Understand the difference between vendors who provide products and independent contractors who provide services. The distinction matters for contracts, liability, and tax treatment. Misclassifying workers creates legal risk.

The IRS uses behavioral control, financial control, and relationship type to determine classification. Misclassifying an employee as a contractor can result in back taxes, penalties, and lawsuits. Know the rules.

Without a written agreement, you have no legal recourse if a contractor delivers poor work, misses deadlines, or disappears. Verbal agreements are nearly impossible to enforce. Always get it in writing.

Master the three key documents: Statement of Work (SOW) for specific projects, Master Service Agreement (MSA) for ongoing relationships, and Non-Disclosure Agreement (NDA) for protecting confidential information.