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Percipient
05-31-2011, 02:47 PM
There is a niche market that I believe has an opportunity for offering a small online service where I would connect users to other people who can help them solve common problems, I would plan to charge people essentially by the minute and to pay employees for communicating with the users and helping them to solve those problems, however I don't want full time employees, and think this is the kind of service where employees would work from home and be paid based on how much they work.

I have developed the service online and have a payment system set up, however, I hit kind of a brick wall in figuring out how to pay the employees who will be helping out the users.

Can anyone give me some advice on what is required to set up a system where employees could join the company, work as much or as little as they want, and be paid based on how many problems they solve? I was supposing they would be hired as some kind of contractor, but Google searches haven't gotten me the information I was looking for, so I thought the experts in this forum might have some advice for me.

What forms might these kinds of employees be required sign? What kind of taxes would I be required to pay for contracted employees pay? Can anyone give me some hints or offer a link to get this kind of information? Any help or direction would be much appreciated :).

Thanks,

--Anthony

tylerhutchinson
05-31-2011, 04:40 PM
Hey there,
I can give you a few suggestions. Before I can give you the BEST advice I would need to learn exactly what your company offers and does. Is it similar to SMS answering companies? This is when you text a question to a number and then you get an answer back? Or online question submission? Something along those lines?

I would think commission based work is the way to go. Have you ever heard of the company Cha Cha? It is similar to what I subscribed below. ANYONE can work for them. You have to take a test and pass. Then learn their system (all done online through video). Once they feel your trained you can start working for them. It is 100% online. They pay you based on your position and the volume of questions you answer. So starting level is your basic questions. So if you text the number Who won todays baseball game? one of these reps would answer it. Cha Cha then pays them a set % (starting is something like 7 cents per answer). If they do not know they then forward it to a hgher level. They answer and they get paid slightly higher since they handle more complex questions. Cha Cha has been successful in expanding and now answer millions of texts per month. All by people who are commission based online.

If your company is anything like this where you can apply a commission based rate and they get paid strictly off their actual work, then this is the way you would go. That way you are only paying them for work volume (a % of what the customer pays) and it will ensure you do not build debt off your employees. Say you charge $1.00 per service, you can pay the employee a set % of that service. No customers, no payment since they are not doing work. There are many companies that do this, Cha Cha I think has one of the best business models of this. I have helped design this model with an online client before and they got similar expansion and results as well applying a similar model.

If you go this route you will have to build a tracking system for business, payment, and who the employee was that helped. Making a database that tracks this saves you time, as well as ensures you are not over paying employees.

Again, I would have to hear more on your company model to truly give you the best advice, but generally for work at home services this is the best model to follow.

Percipient
05-31-2011, 05:12 PM
Hey there,
I can give you a few suggestions. Before I can give you the BEST advice I would need to learn exactly what your company offers and does. Is it similar to SMS answering companies? This is when you text a question to a number and then you get an answer back? Or online question submission? Something along those lines?

I would think commission based work is the way to go. Have you ever heard of the company Cha Cha? It is similar to what I subscribed below. ANYONE can work for them. You have to take a test and pass. Then learn their system (all done online through video). Once they feel your trained you can start working for them. It is 100% online. They pay you based on your position and the volume of questions you answer. So starting level is your basic questions. So if you text the number Who won todays baseball game? one of these reps would answer it. Cha Cha then pays them a set % (starting is something like 7 cents per answer). If they do not know they then forward it to a hgher level. They answer and they get paid slightly higher since they handle more complex questions. Cha Cha has been successful in expanding and now answer millions of texts per month. All by people who are commission based online.

If your company is anything like this where you can apply a commission based rate and they get paid strictly off their actual work, then this is the way you would go. That way you are only paying them for work volume (a % of what the customer pays) and it will ensure you do not build debt off your employees. Say you charge $1.00 per service, you can pay the employee a set % of that service. No customers, no payment since they are not doing work. There are many companies that do this, Cha Cha I think has one of the best business models of this. I have helped design this model with an online client before and they got similar expansion and results as well applying a similar model.

If you go this route you will have to build a tracking system for business, payment, and who the employee was that helped. Making a database that tracks this saves you time, as well as ensures you are not over paying employees.

Again, I would have to hear more on your company model to truly give you the best advice, but generally for work at home services this is the best model to follow.

Tyler,

Thanks for the quick and thoughtful response - yes the service is very similar to the ChaCha business model you mentioned - I've used ChaCha before and would love to find out more information about what is legally required for them to hire and pay their employees. The only difference is I plan to pay them per minute of chat, instead of per question answered. I have created a website that handles the tracking you mentioned, so that part is pretty much taken care of.

Where I am stuck now is figuring out the details of how to pay employees, like where to find the forms that would need to be sent to them (hopefully, all employees could be employed, work, and send in documents entirely online like ChaCha) and how to figure out how much pay should be taken away in taxes, or other details like this. This is the first time I have taken on employees for a venture so I don't want to miss any important details that could get the business in trouble later. Is there any resource you might be able to point me to that could get me more information about this kind of thing?

I appreciate your response so, thanks again.

tylerhutchinson
05-31-2011, 07:24 PM
Do you have your federal tax ID set up?

All you would need to do is set up a form that explains how the wage is set up. Make sure it is set up to explain it all in detail. This is something you may want to discuss with a lawyer once drafted to make sure you do not miss anything. Once they sign that you will want them to fill out a W4 with your company. This is how the taxes are taken out and determined.

Once both of those are signed (and you can create both to be electronic filled out and signed online) I believe you should be good to go. If you are not sure how to create the documents, Microsoft Word may have a template you can adjust for your company. Also try other sites such as legalzoom, or Google "free business forms". That is how I get a lot of templates that I am too lazy to design myself.

Before you actually role this all out you should speak with a lawyer to make sure there is no other items or things you missed. This may cost a little bit, but should prevent any employment laws to be broken or lawsuits.

Good luck. Let me know if that explains it!