Transfer from direct employee to independent rep

[Anonymous]

Hello,
I am considering making a transfer within my company from my direct employee status (company car, expense reimbursement, 401k, etc.) to an independent distributor territory. Have any of you made a switch like this? What are things I should prepare for financially and given that living expenses are equal, what would be a safe estimate of income I would need to maintain the same lifestyle?

I appreciate your input!

 

[Anonymous]

With all due respect, this is clearly a question that needs to be addressed by a 2 hour meeting with your Accountant. Make the investment to sit with them and produce all of your sales and expenses for the next 2 years. He or she can tell you by the end of that meeting if the numbers are in your favor or not. Make the investment.

Good luck

 

[Anonymous]

I'd echo the previous poster.

Most times, if the company is encouraging you to go from W2 (salaried) to 1099 (independent) rep, it's for their benefit. But there are some advantages to the 1099 side.

First, you are responsible for your time and effort. No hours or call goals usually will pass tax muster on the 1099 side, especially if you HAD been a W2 employee. Management should not be as "hands on" as with W2.

However, you need to be clear with your now-business partner on the parameters. What, if any, protected territory and/or products will you be responsible for? If the comapny introduces a new product or product line, do you automatically cover the product (or have rights of first refusal)? Under what circumstances can the company end the business relationship? Can you transfer your "business" as an independent rep to another party (with or without the company's approval)? Can you represent other (non-compeititive) products to your customers or in your protected area?

And those probably need to be in writing. And spend a few more bucks with a qualified attorney (probably in business or employment law) before signing.