seemed happy about working for free to schedule appointments for each other...maybe I'm being petty, I'm not sure. I just want a nice place to work where I'm treated fairly and I haven't felt that for a while now. Is what got my attention. When you are an IC nobody can dictate to you what you do or when you do it. If you decided not to go into work for 3 days it is nobody's business. They cannot dicatate that between these hours you have to be at work doing certain tasks. That is the luxury of an IC...you don't have anybody telling you what to do. BUT it is a grey area in this industry and a lot of spa owners will try and push the envelope. Be careful Jodi.
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