Myth 4: There’s no difference between employees and contractors.

Co-workers, startup myth there's no difference betweeen contractors and employeesEventually your startup will need to bring on additional help beyond yourself and your co-founders, and many entrepreneurs make the mistake of assuming there’s essentially no difference between employees and contractors. While you may be looking at things from the standpoint of work output, there are some key distinctions that all employers should be aware of before hiring.

Having employees or contractors is not unlike having co-founders – you need to have written agreements that spell out responsibilities and duties. For contractors, you need to make sure the agreement covers ownership rights; specifically, they should state that you own any work created under contract.  This is another area where having a professional review your agreements can be worth the expense, particularly for large purchases like software development or website design. 

Before making any hiring decisions, it’s helpful to speak to an attorney or CPA to get professional advice.e While you may have many talents, employment law may not be one of them. And having iron-clad agreements in place with employees and contractors is an important enough step in your business to invest the time and resources in professional guidance.

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