FAQ's About MBO Partners and MyBizOffice
General Questions
Who is MBO Partners?
MBO Partners makes it easy for independent consultants and their clients to work together. We’ve been in business for over 23 years, and formerly operated under the name MyBizOffice®. MyBizOffice® is the name of our proprietary online system, and as the core of our company, MyBizOffice® is the “MBO” in MBO Partners.
To learn more about MBO Partners and meet the leadership team, explore the About MBO section of this website.
MBO Partners offers a Portable Employer of Record service (or PER) that makes it easy for you to start your own independent consulting business. This is like an EOR (Employer of Record) that you can take from project to project and client to client as you progress in your consulting career. Unlike an Employer of Record, you are considered self-employed, and you can still take the kinds of business expense deductions that a sole proprietor can take advantage of, and you are not limited to just one client.
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Why did you change the name from MyBizOffice® to MBO Partners?
We’ve been in business since 1986, and over the years the company has grown and evolved significantly. What started as a revolutionary back-office management solution for independent consultants has become a full-fledged corporate platform for small businesses, entrepreneurs, freelancers, and independent consultants. For years, Associates and clients had been calling us MBO, and we got the message. In 2008, we updated the company brand to make it work for all the communities we serve, from independent consultants to large companies and government agencies. While MyBizOffice® is a great name for the system that consultants use to manage their independent practices -- and the system retains the name -- it didn’t make as much sense when those same individuals were pursuing new contract opportunities, or telling people where they work. So we updated the name of the company to MBO Partners, and the online system you use for accounting, tax management, and running your consulting business is still MyBizOffice®.
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Who is it designed for?
MBO Partners is designed for high-end professionals who work independently: consultants, independent contractors, freelancers, and small businesses. Our services are perfect for independent IT experts, management consultants, engineers, writers, investigators, trainers, project managers, designers, real estate agents, recruiters, event planners, architects, attorneys, financial advisors, and many others. Whether you are already self-employed, or just thinking about going out on your own as a consultant, you’ll want to find out about us.
At MBO Partners, we believe that it's your talent -- you should own it. And we're here to help. We also help small businesses like niche consulting firms and small staffing firms, so if your business has its own corporation already, you still may want to learn how you can outsource your back-office administration and save time and money.
MBO Partners is also an Independent Contractor Engagement Specialist (ICES) -- the ideal solution for businesses and government agencies in need of better ways to engage, payroll, and administer their independent contractors (IC's), retirees, alumni, and self-employed consultants. We can consolidate the administration of independent contractors, and also reduce or eliminate 1099 risks like coemployment and reclassification. We partner with other experts in the contingent workforce management space, collaborating with Managed Service Providers (MSP’s) and Vendor Management Software (VMS) companies. We work with these firms as a seamlessly integrated independent contractor compliance, engagement and risk mitigation solution.
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Are there occupations or industries you do not serve?
Our company does not generally serve self-employed individuals who do product sales. We are oriented for services providers, consultants, and “knowledge workers.” Our umbrella is not set up to meet the liability needs of physical labor occupations, so MBO Partners is not a fit for construction or other physical trades. The MBO Exec business model is tailored for self-employment-minded individuals who typically earn over $80,000 per year; people earning at a lower level may find that a different solution would better suit their needs. Individuals who are not self-employed are not a fit for our platform for independent consultants and freelance professionals. The quickest way to find out if we can help is to contact us.
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How does it work?
When you join as an MBO Exec, you get W-2 status with MBO Partners by "hiring yourself" as an employee of your own business division inside the MBO Partners infrastructure. You receive the benefits and privileges normally associated with a full-time job, like administrative / HR support, group benefits, and a stable employment record on a W-2 (for credit approval purposes).
But it's better: you'll get to pursue contracts and clients whenever and wherever you want—and you even set your own billing rates. We then collect your time and expenses, bill your client, collect your money, deduct appropriate taxes and insurance costs, and direct deposit your proceeds. It's your talent, and you own it. You remain in all other respects a self-employed small business owner.
