Are you ready to unravel the complexity of 1099 versus W2 sales positions?
We promise to provide you with a comprehensive understanding of both roles, their perks, and their pitfalls. Join me, Mike O'Kelly, as I break down the intricate world of sales positions, shedding light on the pros and cons of both. We kick off with why W2 positions tend to be more suitable for those new to the field, thanks to the training support and financial security they provide. We also touch on why 1099 sales roles can be an excellent choice for industry veterans seeking supplementary income.
To connect with the show: Subscribe, Download & Share!
Would appreciate a 5-Star Rating if deserved on Spotify & Apple Podcasts!!!
Connect with Mike:
Website: Mike O'Kelly
Mike@survivingoutsidesales.com
LinkedIn: Mike O'Kelly | LinkedIn
IG: Mike O'Kelly - Sales Builder
______________________________________________________________________
If you are in outside sales and have had any of the following:
- New to Outside Sales
- New to an industry, new product, new territory - any type of change
- Experienced, but have lacked training and business development
- Seasoned but feel like you have hit your ceiling and need a reboot
If any of those descriptions sound like you or someone you know,
If you want to have a conversation about:
- Scheduling a strategy call for your next move
- Help building your business or territory
Reach out to me:
Schedule a FREE consultation
or https://www.linkedin.com/in/mike-o-kelly-44ba352b/
mike@survivingoutsidesales.com
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:01):
Welcome to the Surviving Outside Sales podcast.
I'm your host, mike O Kelly.
As I kind of teased yesterday,today's topic is going to be
something that happens a lot.
A lot of talk in the salesworld, sales industry 1099
versus a W2 position.
So I see value in both okay andright off the jump.
(00:24):
I just want to tell you mypersonal belief is, even if you
have a W2 position, you shouldbe having 1099s.
You're working on on the side.
Now I would not do that at thebeginning If you were starting
at your sales career.
If you're starting out with anew company, new product, new
territory, what have you?
If you aren't well established,do not do a 1099, okay.
(00:45):
Put all your energy, all yourfocus, all your skill
development, attention into the1099, okay.
But I do believe that youshould have something that
you're thinking of, maybesomething that's complimentary
things you can sell to the samepeople.
I don't really believe youshould be doing 1099 work during
(01:06):
the day, like you shouldn't gointo an office and sell your W2
position and then all of asudden turn right back around
and sell your 1099.
So I know it's happened before,I've tested it out.
It doesn't really work becausewhat happens is your buyer then
starts getting confused on whatyou're representing.
Okay, so I've done it before.
(01:28):
I've tried.
I said, oh, you know what, I'mcalling on dermatologists.
Maybe I'll pick up adermatology line.
It doesn't work, okay.
But that doesn't mean you can'tdo something else on the side,
like write a book.
You can't do a side hustle, youcan't build up a skill set,
start a podcast.
Really, just 1099 is acommission-only position and
(01:52):
there are some states that makedifferentiations between an
independent contractor and 1099.
Just Google 1099 versusindependent contractor.
There are some nuances.
So 1099 is kind of doing anunpaid job and really with a
1099, it is.
There's a beginning and an endand the true 1099 is really
supposed to be.
(02:12):
You are doing a set job betweenset a timeframe.
So, for instance, for the nextsix months you're doing X, y and
Z and that's your jobdescription.
An independent contractor isjust somebody that's doing work
but they're not getting paid.
There's no beginning, there'sno end.
Really, it's just kind ofthey're there Now each state
(02:33):
there is a little bit of nuancesto just look in your state and
see if you're listening.
We do have people that listenfrom outside of the United
States.
I have no idea what the lawsare around the world.
So just Google your localmunicipality to make sure that
you're on the right track.
But I'll tell you my opinion,you know.
So, like I said, if you'restarting out, do not do a 1099.
(02:57):
Okay, a 1099 is going to be fora veteran, it's going to be for
somebody who has developed askill set and can move very
quickly and has the ability toscale very quickly.
You don't want to start out asa 1099 because you're going to
take some lumps.
So you want the risk and theonus of the pressure to begin on
(03:17):
the employer, the person that'shiring you, because then they
have to have a vested interestin training you.
Okay, and that's one of thefirst pros that we're going to
talk about with the W-2s is,with the W-2, you're not having
to pay for everything, sothere's a much lower financial
risk to you.
(03:37):
The risk lies on the companythat's paying you, because
they're basically trading yourfuture earnings for payment
today.
So if you're starting out,always recommend get a W-2 job
and get somebody with goodtraining.
It's also very consistent.
You're going to get paid everytwo weeks or you're going to get
paid once a month or every 15days.
