By Elena Stewart
In the last decade, advances in technology and the advent of remote working have allowed business owners to build teams using talent from all over the world. If you’re hoping to make use of freelancers to boost your business prospects, it’s important to set off with the right know-how. Here are a few key tips to consider.
Scouting
In recent years, there have been huge advances in the way we connect and hire freelance professionals – these developments have culminated in platforms such as Fiverr, UpWork, FlexJobs, and more. Outsourcing marketplaces make for a cheap, quick (and sometimes viable) means by which to recruit experts, but there are drawbacks – these sites tend to attract entry-level talent, and there is a lower chance of high-quality work. If you want a more reliable (albeit expensive) alternative, carry out manual research, look at portfolios, get experience, and reach out to individuals via Linkedin or their business sites.
Collaboration
Once you’ve found individuals who you are confident can deliver quality results, the next step is to develop cohesion within the team. You can start by downloading project management software – with the right program, you’ll have transparency over deadlines, Objectives & Key Results (OKRs), task allocation, and more. Although tech provides an important crutch, it’s also important not to neglect the human element – regular team meetings and video calls help to maintain cohesion.
You should also take the time to develop some logistical processes that simplify your operation. It’s common, for example, to experience an overflow of documents – keeping track of so many files in a number of formats can be confusing. A PDF merging tool can help with this by collating everything into a single file. This may help you combine PDF files, so you can move the pages around to get content in the correct order.
Admin & pay
Registering and paying freelancers is not always straightforward, so it’s important to understand this process from top to bottom before you employ anyone.
-Taxes: Your first step is to collect the correct tax documents for the IRS and ensure compliance from anyone you hire – your freelancers are 1099 independent contractors, and you must follow the prescribed rules. Ideally, your freelancers will provide a Taxpayer Identification Number (TIN) – if they do not, your business must deduct backup withholding from their earnings. Failure to pay this will make you liable for your freelancers’ uncollected taxes.
-W-9 forms: A W-9 form is an essential tax document required by the IRS to accurately estimate taxes owed by contract workers per tax year. You must request this from freelancers you pay as well as an agreement with freelancers that you won’t withhold income tax from their pay.
–Form 1099-NEC: If you’ve paid more than $600 to a freelancer throughout the financial year, you are required to complete and file Form 1099-NEC – this means collecting the required information about the contractor through Form W-9, filling out Copy A and Copy B, then sending these to the IRS and the contractor respectively.
-Payment methods: There are multiple ways to pay your freelancers, both domestic and international – Paypal & Venmo, for example. Make sure to compare rates at the time of hiring to decide which will save you the most money.
-Limited liability company (LLC): Forming an LLC can have several benefits when you’re managing freelancers – doing so will reduce your personal liability, lessen your paperwork quantities and provide key tax advantages. You can save on lawyer fees by using a formation service, and you can also hire a service to act as your registered agent. Just be certain to read reviews for best registered agent services beforehand to determine which service can reliably help you.
Embrace the gig economy
The gig economy is well and truly underway. Whether you’re looking for short-term help or a long-term arrangement, it’s easier than ever to find, hire and succeed with freelance professionals. Just be sure that you know which forms are necessary to keep things by the books, including filing as an LLC. You’ll find that a freelance team has plenty of benefits for everyone involved.
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Elena Stewart is a certified life coach who specializes in the teachings of Brené Brown, Danielle LaPorte, and Marie Forleo. She successfully transitioned from the corporate world to running her own business, and she now helps others achieve their career goals and dreams.
