Once upon a time, running a business meant doing everything yourself. Way back when, before the invention of the Internet or the telephone or even a bunch of legal rules governing business, it wasn’t so hard to do everything in-house. You’d hire your own employees and fire them if you felt like it, you’d balance your books with pen and paper, and so on. Nowadays, in order to stay competitive, you need to outsource your work to contractors and freelancers.
There is no way around it, these days, things aren’t as simple as it used to be. You need human resources departments and legal departments and IT departments and all sorts of other staff. And even your business tasks are specialized and may involve working with all kinds of contractors and subcontractors. How can you navigate this confusing business landscape?
IMAGE: PEXELS
Contractors, Freelancers, And Outsourcing
Just about any entity that works on a contract basis can be considered a contractor, from a plumber who installs walk-in bathtubs to the tech firm you hire to engineer your business’ online presence. Freelancers are contractors, and you can contract out internal business tasks, a process called outsourcing.
Why do companies do this? Simple: to save money. Hiring people is expensive, and so is firing them. And you may indeed have to fire them because hiring experts in an area that you’re not an expert in yourself is a rather tricky thing. So businesses choose to contract out internal tasks and buy third-party software to manage things like payroll and telecom expense management and IT. They hire freelancers to take on short-term projects and even long-term ones. They pay these contractors good money, but they also gain flexibility and expertise.
How To Choose Contractors
Making the right decisions about contract work involves answering two separate questions. First, you’ll want to ask what you should outsource and what you should keep in-house. Next, you’ll need to decide who to hire to do that work.
[pullquote]As a general rule, smaller businesses should outsource more than larger ones.[/pullquote] If you’re a behemoth like Amazon, there’s no reason not to hire people whose sole job is to fly around to various offices and give talks on sexual harassment policy. It’s cheaper than paying by the hour because you have enough offices to keep them busy all day long. Smaller businesses, on the other hand, will want to outsource this. The same goes for everything from IT to payroll – as your business grows, you may want to bring more of these in-house.
You’ll also want to consider what your business does best – and what you know best. If something is well outside of your area of expertise, consider outsourcing it to a contractor. This is particularly true in customer-facing tasks. If your company is very good at one portion of the job but not any good at another, you’ll want to grab a subcontractor – otherwise, shoddy work on part B can mask your success with part A and leave you with an unhappy customer.
As for who to hire, the good news is that the widespread use of contractors has led to the widespread availability of information about contractors’ services. From Yelp and Angie’s list to corporate networks and private feedback, it’s not that hard anymore to check out a new company’s reputation. If you’re investing in an important business decision, consider checking with your professional network for honest suggestions.
Ultimately, though, your risk will always be limited with contractors. A good contract will give you a way out if things go south – and that’s just one more advantage of contract work.
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