When you are running a small business, it is always suggested to consult an attorney or tax professional before hiring any contractor or employee. This helps in finding out what is right for you and your business. You should always use contract labor instead of an employee, to outweigh the risks in the business.

If you adopt the idea f a multi location business, your competitors would gladly work with you as well as give up some of their profits. It is seen that clients like to work and let other manage their business. This is because most of the small business owners start their business by leaving their current boss. They are skilled at the work and this helps in gaining the trust of customers.

There are two reasons why an entrepreneur or small business owner doesn’t use contract labor:

•    The primary reason for this is that they simply don’t think about contract labor as an available option. Most business owners have worked as employee in other companies. So, they think that hiring employees is a part of the business. They don’t know that many business owners have managed to run enterprises at different locations by using contractors.

•    The second reason is that small business owners think that by owning a contractor, they will loose the control of the task. You might loose the control over the work performed, but you can not lose control over the final result. As a business owner, you should be more concerned about end results and profit you are getting from it.


We don’t know that by losing a little control and by using a contractor, we will gain much more. The contractor always charge for the results he delivers, but employees sell your time for the salary regardless of results. Contractor is himself responsible for all the time and taxes, while you are responsible for both these in case of hiring employees.

You will have to obey different government regulations by hiring an employee, whereas in case of contractor, the obligations are less.