Contractors vs Employees: Does It Even Matter? [7FMS Ep. #53]
by Daniel Patterson
Season 3 of the podcast begins… and in this episode we talk about one of those topics that always seems to be a topic of conversation amongst school owners…
Employees vs contractors!
This is one of those topics that every school owner has to ask at some point in their career…
And, I want to say right from the beginning…
We’re completely avoiding the obvious take on this topic.
Our primary goal isn’t to talk about the IRS rules, what you should do, what to put in your contract, how to handle payroll, whether or not they should sign an NDA or a non-compete… that has been done to death, and – frankly – we have little desire to do it again.
These topics and our answers on them might come up in a tangential way… but it’s not our main purpose.
Rather, we want to explore company culture, teacher retention, and student retention through this lens…
And examine why the tactical questions often get in the way of asking deeper questions that could benefit a school owner’s greater mission and purpose… as well as their bottom line!
Here’s what we cover in the episode:
- What we’re NOT going to talk about (we’re skipping the usual boring stuff)
- Does this question even matter?!?! (HINT: Yes, but not for the reasons you are usually told)
- Going deeper on the questions you ask before you shift the employment structure of your studio
- Are employees naturally more invested in the business than contractors?
- How contract work can provide a more flexible business model if your business structure allows it
- Is there actually a cost difference between employees and contractors?
- Highlighting the burdens of being a contractor… and how to address them with your workers
- Highlighting the burdens of being a W2 employee… and the good news about all of this
- How to predict which students will stay and which will quit every year
- Nate describes our job as founders – building a community of great teachers
- You don’t have a business unless it’s predictable
- Closing thoughts: The value of building a team that stays around for years
We’re so excited to be back for season 3 of the podcast!
What topic would you like us to cover in the upcoming episodes?
We won’t know unless you reach out and tell us!
You can do so by contacting us here.
- Listen Now on Apple | Spotify
- Download
- All Episodes
- << Leave a Review >>
Latest posts by Daniel Patterson (see all)
- Coaching Your Students to Success (w. Mike Grande) [7FMS Ep. #90] - September 20, 2023
- What’s Most Urgent in Your Music School? (w. Kyrsten R.) [7FMS Ep. #89] - September 13, 2023
- Health and Wellness as a Music School Owner [7FMS Ep. #88] - September 6, 2023
How Do You Want to Grow Your Studio?
Get More Students
Bring in $1000s in new revenue with a studio funnel
Begin Group Lessons
Start a high-quality group program that parents say “Yes!” to
Free Up Time
Scale your studio, make more, and in less time
comment
2 Comments
I have never in three decades had any issues with the commitment of contractors in this setting. They make more money, They pay less taxes, I make more money, I pay fewer taxes, and I can keep my prices down and still use the most talented instructors in the area.
I think the “building culture” area is more of a straw man than anything else. If you employ the correct contractors, there is NO issue. If you hire the correct employees, there is NO issue. If you employ the wrong contractors, you WILL have issues. At the same time, if you hire the wrong employees, you also WILL have issues.
I have had two teachers leave in the last 8 years. One moved out of town and one decided to pursue another career. I also have an average student retention rate of just over 63 months.
Teams can be employees, but teams can also be contractors.
James, that’s good! It sounds like you haven’t had an issue… but that is not the case for hundreds and hundreds of music school owners that we’ve talked to.
And, I would make the argument that what you see as “hiring the correct employees” is actually not what’s happening.
YOU have a culture that you’ve built, and it includes your job descriptions, your hiring funnel, how your school presents itself, even how you present yourself.
Bad culture can turn an “A” player into a “B” or “C” player. Good culture can take a “C” player and turn them into a “B.”
I will also point out that the main conclusion in your comment is actually the same as our main conclusion in the podcast… so I actually think we agree!