Find out what business expert Gene Marks has to say on the topic of outsourcing.
Video Transcript
My views on outsourcing are exactly the same as my views on delegating. And I, I – my outsourcing opinions are a little bit skewed because my company is, we’re outsourced. I mean, we, we install, ah, software, you know, accounting software and customer relationship management software – the software that we sell can be implemented internally by – it’s not, again, it’s not rocket science. People can, can do this. But they outsource that work to us most of the time. They outsource the training and the configuration and the whatever. So I like outsourcing. I think that’s exactly what a lot of companies should be doing. People get into the issue is, ah, you know, what tasks should you outsource, what tasks should you not outsource – that depends on the structure of your company. But nowadays, in this world, where bringing on an employee is, is an expense, and there are costs for, you know, benefits and healthcare and bonuses – there’s a lot of, you know, you know, labor laws and regulations and things all around that, um, a lot of business owners think twice before they hire that employee, and they think to themselves, can we, you know, can I get, you know, better mileage out of just outsourcing somebody. The biggest issue with outsourcing that any business owner has to be aware of is, is the tax man. The IRS looks very, very closely at companies that hire contractors, or outsource work to, to either individuals or even small companies that do the work on their behalf. The IRS has specific rules and I’m a CPA so I know this. There’s specific rules about, you know, who’s a 1099 employee, and who’s an employee of your company and you have to be very, very careful when you’re outsourcing work to contractors that you abide by those rules. If not you could be subject to penalties and, and other problems from the IRS.
