Using Subcontractors
By Patty Benton

Business has finally started to pick up.  Things are not steady, but instead you find at times that you have too many orders to fill or too many projects to complete.  You can’t afford a steady employee, or even a part time employee (or you don’t want the hassle of IRS), but you don’t want to continue working from 6 am-10pm at those busy times.  What do you do?

As a small business owner, I have found the best solution is to have some reliable well trained subcontractors on your “team.”  When I first opened my Virtual Assistance business, I had 3 well qualified people approach me that they were interested in work, if I ever had enough.  I had them sign a contract, provide me with their tax information, and told them IF I ever had work for them, I would be in touch.  Since, I have used them several times, which has helped my business to grow.  Here are some tips to help you get started using a subcontractor:

Find subcontractors BEFORE you need them.  Don’t wait until you get that first project or order, and then you are scrambling to find someone to help you, because chances are if you find someone, they won’t be the quality you desire.

 

Check references.  Just because they are subcontractors, doesn’t mean you should trust they will do quality work.  They are representing your business, and you need to ensure that you aren’t going to spend more time cleaning up their messes, then you would if you had just done the project yourself.

 

Get all your paperwork in place BEFORE you need them, and let them know you will be in touch when you have work.  This way you are not scrambling to get paperwork back, the project out, etc.

 

Have a contract, and make sure there is a no compete clause in it.  Sometimes it is necessary for you to give out your clientele information to your subcontractor, and it is necessary for them to contact your clientele, depending on the work.  Make sure they are always representing your company and understand they may NOT discuss future projects with the client and their company.

 

Agree up front on the pay, and get it in writing.  Also determine how and when you will pay them.  I have heard various discussions on paying your subcontractor immediately or waiting for client payment.  I think this depends on your company and what you can do.  I have subcontracted my services out, and have worked for people who pay upfront, and people who pay when they get paid.  In both cases, I had a written agreement, and was comfortable with the agreements.  Decide what you can do, and find subcontractors who are quality and agree to your terms.

 

Always be clear on the amount you will pay them.  You do not have to share how much the client is paying you and how much you are making off of it.  Be fair to yourself and the contractor.  You put time & money into landing the client, overseeing the project, and getting payment from the client.  You need to ensure you are compensated for that time, money, and effort.  Also, realize the subcontractor is doing the work, saving you a great deal of time, and using their own time, so be fair to them and pay them well.  If someone is not paid well, they probably won’t do the quality you want, and they won’t work from you again.  Deciding what to pay is your own decision.

 

Have in writing exactly what you expect from your subcontractor.  If they will be doing the same thing every time, make sure they have a copy at all times, and you have a copy signed on file.  If they will be doing different things with each project, then for EACH project, give specific details and have them sign a copy for your records.  This way if there is dispute on how the project was completed, you have the paper that was signed.

Working with a subcontractor can be a wonderful, profitable experience for you.  You can continue to grow your business, and take on projects you would not otherwise be able to do.  Additionally, you are not required to give them work and if they don’t do a quality job for you, you don’t have to give them anymore work.  Just remember to respect your subcontractor and treat them with dignity.  They are not someone to be looked down on, but someone who is saving you time and money.  They deserve to be treated with respect.

This article is only a general outline of working with a subcontractor, and is not meant to be the only information you use in decision making.  I did a ton of research on contracts and the uses of subcontractors so that I was comfortable in my role as the “supervisor” and knew what to expect.  I have had only wonderful experiences and am sure you will also.

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