(03:58):
That's very consistent and whatthat does is it allows you to
start to build out how you'regoing to pay your bills, your
mortgage, et cetera, plan fortrips and vacations.
It's also super steady.
There's some comfort knowingthat somebody else is looking
out for you and they want you tosucceed.
There's a belief that whencompanies hire you, they're just
(04:19):
looking to fire you and they'remicromanaging you and oh,
they're just trying to document.
No, they have invested a lot ofmoney.
In fact, the average salesprofessional, the investment a
company makes is about $15,000to hire you.
So they've already sunk 15grand into you on average before
(04:40):
you even walk out into thefield and sell.
So just realize that they'veinvested in you.
That means they're invested inyour success.
They need to recoup that moneyor it's a loss and it's going to
make them look bad.
So that's one of the benefitsof the W2.
It's also, you know, w2, thecompany's got money, they have
(05:01):
resources, there's probably sometrack record, there's some
stability behind the company andyou know, like I said, w2 is a
great for certain types ofpeople.
You know, when you're beginningin the sales industry, 100% the
cons of W2 is once you get to acertain age.
(05:25):
You will always answer to yourbosses and your boss's bosses.
Every boss has a boss, okay,even the owner of the company
has a spouse, all right.
Even the owner of the companymight have investors, a board of
directors, somebody that theyhave to answer to, all right, so
(05:47):
they have got bosses.
Which means that if the numbersaren't looking good, shit rolls
downhill and the sales reps arealways the ones that collect
the crap.
You don't get a lot of time offin the beginning.
I mean I remember at Enterpriseshoot, I think I got like six
PTO days for my first year and Ihad to earn those.
(06:08):
So I don't think I had a PTOday for the first, like six
months, which is fine.
Look, you're young, you'reaggressive, you want to go out
there, you want to learn.
You don't need time off.
Physically you can do it, youknow, but it's restricted, you
know you get your time off.
That's not the same when youare working for yourself, but
(06:32):
we'll talk about that in asecond.
There's not a lot of careerprogression training.
You know they're not gonnatrain you.
Most companies aren't gonnatrain you in the sales world to
go work for someone else, and Ido believe that is a big flaw in
the industry.
Companies on average only spendabout $2,000 on training and
(06:57):
they're not investing enough intheir people.
Usually that training is justto get them out the door and to
sell, and then they hand offthat training to the district
managers or the regionalmanagers, which it's too big of
a job.
There needs to be more thanjust that.
You're gonna have capped incomepotential, as I mentioned I
don't know if it was today or ifI mentioned on the podcast
(07:18):
episode yesterday there aregoing to be capped income
potential because they're tryingto recoup future.
They're recouping money in thefuture for money they paid out
to you today.
Like I said, right when youstart your first day, they're
already in the whole 15 grand.
That's what it costs to investto hire you through the hiring
(07:40):
process.
Possibly recruiters get you upand running, get your territory
going 15 grand.
They need to recoup that pluswhatever you are costing them.
And just remember what you'recosting them is not just the
money that you're making.
There's also support staff.
There's also things going on inthe background that you have to
(08:03):
be aware of.
So I've heard it anywhere fromtwo to four X.
Whatever your salary is, that'syour true cost to a company.
So if you make $100,000 a yearto your company, it's upwards of
about 400,000 that you cost thecompany in potential earnings,
(08:26):
overhead support, staff training, supplies, et cetera.
The amount of effort that goesin at W2 companies is
substantial and you have tounderstand that.
And companies aren't perfect.
They're not gonna be able toprovide everything and they're
doing their best, okay, but youhave to realize that going in,
(08:49):
besides that, there's gonna bethe cons of the W2, there's
gonna be micromanagement fromabove.
As I mentioned before,everybody's got bosses, so
Everybody above you isn'tdirectly selling.
Think about that.
Everybody above you is notdirectly selling.
Now there might be things likenational accounts or you might
have some executives that havethey know hospital owners and
(09:14):
they know business owners, butfor the most part the boots on
the ground are the sales repsand so if you're not getting it
done, they're going to be on youto get it done and they want
100%.
The cons of a W2 is they want100% of your effort, your energy
and your time.
Okay, and I believe that youowe it to them to do that.
(09:36):
Now.
I don't think that they shouldlimit you from doing a 1099 on
your personal time.
Your personal time is when youare not engaged with that
organization.
So nights, weekends, if youtake a PTO day, you can do
whatever you want with that PTOday.
(09:57):
It does not matter what you do.
So that's a con is that theyview you as property.
Really, they view you asproperty and they've invested in
you, so you're a stock, you'rea stock and they're either going
to sell you or they're going tobuy more of you.
