Working With Contractors Made Easy

One of the most challenging parts of growing an Internet business is the location, qualification, and engagement of contractors. Although contractors offer major advantages over full-time employees, finding them is at best a costly and time-consuming process.

Over the last few years, I’ve developed a methodical approach based on some basic lessons that I’ve learned the hard way. In this article, we’ll look at some of the core concepts that will allow you to get the most out of your contractors while fostering the long-term relationships that will put your business in a strong position from which to grow.

The article is broken into six parts:

Part 1. Finding Candidates (starts below)
Part 2. Qualification and Trial
Part 3. Managing Contractors
Part 4. Money and Payments
Part 5. Legal Agreements
Part 6. Working with Offshore Contractors

Part 1: Finding Candidates

How Much Would You Pay for the Perfect Contractor?

Large corporations spend billions of dollars on recruiting, human resources, and employee benefits every year. Many small businesses, however, fail to see the importance of quality recruiting and outsourcing techniques; instead, they attempt to just ‘make it happen’ without any budget or time allocation at all.

These businesses soon learn that ongoing contractor problems quickly become a frustrating source of stress, expenses, and client dissatisfaction. Given the fact that human resources are arguably the most valuable assets a business can have, concrete steps should be taken to avoid this pitfall.

In other words, you need to be prepared to spend money and time to find the right contractors. If you don’t spend a little money at the beginning, you’ll fork out more in the end. Most of the money will go to trial projects, with the rest spent on advertising and networking.

Even the smallest company can create an effective outsourcing plan on a shoestring budget. Here are some must-do tips for getting started:

1. Refine your goals and narrow down what you’re looking for.

   What are the skills you need? Would you prefer one jack-of-all-trades type, or three highly-skilled professionals with more specialized capabilities? Do you want an expensive, high-end contractor who can handle client communications in your absence, or would you prefer a younger, less-experienced contractor who you will need to manage personally?

2. Create a budget including some well-planned trial projects.

   That’s right, trial projects. Trial projects are the single most important thing you can do to ensure that you are working with qualified, skilled contractors (see next section for more on this). Also include advertising, phone calls, and your own time in the budget. How much is it worth to you to find the right contractors? If you’re seeking two great contractors to perform $1000-$2000 jobs, expect to pay for 3-5 trial projects of about $200 each before you find the right one.

3. Create a timeline.

   When can you put your contractors to work? Are you bursting with overflow work today, or are you getting ready for future projects? Be up-front about this with potential contracts, and make your position clear.

4. How much can you spend?

   Don’t wait for potential contractors to set the price for you. It’s critical that you have a clear idea of what your preferred rates will be, and what your expectations will be for that rate. Contractors have a nasty habit of being highly inconsistent with their rates depending on how busy they are, or how much they want your job. If you aren’t sure what a fair market rate is for a particular job, do some research or ask around until you have a number in mind. Use that figure in your assessment of candidates later in the process.

5. Got backup?

   One contractor is great, but if you’re going to go through the process of interviewing and qualifying one contractor, why not make it two? It’s great business to have a signed agreement with a backup contractor in case your primary contractor doesn’t come through or is overextended. Be sure to explain this to the backup contractor and make it clear that any overflow work will go to them -- nobody likes to be a runner-up, but most contractors will be happy to have a potential client lined up.