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How can I be both independent and a W-2?
MBO Partners offers an innovative business model that we originated in 1986 called a Portable Employer of Record (PER). You virtually can "employ yourself" through the business model, and we open up a division of MBO Partners in your name, with your own P&L. You assume responsibility for both the risks and rewards (profits) of your own consulting business. It's a combination of the best of both worlds, and is a solid alternative to self-incorporation.
As you work for your clients, you can enjoy all the perks of a corporate employment structure. But we don't get in the way of your independence. You can focus on building an independent consulting career, while we take care of the administrative details. You own the relationship with your clients, and if you ever decide to leave, you can take your book of business with you.
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Are there any start-up or monthly fees? Would I be charged a fee if I decide to do something else?
There are no hidden fees, account set up fees, or monthly service fees – the cost of the program is assessed as a percentage of your billings or receipts.
We’ll even reimburse you for the program fee on the (optional) American Express card program, because we think it’s a great program and we want Associates to take advantage of the convenience and automation.
If you elect to enroll in optional medical or dental benefits, those programs may require deposits to ensure your benefits are not interrupted -- just ask your Enrollment Manager for details.
If you ever decide to depart MBO Partners, there are no obligations or fees. We pride ourselves on full transparency – the business is yours, and you have the control. Talk with our experts for a detailed preview of how the program will work for you.
For some Associates who work on a commission basis, such as real estate agents or insurance agents, we have a special bank deposit program to accommodate your needs, and a nominal bank fee may apply for this extra transaction service. Your Enrollment Manager will explain how that program works.
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How much does it cost?
For everything we do, we assess a Services Fee of only 5% of your gross billings. Better still, once we collect more than $125,000 of your billings in any year, your Services Fee goes down even further—to only 1.5%—for the remainder of that year (based on your anniversary date with us).
We deduct these funds from your online MyBizOffice® account before calculating your taxes—so even our Services Fee is a tax deduction.
For many Associates who prefer to work through MBO Partners rather than struggling on their own, the Portable Employer of Record model offers a suite of savings and tax advantages that may offset the program fee partially or fully, and some consultants even make more money going through MBO Partners than they would as a sole proprietor or 1099. Situations vary based on your unique business needs. For a detailed break-down of how this will work for you, contact us.
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How is being an Associate with MBO Partners better than "going it alone"?
There are several reasons. First we save you money—by giving you the ability to reduce your taxes while minimizing your need for accountants, tax preparers, and benefits brokers. MBO Partners also saves you time by handling billing, collecting, and other administrative hassles.
As an MBO Partners Associate, you’re covered under our group umbrella for General Liability and E&O insurance, and the savings from this alone can often offset the MBO Partners service fee for most consultants.
We also help in ways you may not have thought of. We greatly improve your ability to get loans and mortgages because you'll have a single Portable Employer of Record (PER) throughout all your contracts and you can demonstrate your income on W-2 style pay-stubs, which typically makes it much easier to get credit approval compared to being self employed outside of our structure.
Getting on the vendor list for big clients is generally streamlined, and MBO Partners is already an approved vendor for thousands of clients, making it easy to get started on projects. And being an MBO Partners Associate also lets you alleviate the perils associated with being a 1099 or self-incorporated at tax time—not to mention reducing your likelihood for being audited. Finally, we help you save on legal fees by reviewing and executing your contracts.
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How is MBO Partners better than using an intermediary (such as a staffing company, broker, or professional consulting firm) for true independent consultants?
Many staffing companies and end-clients probably want you to become their employee—but they may not offer the robust benefits, expense reimbursement, retirement plans, and flexible payroll options that come with MBO Partners. With a typical EOR (Employer of Record) situation, you may not be able to work for multiple clients, on multiple projects at the same time. You may not be able to deduct business expenses from your taxes. And they generally take a much larger cut of your billings, because their business model is focused on finding assignments for you.