Okay, this activitiesunfortunately get prioritized
(10:20):
over productive, protectiveExcuse me Ah, I got tongue tied
Productivity, okay, and I'm allabout productivity, not activity
.
And that's why it pains mesometimes when companies, when
they don't hit the sales numbers, the first thing they say is
let's up the calls, let's domore dials, let's pound the
pavement more, let's work morehours, let's require more, as
(10:42):
opposed to looking to ways to bemore productive.
It's just more, more, more, allright.
So those are the pros and consof W2s.
Now we're going to talk aboutthe 1099 pros.
Okay, you don't have a manageror boss looking over your
shoulder.
Now you might have somestipulations of your contract
that you might have some lightactivities, but in most states
it's illegal to mandate what a1099 does so you can't say, oh,
(11:05):
you're doing 1099.
Well, you've got to do X, y andZ or you're not eligible.
Nope, that's not what a 1099 is.
You can't mandate anything.
You can give guidelines, youcan give suggestions, but you
can't link activity to payment.
It's illegal in some states Idon't know about all states, but
states I've lived in and I'veworked in, I've been in 1099 it
(11:27):
is illegal.
You cannot mandate anything.
That is not an employee of you.
Okay, you are having outsidework.
It's like a consultant.
You're giving them a task andthey are working on that task on
their own.
That's how it works.
You can add.
A good good thing is you canadd multiple products and
(11:49):
revenue streams Simultaneously.
In fact, there's a buddy ofmine.
I need to, I really need tohave him on the podcast if
you're listening.
His name is Dalton King.
Let me say buddy.
I mean you know I've workedwith him briefly in the past,
haven't really Haven't reallytalked to him in a couple years,
but I hope he's doing well.
If anybody knows Dalton King, stLouis, missouri, he's the king
(12:09):
of all 1099s that I know.
I'd love to have him on thepodcast.
In fact, I'm gonna reach out tohim and have him on, because I
want him to talk about the whole1099 independent contractor
being your own boss, Because hehas done this and he's lived it
for shoot almost 20 years, sohe's gonna be a great person to
have on.
In fact, I'm gonna start havingon people who are running 1099s
they're doing independent stuffbecause I want you to hear both
(12:32):
sides.
I don't want you just to hearmy opinion.
I want you to hear the opinionof people who are living it as
well and in different types ofindustries and give you some
ideas, because that's reallywhat I want you to do.
I want you to open up your mindto the possibility of 1099 and
W2s.
Again, I'm not anti W2.
It's just everybody's talkingone way W2, w2, w2, 1099s can
(12:55):
make you a lot of money.
So Dalton King, st Louis,missouri anybody knows them have
them, reach out or I'm gonnareach out to him shortly so you
have the freedom and flexibilityas a 1099,.
You know, if you decide you wakeup one morning and you're just
not feeling great, you don'thave to take PTO, you don't have
to count and say, oh crap, do Iuse it today?
Or just go out in the field andmake calls.
If you don't feel great, don'tdo it.
You also can have much betterwork life balance.
(13:17):
I believe that a work lifebalance is work as hard as you
can during business hours andthen, when you're having family
time, Be as present as possibleto be with your family.
That's work life balance.
I don't need to have you know Xamount of hours a week where I
just kind of kick back and dothat.
No, I'm I'm a workaholic.
I love to work, I love to buildthings like that.
(13:39):
But you get that freedom withthe 1099.
When you don't have a boss.
There's nobody over my shoulder, okay, except for me.
There's nobody over my shouldersaying, hey, how many podcast
episodes did you do?
Hey, how many guests have youbooked?
Hey, how many, how manychapters of your course have you
have you completed today?
Okay, nobody's over my shoulderdoing that.
I am doing that myself everyday.
(13:59):
I've got a plan and I'm goingthrough my plan.
I work my plan daily.
That's the freedom andflexibility that I have with
what I'm doing you have.
You only focus on revenuegenerating activity.
You don't have to update CRMnotes.
You don't have to send over BSreports Well, reports that I
think are BS.
You know, you don't have to beon conference calls every week.
(14:22):
That could have been in anemail.
Everybody knows what I'mtalking about.
Almost every conference callfor regional meetings could have
been done in an email.
And really, with the.
One of the last big pros is withthe 1099, you can Control your
destiny.
You control your destiny.
You're gonna rise and fall tothe level of your talents and
(14:45):
your work ethic.
I can live with that, okay.
I can live with that.
1099 cons, okay.
So here's the other side.
I'm telling you the truth.
All right, 1099 cons.
There's no security net.
There's nothing to fall back on, there's no investment.
(15:06):
So either you're working foryourself or you are being paid
by a brand to represent theirproduct.
