Growing your business - contracting in
07/08/2007

As every entrepreneur knows there are various defining moments in setting up and running your own business. These include making the momentous decision to start a business, getting your first client and growing the company to such an extent that you need to expand.

Growth is an important part of any business but it can be difficult for small businesses to manage growth without taking on new employees. This can result in a vicious circle; without the additional employees the business can not achieve its growth targets but the extra resources are a cost burden that the company can not afford until the new business has been completed.

Fifth Dimension have direct experience of this, having gone through this difficult situation and found a solution to the problem. Ivor Smith explains, "One of the strategies that we have employed to ensure that we can grow the business and fulfil commitments without having to employ additional permanent members of staff is using contractors.

"Using contractors provides a great deal of flexibility in terms of pursuing the growth of the business. If you know you are going to have a busy period, especially one which is likely to be followed by a lull, using contractors can be the ideal solution. It will save you having to take on a permanent employee when it is probable that there wouldn't be enough work over a sustained period to justify the move.

"Obviously this requires a great deal of consideration because it has to be carefully managed to make sure that your clients receive the same level of service at all times." Ivor continues, "However it is an extremely effective way of managing growth especially in a business where the workload can be seasonal."

Ivor has these tips and advice for business considering bringing in contractors to deliver their services.

Choose carefully

Establishing and maintaining the reputation of your business requires a great deal of time and effort - but it only takes seconds for all your good work to be undone.

Remember that anyone that you employ to deliver your services, whether on a permanent or one-off basis, is representing your company and as such can have a positive or a negative impact on the business's reputation. Although they may be a contractor, as far as your clients are concerned they are a member of your staff.

Ivor says, "Before making a commitment to engage the services of a particular person make sure that you are 100% convinced that they can deliver on your behalf. Just as you would interview and then take up references on a potential permanent employee you should also do this with prospective contractors.

"Make sure you follow up and check their qualifications or membership of relevant trade and industry bodies too," advises Ivor.

Consistency

No matter how good someone is at what they do you need to be sure that they will deliver your service in your 'house' style. In order to achieve this you will need to set aside time to carry out or arrange any necessary training with the contractor to prepare them adequately.

"Consistency is important, and it's essential that not only are standards maintained when using a contractor, but the presentation of the work and the delivery of the service are equally as crucial as the service or product itself. Even little things, like the corporate font you use, should be adopted by the contractor when acting on your behalf.

"Make sure that they have a good working knowledge of the background of your company too, and are well-briefed in what you expect of them," continues Ivor. "Ensure that you leave plenty of time to address the issues at hand - a rushed training session is almost as bad as no session at all. Make sure that you have prepared the key points and objectives in advance so that you dont forget something vital."

Plan ahead

Business growth is a strategic part of business development and should be approached as such. If you are aware that you might need to employ someone to fulfil a specific client requirement then make sure that you give them adequate notice so that you can be sure that they will be available.

Ivor suggests, "You should also consider the costs that bringing a contractor in will incur. If when pricing a job you know that you will have to employ someone to deliver the work in your stead then it is generally advisable to build this into the quote."

This means that you should be aware of exactly how much it would cost you to contract in support. Take the time to research your options thoroughly.

Need help with the filing?

Another area where growing businesses can benefit from contracting in additional resources lies in dealing with their administrative functions. As Ivor points out, "Business operators often under-estimate how much time needs to be spent on basic administrative tasks. During busy periods it can be helpful to bring in temporary resources in order to ensure that that you remain on top of all the administration that is associated with running a business, and free up valuable time to tackle other things."

In many small businesses, staff often have to take on duties that they are not entirely comfortable with or are perhaps not the best use of their talents. "Contracting in someone who knows exactly what they are doing can be a massive benefit to the business," explains Ivor. "For complicated tasks such as payroll, it's often much more efficient to have an expert do it - that way you can concentrate your own efforts on your core business functions."

Strength in depth

Ivor recommends building up a 'bank' of contractors to call upon. "Don't just limit yourself to one person you regularly rely on. Having a pool of approved contractors to choose from offers you stability and flexibility. That way, if one contact is not available when you need them, you can quickly arrange for someone else to provide the cover without having to bring them up to speed in a short space of time.

"It also means that if a contractor lets you down and you need a replacement at short notice in order to fulfil an obligation, chances are that youll be able to find one."

Put it in writing

Perhaps one of the most vital things to consider when working with contractors is to make sure that you have a written agreement in place before they undertake any work on your behalf. "This will put you in a much stronger position legally should anything go wrong," says Ivor.

"The contract should set out the contractor's responsibilities and obligations in detail, so that both parties are fully aware of what is expected. This should also cover any obligations you have towards them, such as providing the necessary information or equipment required to complete the job, as well as any relevant policies such as health and safety that may be applicable."

Businesses should also ensure that agreements also address the costs of the service provided and any additional expenses. If appropriate, you may also wish to consider incentive schemes for duties completed ahead of schedule, or penalty clauses for late or unsatisfactory work.

Review the work

Take the time afterwards to review the situation and assess the contractor's performance. "Don't just focus on what they could have done better either," says Ivor. "Take the opportunity to re-examine your contribution to the process and consider any changes that you might make for next time that would help things run more smoothly. Could you have briefed them better, or given them more guidance for instance?

"Even if you are entirely happy with the standard of service they have provided, still take the time to appraise their work and offer feedback. If you are keen to use them again, let them know - it could be the start of a great working relationship."

"Business development is vital to the survival of any business but it should not be achieved at the expense of the company's reputation," concludes Ivor. "If you decide that using contractors will help you achieve this desired growth, make sure you have a robust structure in place to manage and evaluate their performance."

<< Back