Club Hound In May Alex Popov asked about organizations of entrepreneurs in the Bay Area (Where Everybody Knows Your Name, [Article link]).
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The Community Entrepreneurs Organization (415-435-4461) is a grass-roots multi-industry networking group that has been around for about nine years and meets in San Rafael on the first Tuesday evening of each month. The Bay Area Entrepreneur Association (415-294-8149) is similar but much newer. And the Chief Executive Officers' Club (212-633-0060), a group for CEOs of companies with sales of at least $2 million, has a San Francisco chapter.
Community Entrepreneurs Organization
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The San Francisco Chamber of Commerce (415-392-4511, ext. 819) sponsors committees for entrepreneurs that help them develop leads, organize seminars, and monitor laws.
David C. Bratt
Chamber of Commerce
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The Executive Committee sponsors 240 presidents' groups in the United States and claims 2,600 members. Presidents meet twice a month, once with the committee chairman, once in a group of 13 to 15. There are 14 such groups in the San Francisco Bay area. Call (619) 563-5875 for information about these groups.
The Executive Committee
San Jose, Calif.
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Pet Peeve Soon Carolyn Moskowitz will need to hire workers for her fast-growing house-and pet-minding service. She can bond them inexpensively if she hires them as employees, but she's worried about all the paperwork that would involve. She would rather hire independent contractors, but bonding them individually could get expensive (Safe Pets, May 1991, [Article link]).
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Ms. Moskowitz should study the IRS's rules regarding classification of independent contractors. If she pays workers by the hour, week, or month, for instance, or if she trains them yet considers them independent contractors, she risks running afoul of the IRS. In addition, I've found that hiring workers as employees fosters good relations between me and my workers, and that helps me build a loyal clientele.
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Not one prospective client has ever declined my services because my employees were not bonded, once I explained my decision. I tell them the people I hire are honest. Bonding agents do not perform character checks. They confirm only that a person is financially able to match the amount of the bond. What the employer pays for is the bondsman's guarantee that if a client sues an employee and wins a court judgment less than or equal to the value of the bond, the bondsman will pay the client immediately and then pursue the employee for the amount later. Be sure to check with a bonding agent near you to make certain this is true in your area.
The Help Place
East Lansing, Mich.
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Ms. Moskowitz should not assume that she can avoid paperwork and taxes by subcontracting. If she tells her workers what to do, where to do it, when it must be done, and in what manner, the IRS will probably consider them employees and could impose stiff penalties for misclassification. The IRS may hold her liable for all unpaid taxes on the reclassified worker and can reclassify all other workers in the same job capacity, introducing a tax burden that might drive Ms. Moskowitz out of business. The IRS can in some cases levy criminal charges. As a paid tax preparer, I have met many disgruntled employees who face large tax burdens because their employers treated them like independent subcontractors rather than employees. In every case, these employees reported their former employers for tax violations. My advice? Hire someone to handle the paperwork, and pay your taxes.