You are not getting anything upfront.
You don't make money until youmake a sale.
That is tough.
You have to really be mentallytough.
(15:26):
You have to have perseverance.
You have to be physically toughas well.
You have to build almosteverything.
There's not going to be a wholelot of infrastructure for the
most part.
Sometimes there are, and, ifyou like my friend, jennifer
Jones, who runs her businesswith Scout and Seller Wines in
fact, at some point I'm going tobe joining.
(15:49):
My wife and I are going to bejoining Jennifer.
Don't know when that's going tobe.
We both need to have bandwidth,which we don't have right now,
but my wife is very interestedin that.
We tried the coffee and we triedthe wine and both are fantastic
and those are the two thingsthat my wife and I really like
to have.
A good glass or cup of is agood cup of coffee.
(16:11):
It's also clean.
That's not filled with moldlike a lot of the coffees around
the world.
I hate to break it to you.
There's a big brand.
It starts with the star, endswith the bucks.
There's mold in all theircoffee.
I digress, but she I'm going tohave her on the podcast again.
I had her on one time.
Go back to the Jennifer Jonesepisode from, I think, january I
(16:32):
don't remember the specificepisode but go back in January
and listen to her.
I might have her on again andjust strictly talk about 1099s
and the freedom that her lifehas now as opposed to when she
was W2 employee.
You have to build everything,but you have to build your
business and it's lessconsistent.
You're not getting a paycheckevery two weeks unless you sell.
(16:53):
Every two weeks.
You have to go make it happenon your own, and I do think that
some people are better to beemployees and not bosses.
They're better to be employeesand not managers, so it also
comes down to your personality.
I love to build and I love torun things.
I love to create, and so I'mnot necessarily as good as good
(17:19):
of a fit now to be an employee.
Quote unquote.
I like to run my own stuff.
It's okay to be within astructure, like, again I
mentioned, I've got a franchisethat my wife and I bought, but
the franchise is not there onthe day-to-day basis telling me
to open the door, do this, dothat.
It's going to be running.
That franchise is going to bevery similar to when I was
(17:40):
running enterprise stores.
The difference is that, insteadof me getting a small
commission every month from therevenue, I'm going to be getting
a lion's share of it.
So that's the difference.
And so not all W2s are and1099s are created equal.
There are some W2s that aregreat and there are some W2s
(18:02):
that are not.
Again, if you have a W2 job,what I would do is I would look
for W2 jobs where you haveuncapped commission in an
industry where they areconsumable or high ticket.
I sold radiation machines.
Those were high ticket.
You want to sell high ticketbecause you get high commission,
also consumables.
That is one of the reasons whyI wanted to start selling the
(18:24):
post procedure kits to plasticsurgeons, dermatologists.
It was consumable, it was a lowticket item, it was a small
price.
But they were ordering over andover and over and over again.
So I was getting repeatbusiness over and over and over
again.
I was having an opportunity tobuild advocates and indoctrinate
(18:45):
them into the product, into myworld, into my business and have
them help to sell other people,which they did.
So there's a couple ofdifferent things you can look at
.
But you really want to know areyou in a high ticket, high
commission type role whereyou're not going to sell as many
but when you do, the rewardsare huge?
You sell a half a milliondollar radiation machine.
(19:06):
There's going to be a bigcommission.
It's a lot bigger than sellinga bunch of silicone tubes like I
did.
But you just want to kind ofsee what is the opportunity and
really kind of dive deep into itand then think to yourself what
type of sales position do Iwant to have?
Do I want to have a half amillion dollar where I'm selling
(19:28):
five million?
Can I sell five million of whatI'm selling right now?
The answer is no.
Or you have a cap commission.
You might want to look at a1099.
And maybe test it out on theside.
Maybe it's not in the sameindustry, maybe it's different,
maybe it's a passion.
You know there's three thingsthat really help.
I know it's not really on topic, but there's three things that
(19:48):
really help in life.
You need to have a passionabout your work, you need to
have passion about a hobby andyou need to have passion about
your health.
Okay.
So I think if it falls withinone of those three things for
instance, building out therestore hyper-wellnesses that is
about my health.
Okay.
So it's within the world ofwhat I'm trying to build,
(20:11):
because it's within my job, mycareer, it's within a hobby and
it's within my health.
So if you use those threeparameters for finding the right
type of position, opportunitiesare going to start opening up
and you're going to see the pathforward that you need to go.
(20:31):
So thank you so much.
Really, do appreciate it.
If you want to talk about yourrole, your position, you have
questions about W2 and 1089,.
Dm me on LinkedIn and we canhave a conversation about it and
I can do a free consult, maybea position audit, and kind of
give you some ideas about whatyou want to do.