If you need a staffing firm to help you find projects, that might be a good situation for you -- just take care what you sign. MBO Partners collaborates with many staffing companies and consulting firms and in many cases you may be able to work something out so that you can work for more than one client and not get locked in.
For true independent consultants who find their own work and have multiple clients, the Portable Employer of Record service through MBO Partners may be the better option. Talk with our experts to find out how we can either work alongside, or replace, your use of agencies, recruiters, and staffing firms.
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Can I leave at any time?
Certainly, you can leave MBO Partners at any time. There are no fees charged to close an account. But don't be surprised if, like many of our Associates, you establish a long-running independent career through us.
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Project Questions
Do you have any open positions or jobs for me? Should I send you my resume?
Nope! Our service was designed for independent consultants and freelancers who find their own work and who are truly self-employment minded.
We do not perform recruiting, job placement, or match-making of any kind.
If you are looking for your next project or client, talk with our experts to find out how you can leverage our resources and contract relationships to market your services, or explore collaboration with our community of Associates and project teams. You can also explore contract job boards like Dice, Guru, HotGigs, Sologig, Rentacoder, Elance, and more, or find out if a headhunter or staffing firm is willing to place you via MBO Partners.
We recommend that you connect with our LinkedIn group and other social networking sites to get your name and website out there.
If you are interesting in joining our internal, corporate team, please visit our Careers page to learn more about the job opportunities available.
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Is MBO Partners a staffing or project placement company?
Nope -- see the question above. We don't perform project matching services—which is one of the ways we keep our service fee so low. The independent consultants and freelancers working through MBO Partners are self-employed -- they find their own projects and build their own business clientele, and the internet has opened up the marketplace for project work in many ways. Our model is designed for independent contractors and freelance professionals that can line up their own work, either solo or in teams with other independent consultants.
Also, unlike most staffing companies, MBO Partners never includes non-compete or non-solicitation clauses in its contracts with MBO Exec Associates. You can work for multiple clients, on multiple projects.
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Can I still use a staffing company or contracting firm to find projects?
Absolutely. Many of the independent consultants who work via our platform obtain projects through various project matching organizations, recruiters, and staffing firms. As long as you are happy with the rates and the work, we can engage you through intermediaries with no additional effort. Indeed, we partner with hundreds of staffing firms and consulting firms and have a great working relationship with them. We advise independent consultants to take care not to sign any broad non-compete agreements that might prevent them from taking future projects -- ask an MBO Partners representative for more information on contracts.
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How does MBO Partners enable me to get into other clients?
Many organizations won't do business directly with independent contractors (1099s) for two primary reasons: using them may violate tax codes and lead to severe penalties, and clients generally want to limit the number of different vendor companies they use and streamline billing and payment via automated vendor management systems. (As an independent consultant or freelancer working on a project for a client, you would be considered a vendor just like any other company.)
But when you use MBO Partners, you're not considered an independent consultant in the eyes of the organizations for which you would like to work. Instead, they'll see you as part of a company, one with which they may already have a vendor agreement. So getting started on a project within these clients would be a snap! It's like having a hunting license -- you still have to find the work, but a lot of the red tape is gone.
Ask our representatives if the clients you want to consult for already have a contract in place with us. Our contracts team is always ready to execute new master agreements with your existing or prospective clients, as well. The process is usually quick and easy because we meet the rigorous "vendor qualifications" that most businesses require.
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Do I need to have a contract ready to join MBO Partners?
No. You can get started without having a contract in place by talking with an Enrollment Manager and getting a detailed financial estimate that shows how our program will work for you. However, you won't become an official MBO Partners Associate (and begin receiving all the great benefits) until you start billing to a contract. Your actual start date would be the day you begin billing. Contact us to learn more about how our program for self-employed independent consultants works today, so that when you are ready to start a project we can help get you up and running immediately.
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I am still a W-2 employee in a regular job – do I have to wait until I am no longer with my firm to get started?
