SF's 2015 Small Business Week - The sharing economy: knowing what's right for you

—The SHARING economy—

KNOWING WHAT’S RIGHT FOR YOU22 May 2015 - SF Small Business Week

—The SHARING economy— Peer economy / p2p marketplaces

1099 economyGig economy

On-demand economy

Space sharing

Transportation

Small-scale manufacturing

Personal services

Food

Education & professional services

Airbnb, VRBO, ShareDesk

Lyft, UberX, Getaround

Etsy, Shapeways

TaskRabbit, Instacart

KitchenSurfing, Mealsharing

Udemy, Upwork

Work flexibility

Income diversity

Creativity

Connection

Supplementary income

Career building

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WHY?

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Denise cheng tristan zier sam witherbeesandra garselE

innovatesf.com@SFMOCI | @hiDenise

SF Mayor’s Office of Civic Innovation

MIT Center for Civic Media

CEO/cofounder, zen99

[email protected]@zen99

tryzen99.com

Hilliard Management

hilliardmg.com

1 2 30

Freelance Consultant

[email protected]

[email protected]

» Know that there’s a diversity of peer-to-peer platforms

» Understand the different dimensions that would affect you as a provider in the sharing/peer economy

» How to get the most out of any time and efforts you choose to invest

» The blurry line between being a 1099 and small business in SF

» Feel confident that you can make an informed decision

GOALS

Increasing income potential while minimizing opportunity cost (aka “Is it worth it?”)

Tristan Zier CEO & Cofounder, Zen99

tryzen99.com

Income / earnings the total amount you earn (“gross”)

- Expenses the total spent on business expenses

= Profit / margin the amount you really earned (“net”)

Expenses above are actual dollars, and don’t include: •  Non-billable time (e.g. time prepping food for Feastly) •  Opportunity cost

A quick economics lesson

Opportunity cost

A value that must be given up to acquire something else •  “How much do you value your time?” •  If you drive on Uber, you can’t work elsewhere This is not reflected in your profit

Step 1: Find where to make that income

Websites

Peers.org Opus (opusforwork.com)

Craigslist / Ads

They’re trying to find you – FB ads and Craigslist in particular

Friend referrals

Great source of extra income!

Use them!

You’ve probably used Uber yourself at least once

Part 1: Increasing your income

Bad Good

Uber Driving at 1pm on a Tuesday Driving on Friday night

Etsy Selling something low quality

Selling something you’re good at making, and that

there’s demand for

Feastly You don’t know how to cook

You love cooking and do it anyway

Step 2: Be smart when making that income Part 1: Increasing your income

Let the platforms help you •  Example: Airbnb and local events •  Example: Uber surge pricing Some tools are starting to appear: •  Example: Airbnb pricing through PriceLabs •  When in doubt, look to others who have similar

situation on the platform

Part 1: Increasing your income

Step 3: Determine your pricing

Part 2: Minimizing your costs

Step 1: Know how much you’re really making

Whole Foods Uber

Gross earnings (4hrs) $48 ($12/hr) $80 ($20/hr) Business expenses $0 $35 Profit $48 $45

Taxes $11 (15% income tax, 7.5% FICA taxes)

$14 (15% income tax, 15% SECA taxes)

Commute $10 (BART + bus) $0 (busi. expense) Take home $27 $31

Zen99 helps with this! tryzen99.com

Track business expenses à reduce your taxable income à pay less in taxes Example for Etsy seller: •  Cost of materials (cost of goods sold) •  Facebook advertising Example for Uber driver: •  Car expenses (use Standard Mileage Rate) •  Cell phone •  Snacks for passengers

Both: •  Services like tax software or business bank accounts

Part 2: Minimizing your costs

Step 2: Minimize your taxes

Companies are now negotiating discounts •  Uber Momentum: discounts on cell phone bills, maintenance •  TaskRabbit Perks: similar discounts Find your own discounts •  If your largest expense is car expenses, get a credit card with high

rewards for gas purchases

Part 2: Minimizing your costs

Step 3: Utilize discounts

Part 2: Minimizing your costs

Step 4: Utilize existing skills/assets/time

Sell something on Etsy you’re already good at making

Teach something on Skillshare you already have skills for

Don’t finance a nice new car Drive a Prius instead of an

Escalade to save on car expenses

Keep in mind your opportunity cost; how do you value: •  Sleeping •  Spending time with family •  Working elsewhere •  Commuting in order to work (either on these platforms or for

your other job) These are all costs you need to factor in •  If Friday night is the only time you see your spouse, that time is

valuable •  If Friday night is spent watching reality TV, you could make money

in that time

Part 2: Minimizing your costs

Step 5: Be aware of your opportunity cost

Tools you can use

Taxes

Zen99, Outright, Quickbooks Self-Employed

Analytics

Zen99, SherpaShare

Finding Work

Peers, KungFu, Opus, HireReady

Managing Work

Pillow

Boring/outdated: Excel, IRS website, box of paper receipts

Some resources… Zen99 www.tryzen99.com [email protected] Tax Guides www.tryzen99.com/learn www.tryzen99.com/1099-tax-guides

Thanks!

SANDRA GARSELEHilliard Management

[email protected]

Financial Necessities

• Recordkeeping (Income, Expenses, Statements)

• Tax Preparation• City Business License/Tax • Accounting Systems

Accounting Support• CPA/ Tax Support• Financial Accounting/ Bookkeeping Support• Payroll Service

sam witherbeeFreelance [email protected]

» Know that there’s a diversity of peer-to-peer platforms

» Understand the different dimensions that would affect you as a provider in the sharing/peer economy

» How to get the most out of any time and efforts you choose to invest

» The blurry line between being a 1099 and small business in SF

» Feel confident that you can make an informed decision

GOALS

tristan ziertryzen99.com | @[email protected]

1

Denise cheng@SFMOCI | @hiDenise [email protected]

0

2sandra [email protected]

3sam witherbeeFreelance [email protected]

Lifestyle - Stability v. flexibility is the main choice between w2

and 1099

Take into account the expenses you might not think of, like

opportunity cost

Be smart about when and how you work

QUESTIONS?

What you need in order to do business in SF

Sales tax, responsibility for taxes, and record keeping for

taxes

On-demand (time) v. marketplace (skills) - How to

best choose your options

tristan ziertryzen99.com | @[email protected]

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Denise cheng@SFMOCI | @hiDenise [email protected]

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2 sandra [email protected]

3 sam witherbeeFreelance [email protected]

How to get the most out of any time and efforts you

choose to invest

Understand the different dimensions that would affect

you as a provider

Know that there’s a diversity of peer-to-peer platforms

QUESTIONS?

Feel confident that you can make an informed decision

The blurry line between being a 1099 and small business in SF