I've done this for dozens ofpeople now almost 26, 27 people
(20:56):
now.
I've done this this year, in2023.
So I'm happy to do so.
I'm going to meet with some ofthe people that are listening to
the show as well.
Reach out to me, dm me onLinkedIn, or you can reach out
to me.
Mike is surviving outside sales.
Either way works.
But thank you so much, reallydo appreciate it.
Hope this was helpful and I'llsee you next time.
Surviving outside sales.
Welcome to the Surviving Outside Sales podcast.
I'm your host, mike O Kelly.
As I kind of teased yesterday,today's topic is going to be
something that happens a lot.
A lot of talk in the salesworld, sales industry 1099
versus a W2 position.
So I see value in both okay andright off the jump.
(00:24):
I just want to tell you mypersonal belief is, even if you
have a W2 position, you shouldbe having 1099s.
You're working on on the side.
Now I would not do that at thebeginning If you were starting
at your sales career.
If you're starting out with anew company, new product, new
territory, what have you?
If you aren't well established,do not do a 1099, okay.
(00:45):
Put all your energy, all yourfocus, all your skill
development, attention into the1099, okay.
But I do believe that youshould have something that
you're thinking of, maybesomething that's complimentary
things you can sell to the samepeople.
I don't really believe youshould be doing 1099 work during
(01:06):
the day, like you shouldn't gointo an office and sell your W2
position and then all of asudden turn right back around
and sell your 1099.
So I know it's happened before,I've tested it out.
It doesn't really work becausewhat happens is your buyer then
starts getting confused on whatyou're representing.
Okay, so I've done it before.
(01:28):
I've tried.
I said, oh, you know what, I'mcalling on dermatologists.
Maybe I'll pick up adermatology line.
It doesn't work, okay.
But that doesn't mean you can'tdo something else on the side,
like write a book.
You can't do a side hustle, youcan't build up a skill set,
start a podcast.
Really, just 1099 is acommission-only position and
(01:52):
there are some states that makedifferentiations between an
independent contractor and 1099.
Just Google 1099 versusindependent contractor.
There are some nuances.
So 1099 is kind of doing anunpaid job and really with a
1099, it is.
There's a beginning and an endand the true 1099 is really
supposed to be.
(02:12):
You are doing a set job betweenset a timeframe.
So, for instance, for the nextsix months you're doing X, y and
Z and that's your jobdescription.
An independent contractor isjust somebody that's doing work
but they're not getting paid.
There's no beginning, there'sno end.
Really, it's just kind ofthey're there Now each state
(02:33):
there is a little bit of nuancesto just look in your state and
see if you're listening.
We do have people that listenfrom outside of the United
States.
I have no idea what the lawsare around the world.
So just Google your localmunicipality to make sure that
you're on the right track.
But I'll tell you my opinion,you know.
So, like I said, if you'restarting out, do not do a 1099.
(02:57):
Okay, a 1099 is going to be fora veteran, it's going to be for
somebody who has developed askill set and can move very
quickly and has the ability toscale very quickly.
You don't want to start out asa 1099 because you're going to
take some lumps.
So you want the risk and theonus of the pressure to begin on
(03:17):
the employer, the person that'shiring you, because then they
have to have a vested interestin training you.
Okay, and that's one of thefirst pros that we're going to
talk about with the W-2s is,with the W-2, you're not having
to pay for everything, sothere's a much lower financial
risk to you.
(03:37):
The risk lies on the companythat's paying you, because
they're basically trading yourfuture earnings for payment
today.
So if you're starting out,always recommend get a W-2 job
and get somebody with goodtraining.
It's also very consistent.
You're going to get paid everytwo weeks or you're going to get
paid once a month or every 15days.
(03:58):
That's very consistent and whatthat does is it allows you to
start to build out how you'regoing to pay your bills, your
mortgage, et cetera, plan fortrips and vacations.
It's also super steady.
There's some comfort knowingthat somebody else is looking
out for you and they want you tosucceed.
There's a belief that whencompanies hire you, they're just
(04:19):
looking to fire you and they'remicromanaging you and oh,
they're just trying to document.
No, they have invested a lot ofmoney.
In fact, the average salesprofessional, the investment a
company makes is about $15,000to hire you.
So they've already sunk 15grand into you on average before
(04:40):
you even walk out into thefield and sell.
So just realize that they'veinvested in you.
That means they're invested inyour success.
They need to recoup that moneyor it's a loss and it's going to
make them look bad.
So that's one of the benefitsof the W2.
It's also, you know, w2, thecompany's got money, they have
(05:01):
resources, there's probably sometrack record, there's some
stability behind the company andyou know, like I said, w2 is a
great for certain types ofpeople.
