Medical Sales : Independent Contractor (1099)or Employee(W-2)? The Pros and Cons
1099 Independent Contractor or Employee with all the "benefits"?
What is the best choice today for Medical Sales? The landscape is changing quickly in Medical Sales. Big Corporate jobs are not as secure as they used to be. On one hand, being an employee with an expense account and company car may give you a sense of stabilty. However, as Independent Contractor, you will have more freedom, less micro management (which we all hate) and higher income potential with multiple products to increase your overall stability.
Stability
Let's take a look at stabilty. Is there really more stability as a W-2 employee as some might think? After all, its a billion dollar comapny. You get a car allowance, expense account, and medical benefits. Trust me, I understand how important medical benfits can be. However, I think we all know stability with big companies is gone for the most part. We all know someone who has lost their job or was "let go', although they were very successful, and had met sales goals and expectaions for years on end with their wonderful employer. Is that stability? Not in my opinion, and Cobra Program for Medical Insurance is really not a great option..mine was $1900 a month!
Manager or Micro Manager?
As an employee, you typically have a manager that you report to about sales activities and progress. I am sure someine reading this blog just thought about a crappy manager that required tedious reports, and brought no value to you to increase sales. I know my last manager fit that description, and brought zero value when he came for monthly and quarterly visits. It is a common saying that a manager can make you or break you. Does that hit home to you? That expense account is not worth a whole lot when you dont have a job anyomore is it? The fact is, as a W-2 employee, you are not only paying your manager's high salary, but your sales and hard work are also paying for the salaries of all of the others your manager reports to as well.
So the big question: Why be an indpedendent contractor or 1099 with no guaranteed salary or expense accounts? Why? Because if you work hard and can sell, you control your own destiny! It's that simple. Just think about it. If you are working for a Medical Distributor or a company as in independent contractor, and you are producing sales, they would be crazy to let you go! You are making them money, and they have very little expense compared to a company paying all of your expenses, benefits, etc. You have just created STABILITY for yourself. And even better, as a 1099, you can represent multiple products, and have income streams from each of those products. This creates even MORE STABILITY...Remember the old saying, "Don's put all of your eggs in one basket"? Yes, you can represent multiple products to maximize the relationships you have worked so hard to build. STABILITY.
What happens if Medicare or commercial insurance decides they will not pay for a product you represent? Well, if you are an employee for a big corporation, you better brush up your resume and get your best suit dry cleaned. With reduced sales, sales reps with salaries and expense accounts will be some of the first to get cut. (Yeah, I know, its not your fault the insurance or Medicare coverage changed.) The truth is, you are just a number to a big corporation, and the people at the top, and the stockholders don't really care. Its all about the bottom line.
How about this as an additional incentive to be an Independent Contractor? Have you ever missed an event, your kid's game, a family get together, a vacation, or something else you really wanted to attend because you had to work? What, you don't have enough vacation time? Don't MISS the important things in life! You don't have to worry about being out of vacation time. An Independent Contractor can have this flexibility. Now don't get the wrong idea. You still have to work hard as a 1099. However, you dont have to miss your kid's school awards, games, trips with family or friends and the best thing is when you are working for the right company and Medical Distributor, you take time off when YOU need time off. It is in your contract. In fact, it is also a Law with the IRS as an Independent contractor. Yes, its is the law (click here to read it).. If a Medical Distributor or company wants to control your hours and vacation time, they have to pay employment taxes. Employers who improperly classify employees as independent contractors can end up with substantial tax bills. Additionally, they can face penalties for failing to pay employment taxes and for failing to file required tax forms. So take
that skitrip if you want! You earned it!
So it's up to you. Go for the "Security" of a cororate salary job, and deal with a manager , weekly reports, and the instability of being a "Just a Number" in a big company, or choose to be your own boss, choose your own products, and control your schedule and your destiny by being a 1099 Independent Contractor.
COMING SOON in my next blog.... "How to find the right Medical Distributor and the right products as an Independent Contractor."