Our representatives would love to hear from you today and find out how we can help. Some consultants may elect to start project work through MBO Partners while still being a W-2 employee with another company, and this is simply considered a second job. Or, you may be making the transition from employment to independent consulting or freelance work, in which case it’s better to get started with enrollment now. When your project actually begins, all the pieces will be in place to get you working rapidly. Typically, our program will be a better fit for you if you believe your independent work will ramp up to the equivalent of a full time job within a few months. If you will be in transition over a long time and your independent contractor earnings will be under $70k a year, talk with our experts to find out more about qualifying.
Your situation is unique, so the best way to find out what to do is just contact us, and we’ll let you know the best route to get your solo business where you’d like it to go.
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Will my clients be OK with this arrangement?
Absolutely. We find that most clients are more willing to work with individuals who are part of a larger organization. Many clients even refer their independent contractors and consultants to us so that we can provide an administrative umbrella for them, and maintain independent contractor compliance. For the clients, we make working with talented independent consultants like yourself easier, safer, and more cost effective. Businesses worried about contractor misclassification will be able to rest easy, and your business through us is covered by the kinds of business insurance that clients like to see.
That said, it definitely is best to start the conversation with us very early on so there is a smooth transition to setting the program up with your client. If you are interested in our program, call us today to find out more so you'll know how to handle contract negotiations when you do get a client lined up.
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My client says I cannot be an independent contractor directly with them, and I need to work through you. Why? What should I do next?
Many clients will send us their high value independent consultants and freelancers. If your client referred you to us, or said you need to find an EOR or Employer of Record, contact us today so that we can help get you set up with your own business division inside MBO Partners. Many clients have special programs with us for their independent contractors, so contacting us now is the best way to make sure you have the right information.
There are many reasons clients refer independent contractors, freelancers, and consultants to MBO Partners. They know that by going through us, the process to get you paid will be fast and efficient. Their risks for working with an independent contractor (like tax reclassification and co-employment) will be greatly reduced, as we make sure all contractors are a compliant corporation, are payrolled, or are safely engaged as a self-employed MBO Exec through the Portable Employer of Record platform, MBO Exec. And finally, they know that you’ll be taken care of, with our suite of executive group benefits and high touch, VIP support.
If your client told you to find an Employer of Record or Agent of Record service, we can help. Our unique Portable Employer of Record model means you aren't limited to just one client or project at time, and you can take advantage of business expense deductions that you cannot get in a traditional Employer of Record program. Contact us to learn more: with our Portable Employer of Record service, we can help both you, and your client, be more successful.
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Financial Questions
How can being an MBO Partners Associate help me make more money?
One way is that we minimize the administrative burdens of independence... so you can dedicate more time to working on projects, improving skills, and marketing your talent. All of these lead directly to greater income. Also, MBO Partners offers group rates for health insurance and provides free general liability and errors and omissions insurance coverage. (For many newcomers to independence, the need for liability insurance is an unwelcome surprise.) MBO Partners also lets you deduct all of your out-of-pocket medical and dependent care expenses (up to $10,000 and $5,000 a year, respectively) in addition to all the "traditional" business expenses you may be accustomed to claiming. We can even bill your clients for you if you have expenses that go back to the client.
And don't forget: our retirement plans allow you to shelter up to the legal maximum from your taxable income (the 2010 maximum you can contribute to your MBO Partners 401(k) plan with Fidelity is $49,000, or $54,500 for individuals over 50). Our tax-advantaged 401(k) provides for incredible tax savings compared to an SEP retirement plan.
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What is MyBizOffice®?
When you enroll with MBO Partners, we create your own one-person division within our company. And you're completely in control. Through the MBO Partners secure online system, called MyBizOffice®, you can keep tabs on everything that's happening in your business: monitor your accounts, review your payment status, see your billing history, change your benefits, enter your time and expenses, and much more. It’s accessible any time, any place, through the secure online interface.
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What is the role of my Business Manager?