You know, when you're beginningin the sales industry, 100% the
cons of W2 is once you get to acertain age.
(05:25):
You will always answer to yourbosses and your boss's bosses.
Every boss has a boss, okay,even the owner of the company
has a spouse, all right.
Even the owner of the companymight have investors, a board of
directors, somebody that theyhave to answer to, all right, so
(05:47):
they have got bosses.
Which means that if the numbersaren't looking good, shit rolls
downhill and the sales reps arealways the ones that collect
the crap.
You don't get a lot of time offin the beginning.
I mean I remember at Enterpriseshoot, I think I got like six
PTO days for my first year and Ihad to earn those.
(06:08):
So I don't think I had a PTOday for the first, like six
months, which is fine.
Look, you're young, you'reaggressive, you want to go out
there, you want to learn.
You don't need time off.
Physically you can do it, youknow, but it's restricted, you
know you get your time off.
That's not the same when youare working for yourself, but
(06:32):
we'll talk about that in asecond.
There's not a lot of careerprogression training.
You know they're not gonnatrain you.
Most companies aren't gonnatrain you in the sales world to
go work for someone else, and Ido believe that is a big flaw in
the industry.
Companies on average only spendabout $2,000 on training and
(06:57):
they're not investing enough intheir people.
Usually that training is justto get them out the door and to
sell, and then they hand offthat training to the district
managers or the regionalmanagers, which it's too big of
a job.
There needs to be more thanjust that.
You're gonna have capped incomepotential, as I mentioned I
don't know if it was today or ifI mentioned on the podcast
(07:18):
episode yesterday there aregoing to be capped income
potential because they're tryingto recoup future.
They're recouping money in thefuture for money they paid out
to you today.
Like I said, right when youstart your first day, they're
already in the whole 15 grand.
That's what it costs to investto hire you through the hiring
(07:40):
process.
Possibly recruiters get you upand running, get your territory
going 15 grand.
They need to recoup that pluswhatever you are costing them.
And just remember what you'recosting them is not just the
money that you're making.
There's also support staff.
There's also things going on inthe background that you have to
(08:03):
be aware of.
So I've heard it anywhere fromtwo to four X.
Whatever your salary is, that'syour true cost to a company.
So if you make $100,000 a yearto your company, it's upwards of
about 400,000 that you cost thecompany in potential earnings,
(08:26):
overhead support, staff training, supplies, et cetera.
The amount of effort that goesin at W2 companies is
substantial and you have tounderstand that.
And companies aren't perfect.
They're not gonna be able toprovide everything and they're
doing their best, okay, but youhave to realize that going in,
(08:49):
besides that, there's gonna bethe cons of the W2, there's
gonna be micromanagement fromabove.
As I mentioned before,everybody's got bosses, so
Everybody above you isn'tdirectly selling.
Think about that.
Everybody above you is notdirectly selling.
Now there might be things likenational accounts or you might
have some executives that havethey know hospital owners and
(09:14):
they know business owners, butfor the most part the boots on
the ground are the sales repsand so if you're not getting it
done, they're going to be on youto get it done and they want
100%.
The cons of a W2 is they want100% of your effort, your energy
and your time.
Okay, and I believe that youowe it to them to do that.
(09:36):
Now.
I don't think that they shouldlimit you from doing a 1099 on
your personal time.
Your personal time is when youare not engaged with that
organization.
So nights, weekends, if youtake a PTO day, you can do
whatever you want with that PTOday.
(09:57):
It does not matter what you do.
So that's a con is that theyview you as property.
Really, they view you asproperty and they've invested in
you, so you're a stock, you'rea stock and they're either going
to sell you or they're going tobuy more of you.
Okay, this activitiesunfortunately get prioritized
(10:20):
over productive, protectiveExcuse me Ah, I got tongue tied
Productivity, okay, and I'm allabout productivity, not activity
.
And that's why it pains mesometimes when companies, when
they don't hit the sales numbers, the first thing they say is
let's up the calls, let's domore dials, let's pound the
pavement more, let's work morehours, let's require more, as
(10:42):
opposed to looking to ways to bemore productive.
It's just more, more, more, allright.
So those are the pros and consof W2s.
Now we're going to talk aboutthe 1099 pros.
Okay, you don't have a manageror boss looking over your
shoulder.
Now you might have somestipulations of your contract
that you might have some lightactivities, but in most states
it's illegal to mandate what a1099 does so you can't say, oh,
(11:05):
you're doing 1099.
Well, you've got to do X, y andZ or you're not eligible.
Nope, that's not what a 1099 is.
You can't mandate anything.
