While you can always start out on your own, once your business takes off you do need a hand at some point. Whether it’s setting up your financial administration systems effectively, getting your bookkeeping up to scratch, or setting up online systems that allow you to work more flexibly, you can bring in this expertise with independent contractors.

You can hand over tasks you don’t have time for – at a fraction of the cost of an employee. Unlike with staff, you won’t need to pay payroll taxes, superannuation contributions or workers compensation insurance for contractors.

Many contractors work virtually from their home office and have their own equipment and communication tools. They may specialise in web development, graphic design or marketing support. Not every small business has these types of skills and expertise available in-house. You can even get personal assistant, receptionist or general admin services by outsourcing to a contractor.

However, a contractor needs to be managed just like an employee, only a little differently. Builders and tradies know this all too well when they take on sub-contractors for large building projects, for which they need extra man hours.

Contractors are accustomed to being their own bosses, for one thing. And because they may work for a number of companies at one time, they may have divided loyalties.

These tips will help you get more for your money (and minimise undue stress) when hiring an independent contractor. If you don’t know whether you have the budget to hire a contractor you can contact us directly and we can conduct a FREE Cash Flow Pulse Check for you.

Pick your contractor wisely

From the outset, you’ll minimize the need to manage a contractor by carefully screening anyone you consider for the job.

Interview contractors with as much diligence as you would a potential employee – and be sure to follow up with references. Before you sign any contract you want to make sure a potential hire is

• both qualified and a good fit for the job
• responsible and easy to work with, and
• will most likely want to continue working for you.

Keep in mind that high turnover is a costly problem for small business owners. If you find out in an interview that a contractor is providing regular core services for several companies, you might want to consider hiring someone else.

Check out their online presence on Facebook or LinkedIn to get some background knowledge before you contact them. Visit their website, if f they have one, so you can get as much information upfront as possible.

When you do find someone you hope to work with long term, pay them well and take care to make them feel they’re a part of the team so they’ll stay motivated – and stick with you.

Be clear about scope

Contractors may either provide you with ad hoc services or you can arrange ongoing service packages with them. It’s important to be crystal clear about the scope of service you are looking for and negotiate what’s in and what’s out.

Just like you have job descriptions for employees to define their roles and responsibilities, you’ll need to agree a scope of work agreement with an independent contractor that outlines their project guidelines, timeline, and payment terms. This may be based on a proposal the contractor prepares for you in line with the expectations you have communicated to them during the engagement process.

Defining the scope of work up front in writing – as well as how any changes will be managed – saves time, confusion, and ultimately protects both of you.

You’ll simplify the process for working together by laying out your expectations for how the work will be delivered up front. Your contractor will avoid the dreaded “scope creep” that can happen when a project changes without additional compensation built into the contract.

It’s a 2-way street

The best way to keep your contractor on task and stay on track – without micro-managing the project – is to set milestones together and regularly communicate on progress.

For instance, you might agree that project targets and deliverables will be met by specific dates, which you’ll both track via a collaborative cloud-based document sharing system, like Google Drive, or a project management tool, like Basecamp or Trello.

In order to ensure those milestones will be met, agree to a weekly progress report by email or phone. If an issue arises, you’ll be able to address it before it gets out of hand and puts the success of the project at risk.

Final thoughts

The best independent contractors are professionals, and shouldn’t need much managing from the companies that hire them. Ideally, they’ll just need a bit of guidance to perform the work to your standards and expectations. Ask a colleague in your network if they have any recommendations to minimise the time searching for the right person.

By and large the tips offered in this article are proactive measures, so you don’t have to spend a lot of time managing a contractor. Rather, you’ll spend the bulk of your time monitoring progress to make sure the job gets done, instead of managing each step of the process.

Communicate clearly, up front and in writing, to create clear expectations on both sides – and avoid excessive backtracking to ensure the work you’ve outsourced is completed up to par.

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