Your Business Manager is your primary point of contact with MBO Partners and supports your day-to-day needs. Our friendly and experienced Business Managers are trained to handle even the most complex questions about our services. Your Business Manager is there to answer your questions regarding payroll, benefits, contracting, investing, and more . . . even learning about how to build your business into a team, or even into a small consulting firm.
At MBO Partners, we don't believe in anonymous call centers.
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What happens to my money after I perform my project work?
As soon as your time is entered into the system and approved, we go to work collecting your money from your client. When we receive the payment, we post your funds to your account within the MyBizOffice® system, and deduct our fee (pre-tax). We reimburse your business and medical expenses, invest funds into your 401(k) at your direction, pay your elected benefits premiums (optional), and then depending upon the payroll schedule and amount you select, we allocate funds for payroll and extract appropriate state and federal taxes. Finally, we direct-deposit your funds into your bank account.
Contact one of our Enrollment Managers for a transparent, detailed financial estimate that shows how the taxes and accounting work.
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What taxes are withheld from my Business Center?
At payroll time, for individuals on the MBO Exec (Portable Employer of Record) program, we are responsible for collection of corporate payroll taxes from your account. We are required to withhold various employer-side payroll taxes on your behalf to various state and federal agencies. Because this solution is for self-employed individuals, you pay these taxes out of your account as an expense. These are over and above the employee-side payroll taxes typically withheld out of every paycheck. These taxes are analagous to the self-employment taxes a sole proprietor has to pay on their own. Just as you employ yourself via the Portable Employer of Record service, so you have requisite taxes.
Your Business Manager can show you how this transparent accounting process works and is detailed in your account information. Individuals who have previously been self-employed or worked as independent contractors should readily understand the tax implications of self-employment. If you are new to independent consulting or freelancing, our representatives are happy to show you a detailed estimate and explain how everything works. We can also review the financials with your accountant to make sure everything is clear.
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Is the MBO Partners service fee tax deductible?
Yes. We deduct our fee pre-tax, so our fee never appears as income and is not taxed.
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Will I get a regular paycheck?
As long as you're billing clients and have revenue coming into your Business Center, yes you can pay yourself regular paychecks. Through your online MyBizOffice® account, you determine how much you want to be paid and when you want your money. Payroll is processed every week. We can certainly send your money from the next payroll cycle after we receive your funds, but many of our consultants choose to spread payments over a period of time (getting "regular" paychecks) to aid in monthly budgeting.
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When will I get paid?
We begin processing your money as soon as we receive it from your client. Client payments received by the end of the week will appear in the following week's payroll cycle. Again, you may spread payments over a longer period of time if you wish.
For an additional fee, and for credit-approved clients, you may choose to have your payments advanced. MBO Partners pays advanced Associates in the pay period immediately following the approval of their time worked. (Credit-approved clients only.)
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How do I account for expenses?
Through MBO Partners' unique pre-tax expense reimbursement program, independent consultants are eligible to take legitimate business, medical, and dependent care expenses out of their operating funds on a tax-exempt basis. Because MBO Partners reimburses your allowable expenses pre-tax, you can reduce your taxable gross wages and therefore dramatically reduce your income tax payments. Further, MBO Partners Associates realize the tax benefits of their expenses immediately, rather than waiting until tax time.
Using an optional corporate MBO Partners American Express card makes expense management even easier, as the expense data is automatically uploaded into MyBizOffice® for you to approve.
We offer the American Express card program at no cost to you. Ask your Enrollment Manager as you're getting started to send you the American Express card link.
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How can using MBO Partners help me secure a mortgage or refi?
Mortgage brokers and other lenders are much less likely to approve loans to people who don't show solid job continuity. If you are self- employed, you may be required to show two years of tax returns to demonstrate proof of income to qualify for a loan or refinancing.
But this is not a concern for independent consultants and independent contractors working through MBO Partners, because in the eyes of someone running a credit report, your W-2 tax status with us appears as a single employer of record—no matter how many different clients you work for! This can strengthen your credit significantly.
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How does using MBO Partners make filing taxes easier?
