Mike Andes explains why W2 employees make a business more valuable to buyers than 1099 contractors, even though 1099 is simpler. Buyers see W2 staff as proof the business can scale and run without you. For contractors, tie pay to performance and callbacks instead.
From a legal perspective, is there a reason we can't do 1099? We can do 1099. I think it's just the fact that we do want to sell the business in the future. And I don't know if it will be as valuable if you only have 1099. I look at the scalability. If you have a $2 million business that you want to sell and you have a bunch of W2 employees, great, you'll get some multiple on it. If you have a $20 million business, because now you can attack the entire state or the entire country with subcontractors, then it becomes you are a sales machine. The thing that you've actually tapped into is get the certificate licenses for short term rentals and then you create a sales process and a sales system to just get tons of customers. And then you create on the operations side and admin side systems in place to manage all of them, make sure people are doing a good job. That's the business model. Like if the business model is we hire people to clean other houses, that's a commodity. I think, like from a 1099 perspective or W2, we can build the compensation model in a way. It's like if you don't hit these certain benchmarks, you don't get paid. And if it's 1099, it's easier because I don't have to worry about overtime and base pay and all this stuff. It's like, hey, this is straight amount. And what I would probably do is do some sort of tiered system of your commission based upon callbacks.
