Freelancing can be a very lonely business.
Not just in terms of physical isolation, but also in the way of getting help to run your day-to-day operations.
Most of us don't have staff to take care of business operations and administration. Or a CFO and legal team to deal with finances, payroll and regulatory hassles. Or an IT director to manage our tech infrastructure.
We're expected to do it all. And that can be exhausting!
That's where a company like MBO Partners can help. MBO Partners combines a proprietary system to handle tax, expense, benefit, and payment and contract management for freelancers and independent professionals.
This is a new breed of business that's supporting the rapidly growing freelance economy. And in this interview, I talk with MBO Partners' president and CEO Gene Zaino about this missing piece in the freelance community—and how MBO Partners is filling this critical gap and giving many independent workers a true competitive edge.
The notes that follow are a very basic, unedited summary of the show. There’s a lot more detail in the audio version. You can listen to the show using the audio player below. Or you can subscribe in iTunes or Stitcher to get this show delivered straight to the Podcasts app on your smart phone, tablet or iPod.
Tell us about yourself and MBO Partners
Gene works for MBO Partners, a company that delivers management services to solo employed professionals, and their clients, on one platform.
The MBO platform includes billings, collections, invoicing and access to benefits. It’s like an enterprise resource (ERP) system but designed for solo entrepreneurs. It gives you the leverage of a large corporate structure without having to build it yourself.
You pay a percentage (two to five percent) of your billings for these services. Your fees also include business insurance, such as errors and omissions and liability.
You also get access to a community of more than 40,000 people and over 4,000 client companies.
Over 50 Fortune 1000 companies use MBO exclusively as their independent contractor engagement platform. This allows contractors to get onboard quickly because the vendor relationship is already established.
Tell us more about what’s included
- Access to a team of business managers. MBO has experts in everything from taxes to contracting to benefits to administration.
- Contract terms and conditions expertise. MBO can assist with structuring and reviewing contracts and statements of work.
- Time and expense tracking and invoicing. MBO can invoice clients, confirm receipt and track payments. You can pay expenses from your business center. When you withdraw money from your account, taxes are funded.
- Benefits and insurance. You can opt into employee benefit group-based programs with competitive rates.
- Access to other like-minded people. The MBO platform facilities working on projects as a team. You can build an entire consulting practice on the MBO infrastructure.
- Peace of mind. You can relax knowing that everything is being done in a compliant way. Your clients are also happy because they know that you’re in compliance as a contractor.
Does this model work for people doing piecemeal work?
Yes, it also works well for people juggling multiple clients at the same time. It works well for those in the B2B realm.
Many companies use the MBO platform as an efficient way to distribute work to freelancers and make payments.
Describe the MBO payment models
MBO offers three different payment models. The model you choose will depend on your needs.
- Independent. If you have an independent company and want to stay that way, you can have a corporate-to-corporate relationship with MBO.
- Hybrid. If you need help meeting the supplier requirements of larger companies (such as insurance, number of employees, number of years in business, etc.) then you can choose to work under the corporate legal structure of MBO. You’re still paid on profits, but MBO issues you a W-2 based on its tax ID.
- Traditional payroll. Used by people who don’t want to run a business and have no need for business expenses. MBO pays them an hourly rate on behalf of client companies.
Which model is the most common?
About 50-60% of MBO solo entrepreneurs use the hybrid model. It’s a model designed for the growing independent workforce. It makes it easy for independent workers to work with a variety of companies in a legally compliant and tax efficient manner.
This model meets the needs of independent workers, their clients and the government agencies that regulate them.
What are you seeing in terms of business development for independent contractors?
Most successful independent contractors have about 10 years experience before striking out on their own. They have a core competency, a strong network and a good reputation.
Often they start with one big project. They’re able do the work while also keeping their pipeline full of new opportunities. By six or nine months, they’re in a position to pick and choose the projects they want.
Solo entrepreneurs who’re at an earlier stage in their careers often don’t have as strong a network. They need to get work from people they don’t know, which is more challenging. They have to be confident and sell themselves.
While social media and other platforms are a great way to brand your business, word of mouth and referrals are still the best way to get business.
Are there opportunities to connect with big companies through MBO?
While MBO doesn’t match people to projects, it does have a large community of freelancers. You can see who’s working with bigger clients. You can ask for help in meeting someone at the big company or you can approach the big company directly.
For the past four years, MBO has issued the “State of Independence in America Report,” a research report that details the growth of the independent workforce in America. It includes insights on demographics, motivations, commitment and satisfaction.
Where can listeners learn more about you?
MBO Partners: http://www.mbopartners.com
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