3 ms·
I think the upside is mostly to do with doing projects for clients who aren't themselves in the tech industry and who don't really care how their projects are i
by stakhanov 7y ago
I think the upside is mostly to do with doing projects for clients who aren't themselves in the tech industry and who don't really care how their projects are implemented and who implements them.
When doing tech work for tech businesses you will often find that they already operate their own network of tech contractors and membership in such a network basically implies being a lone-wolf freelancer character for a number of reasons (a) They work with people not headcounts. They will do extensive individual vetting to decide who they work with, and after deciding they want to work with you won't allow you to switch yourself out for another personnel resource. (b) They will want to keep each individual contractor's bargaining power in check, so even when they need more than one headcount, they might think twice about picking up a headcount greater than one from something that's already self-organizing as a business entity of some kind.
Also, I feel quite strongly that if, in practice, there is a client relationship that you have 100% ownership of, then you want to make sure that this is also the case on paper, rather than having an indirection where you are 1% of some coop and 1% of that coop's revenue happens to be your client. -- And much of the upside described here can also be realized through a consortium of sole traderships (or otherwise 1-person businesses), rather than through a coop.
- zonidjan 7y agoYeah, I would think the biggest benefit here would be insurance/benefits (and possibly taxation) related, which doesn't seem to be mentioned at all.
- stakhanov 7y agoIf you want to be taxed and treated for insurance purposes like an employee, you can always incorporate as a sole-person Inc or Ltd or GmbH and hire yourself as the sole employee. Granted: There are some overheads having to do with annual accounts etc where it would be beneficial if those overheads could be distributed over more than one employee, but the more you earn the less that will matter in proportion to your earnings. But, on the whole, you will have more opportunities at saving on taxes as a business than as an employee and more opportunities to "slip through the cracks" of the system when your business is so small that the tax authorities can't be bothered paying as close attention to it as they otherwise would.
- servercobra 7y agoThere’s definitely some overhead but it’s not terrible. I actually have a startup called Hyke setup and manage mine for a decent monthly fee. My company is a single member LLC which employs me for a “reasonable” salary and then I take the extra profit as a distribution. One huge benefit is the distribution is only taxed at the employee side of FICA taxes (whereas I pay my half and my company pays the same on salary, same as a freelancer normally pays both sides) saving me a decently large amount of money. It more than covers what I pay Hyke and extra fees, even without getting into healthcare or anything.
- deleted 7y ago[deleted]
- em-bee 7y agothat sounds like a downside of doing work for tech companies. i would certainly not want to be beholden to the whims you mentioned here. besides in some countries, not being able to switch out myself is part of the definition of employment. what you describe here looks less like freelance consulting but more like staff augmentation for which large businesses exist. i prefer to work on solutions, and neither people nor headcounts should matter.