You can give guidelines, youcan give suggestions, but you
can't link activity to payment.
It's illegal in some states Idon't know about all states, but
states I've lived in and I'veworked in, I've been in 1099 it
(11:27):
is illegal.
You cannot mandate anything.
That is not an employee of you.
Okay, you are having outsidework.
It's like a consultant.
You're giving them a task andthey are working on that task on
their own.
That's how it works.
You can add.
A good good thing is you canadd multiple products and
(11:49):
revenue streams Simultaneously.
In fact, there's a buddy ofmine.
I need to, I really need tohave him on the podcast if
you're listening.
His name is Dalton King.
Let me say buddy.
I mean you know I've workedwith him briefly in the past,
haven't really Haven't reallytalked to him in a couple years,
but I hope he's doing well.
If anybody knows Dalton King, stLouis, missouri, he's the king
(12:09):
of all 1099s that I know.
I'd love to have him on thepodcast.
In fact, I'm gonna reach out tohim and have him on, because I
want him to talk about the whole1099 independent contractor
being your own boss, Because hehas done this and he's lived it
for shoot almost 20 years, sohe's gonna be a great person to
have on.
In fact, I'm gonna start havingon people who are running 1099s
they're doing independent stuffbecause I want you to hear both
(12:32):
sides.
I don't want you just to hearmy opinion.
I want you to hear the opinionof people who are living it as
well and in different types ofindustries and give you some
ideas, because that's reallywhat I want you to do.
I want you to open up your mindto the possibility of 1099 and
W2s.
Again, I'm not anti W2.
It's just everybody's talkingone way W2, w2, w2, 1099s can
(12:55):
make you a lot of money.
So Dalton King, st Louis,missouri anybody knows them have
them, reach out or I'm gonnareach out to him shortly so you
have the freedom and flexibilityas a 1099,.
You know, if you decide you wakeup one morning and you're just
not feeling great, you don'thave to take PTO, you don't have
to count and say, oh crap, do Iuse it today?
Or just go out in the field andmake calls.
If you don't feel great, don'tdo it.
You also can have much betterwork life balance.
(13:17):
I believe that a work lifebalance is work as hard as you
can during business hours andthen, when you're having family
time, Be as present as possibleto be with your family.
That's work life balance.
I don't need to have you know Xamount of hours a week where I
just kind of kick back and dothat.
No, I'm I'm a workaholic.
I love to work, I love to buildthings like that.
(13:39):
But you get that freedom withthe 1099.
When you don't have a boss.
There's nobody over my shoulder, okay, except for me.
There's nobody over my shouldersaying, hey, how many podcast
episodes did you do?
Hey, how many guests have youbooked?
Hey, how many, how manychapters of your course have you
have you completed today?
Okay, nobody's over my shoulderdoing that.
I am doing that myself everyday.
(13:59):
I've got a plan and I'm goingthrough my plan.
I work my plan daily.
That's the freedom andflexibility that I have with
what I'm doing you have.
You only focus on revenuegenerating activity.
You don't have to update CRMnotes.
You don't have to send over BSreports Well, reports that I
think are BS.
You know, you don't have to beon conference calls every week.
(14:22):
That could have been in anemail.
Everybody knows what I'mtalking about.
Almost every conference callfor regional meetings could have
been done in an email.
And really, with the.
One of the last big pros is withthe 1099, you can Control your
destiny.
You control your destiny.
You're gonna rise and fall tothe level of your talents and
(14:45):
your work ethic.
I can live with that, okay.
I can live with that.
1099 cons, okay.
So here's the other side.
I'm telling you the truth.
All right, 1099 cons.
There's no security net.
There's nothing to fall back on, there's no investment.
(15:06):
So either you're working foryourself or you are being paid
by a brand to represent theirproduct.
You are not getting anything upfront.
You don't make money until youmake a sale.
That is tough.
You have to really be mentallytough.
(15:26):
You have to have perseverance.
You have to be physically toughas well.
You have to build almosteverything.
There's not going to be a wholelot of infrastructure for the
most part.
Sometimes there are, and, ifyou like my friend, jennifer
Jones, who runs her businesswith Scout and Seller Wines in
fact, at some point I'm going tobe joining.
(15:49):
My wife and I are going to bejoining Jennifer.
Don't know when that's going tobe.
We both need to have bandwidth,which we don't have right now,
but my wife is very interestedin that.
We tried the coffee and we triedthe wine and both are fantastic
and those are the two thingsthat my wife and I really like
to have.
A good glass or cup of is agood cup of coffee.
(16:11):
It's also clean.
That's not filled with moldlike a lot of the coffees around
the world.
I hate to break it to you.
There's a big brand.