Tax time for independents used to be a harrowing and expensive challenge. But instead of wrestling with scattered 1099 forms and stacks of expense receipts, our MBO Exec Associates simply file taxes using the year-end W-2 we send them. Business and medical expenses have already been processed.
And quarterly tax estimates? Independent consultants working through MBO Partners don't have to do these either!
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Associate Support Questions
What Associate support does MBO Partners offer?
When you join MBO Partners, we assign you a dedicated Business Manager. You can reach your Business Manager during normal business hours (Eastern Time) and he or she will answer your questions or resolve any problems that arise. It's like having your own personal HR, Accounting, and Administrative departments! In addition, you can access every detail of your business operations through MyBizOffice®, your secure online account with MBO Partners.
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What can I access through MyBizOffice®?
You can use your online account, MyBizOffice®, to enter your time and expenses and access all payroll and account transactions. In addition, you can update your profile including payroll and benefits options. You can also take advantage of the resources in our Connection Center, where you can connect with other independent consultants, view our some of our clients, and build your own google-searchable MBO Partners website.
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Is my information secure?
At MBO Partners, there is no greater priority than the security of our Associates' financial information. Our financial systems were designed and implemented by experts in the development of secure e-commerce applications. For more information about the security of our system, talk with our experts and ask for more information.
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Benefits Questions
What benefits does MBO Partners offer?
MBO Partners offers comprehensive group health and dental insurances, life and long-term disability (LTD) insurances, and free professional errors & omissions (E&O) and general liability (GL) insurances. In addition, you can take advantage of the MBO Partners 401(k) program and set aside even more with a generous match that allows you to contribute up to the legal limit from your taxable income: for 2010, that's $49,000 ($54,500 over age 50) per year.
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Do you mark up your benefits?
We do not mark up the cost of benefits; all benefits costs are passed through to our Associates, with the advantage of our true group rates. We do not sell insurance of any kind, and we are not an insurance broker. With MBO Partners, independent consultants, freelancers, and independent contractors can access true group benefits just like those offered in any large corporation.
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Are you self-insured?
No; MBO Partners is not self-insured, and we make no profit on benefits we offer. We partner with well-known benefits companies to offer our Fortune-500 style programs.
When researching umbrella companies with services similar to ours, or looking for health insurance for freelancers and independent contractors, find out if the firm you are thinking about using is self-insured. This is a risky practice, but often enables the firm to profit from the plans they offer.
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Can I use my own health benefits?
Yes you may; the medical and dental plans are fully optional. If you do decide to use your own plans, keep in mind that you can still deduct your premiums and out-of-pocket co-pays through our special medical expense reimbursement plan, even without hitting the normal threshold of 7.5% of AGI. This is yet one more way our program can help you save money. Read more about our medical expenses elsewhere in this FAQ.
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How does the 401(k) matching work?
Because you run your own business within the MBO Partners infrastructure, you can decide the level of contribution you make to your 401(k) (up to the legal limit, of course). The contribution you make is also matched from your business funds, which enables you to contribute the maximum allowed to your retirement. In essence, since you are employing yourself through our business infrastructure, you can make contributions from the employer side as well as from the employee side.
It is possible to max out your MBO Partners 401(k) twice as fast as you could a SEP IRA, while realizing significant savings by not having to pay self-employment taxes on most of your retirement contributions. Please contact us for the details about our tax-advantaged retirement program – it’s a unique, executive plan (even better than other "solo 401k" programs that are fee based) that was designed for high-level consultants, and our experts would be happy to go over it with you.
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When can I begin participating in the 401(k)?
You may participate in the 401(k) as soon as your MBO Partners engagement begins (iwhen you begin billing your first client). Once you get started, you can also have the option of rolling over any previous 401(k) accounts into your 401(k) with MBO Partners.
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Got more questions?
Give us a call at 1-800-220-0469 or contact us through the forms on our website. A detailed discussion with one of our Enrollment Managers will help you understand how our program will work for your particular business case.
