This question comes up to all beginners when starting their service business. How much do I pay my providers? Well, we believe that when starting your business you should automatically go with independent contractors. This is our personal preference because it’s a faster way to get started and you save tons of money by not spending it on things like uniforms, training, supplies etc..
Now that we have decided to go with independent contractors over employees, you will have to structure your company so that they in fact are treated as ICs versus W-2 employees.
To qualify them as independent contractors, we recommend using the Uber like feature that BookingKoala offers. This will give the contractor full control over the jobs they want and do not want. In our industry finding qualified workers is easy and anyone can pick up poop, but for other industries you can look for people who have prior experience.
We will focus on monitoring the contractors once they are added inside our BookingKoala account. Customers can review each provider which will allow us to get feedback on each and every provider. Slowly we will place the highest rated providers to the top of the scheduling priority, meaning that they will get the most jobs automatically. Over time only good providers will be inside the system getting all the jobs.
When hiring our first IC, we will start by testing the pay structure at 50% and adjust as we go.
We don’t know if 50% is going to work out but we know that we have to set the pay percentage at something. Over time we will adjust this amount if necessary. If we deicide to increase the pay we will give everyone a pay increase but if we decide to lower the pay percentage then we will keep existing providers at 50% and hire new providers at the new rate that will be given.
Hope this post helps those struggling with pay percentages and deciding whether to go with an IC or W2 employee.