'I am developing a Full Service Event Design Company in which it is necessary for me to collaborate with a caterer,florist,event planner etc. to offer full service event packages. The customers would pay my company , I would in return pay for the services of the other professionals. I would also prefer that they brand their services as a featured associate of my company and only promote my company, although they would be free to build their own services clientele.'   I own an event planning business. You may want to rethink your business model and perhaps seek counsel from a small business development center or a SCORE counselor. First, established businesses are not going to brand their services as a featured associate of your company, particularlly when you are the new business. That is a naive assumption. They, like you, are in business to make money. They do that by operating as independent businesses and by providing their services to all the event planners/designers and businesses in the community. Unless you can pay them substantially more than anyone else and keep them busy 24/7, they will not promote only your business.   Another concern is with you asking clients to pay you then you pay the vendors you hire. This can become a financial nightmare. Event dates change; events get cancelled; unforseen situations arise. When that happens and you have contracted to pay vendors and have signed contracts with them, you become responsible for paying them for lost business if the event doesn't occur. That money will come out of your pocket if you are unable to collect from the client.   The industry norm is for a client to contract with you for only your services. You then direct them to appropriate merchants who can provide the services they want. The client then signs a contract with the individual vendors and they pay the vendors. That way, if something occurs, you are not left holding the bag.   You may also want to talk with your insurance agent about your idea and check your state's consumer protection laws. My insurance company requires that I offer at least two choices for each service, then let the client choose the merchant to hire. That way, the client assumes liability for their choices. If I insist they use the merchants of my choosing, I become legally liable for the outcome of the event and for the performance, good or bad, of the merchants I selected.   If you are thinking of marking up invoices and adding a percentage for yourself or charging merchants you hire a percentage of what they make on an event, that may violate consumer protection laws. It does in my state. Most states have laws requiring full disclosure. Anyone who marks up invoices or asks for kickbacks has to disclose that information to clients before they sign a contract because such activities impact the amount the client untimately pays.    

We use Independent Contractors, mainly because we have not grown to the size to be able to afford a full or part time employee. Everyone's answers have been helpful (well, most everyone's). So, I'm not going to reiterate what has already been stated. I will just say that the downside with an IC is that, often, because they have their own agendas and you're not paying them enough to keep their sole loyalty, they will not have a stakeholder's mentality (see this thread I posted a few weeks ago for more on this discussion). So, my advice would be: do thorough interviewing, background checking, screening, what have you - of the contractor before you hire them. I have had more than one experience of just not hiring the right contractor for the job due to hastiness. It's really important that your contractor's values and career aspirations at least somehwhat align with yours and your business, otherwise you're headed for a lackluster performance from them. Message Edited by petrosianii on 09-10-2009 11:51 AM Message Edited by petrosianii on 09-10-2009 11:52 AM