It starts with the star, endswith the bucks.
There's mold in all theircoffee.
I digress, but she I'm going tohave her on the podcast again.
I had her on one time.
Go back to the Jennifer Jonesepisode from, I think, january I
(16:32):
don't remember the specificepisode but go back in January
and listen to her.
I might have her on again andjust strictly talk about 1099s
and the freedom that her lifehas now as opposed to when she
was W2 employee.
You have to build everything,but you have to build your
business and it's lessconsistent.
You're not getting a paycheckevery two weeks unless you sell.
(16:53):
Every two weeks.
You have to go make it happenon your own, and I do think that
some people are better to beemployees and not bosses.
They're better to be employeesand not managers, so it also
comes down to your personality.
I love to build and I love torun things.
I love to create, and so I'mnot necessarily as good as good
(17:19):
of a fit now to be an employee.
Quote unquote.
I like to run my own stuff.
It's okay to be within astructure, like, again I
mentioned, I've got a franchisethat my wife and I bought, but
the franchise is not there onthe day-to-day basis telling me
to open the door, do this, dothat.
It's going to be running.
That franchise is going to bevery similar to when I was
(17:40):
running enterprise stores.
The difference is that, insteadof me getting a small
commission every month from therevenue, I'm going to be getting
a lion's share of it.
So that's the difference.
And so not all W2s are and1099s are created equal.
There are some W2s that aregreat and there are some W2s
(18:02):
that are not.
Again, if you have a W2 job,what I would do is I would look
for W2 jobs where you haveuncapped commission in an
industry where they areconsumable or high ticket.
I sold radiation machines.
Those were high ticket.
You want to sell high ticketbecause you get high commission,
also consumables.
That is one of the reasons whyI wanted to start selling the
(18:24):
post procedure kits to plasticsurgeons, dermatologists.
It was consumable, it was a lowticket item, it was a small
price.
But they were ordering over andover and over and over again.
So I was getting repeatbusiness over and over and over
again.
I was having an opportunity tobuild advocates and indoctrinate
(18:45):
them into the product, into myworld, into my business and have
them help to sell other people,which they did.
So there's a couple ofdifferent things you can look at
.
But you really want to know areyou in a high ticket, high
commission type role whereyou're not going to sell as many
but when you do, the rewardsare huge?
You sell a half a milliondollar radiation machine.
(19:06):
There's going to be a bigcommission.
It's a lot bigger than sellinga bunch of silicone tubes like I
did.
But you just want to kind ofsee what is the opportunity and
really kind of dive deep into itand then think to yourself what
type of sales position do Iwant to have?
Do I want to have a half amillion dollar where I'm selling
(19:28):
five million?
Can I sell five million of whatI'm selling right now?
The answer is no.
Or you have a cap commission.
You might want to look at a1099.
And maybe test it out on theside.
Maybe it's not in the sameindustry, maybe it's different,
maybe it's a passion.
You know there's three thingsthat really help.
I know it's not really on topic, but there's three things that
(19:48):
really help in life.
You need to have a passionabout your work, you need to
have passion about a hobby andyou need to have passion about
your health.
Okay.
So I think if it falls withinone of those three things for
instance, building out therestore hyper-wellnesses that is
about my health.
Okay.
So it's within the world ofwhat I'm trying to build,
(20:11):
because it's within my job, mycareer, it's within a hobby and
it's within my health.
So if you use those threeparameters for finding the right
type of position, opportunitiesare going to start opening up
and you're going to see the pathforward that you need to go.
(20:31):
So thank you so much.
Really, do appreciate it.
If you want to talk about yourrole, your position, you have
questions about W2 and 1089,.
Dm me on LinkedIn and we canhave a conversation about it and
I can do a free consult, maybea position audit, and kind of
give you some ideas about whatyou want to do.
I've done this for dozens ofpeople now almost 26, 27 people
(20:56):
now.
I've done this this year, in2023.
So I'm happy to do so.
I'm going to meet with some ofthe people that are listening to
the show as well.
Reach out to me, dm me onLinkedIn, or you can reach out
to me.
Mike is surviving outside sales.
Either way works.
But thank you so much, reallydo appreciate it.
Hope this was helpful and I'llsee you next time.
Surviving outside sales.
Popular Podcasts
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com
24/7 News: The Latest
The latest news in 4 minutes updated every hour, every day.
Therapy Gecko
An unlicensed lizard psychologist travels the universe talking to strangers about absolutely nothing. TO CALL THE GECKO: follow me on https://www.twitch.tv/lyleforever to get a notification for when I am taking calls. I am usually live Mondays, Wednesdays, and Fridays but lately a lot of other times too. I am a gecko.