The company that you manage has invested $5 million in developing a new product, but the development is not quite finished. At a recent meeting, your salespeople report that the introduction of competing products has reduced the expected sales of your new product to $3 million. If it would cost $1 million to finish development and make the product, should you go ahead and do so? What is the most that you should pay to complete development?
I talked briefly about independent contractors (vs. employees). Employers can hire independent contractors and avoid expenses normally required like payroll taxes, workers compensation, healthcare, etc., ONLYwhen certain conditions are met by the independent contractor. I covered several but not all conditions that must be met in order for a person to work as an independent contractor rather than as an employee. These conditions mostly concern HOW the work is performed and WHERE it is performed. Generally, if the independent contractor does the same job as an employee, these conditions are NOT met. The work has to be performed independently, with one’s own equipment, not at the employer’s worksite, in a manner of the person’s own choosing, and without direction from a company supervisor.
