Using Subcontractors – the Dos and Donts for IT Consulting Firms

Your IT business is starting to grow. It’s still a bit quiet occasionally, but at other times you’re finding the workload a bit much. You don’t want to employ someone full-time, but someone part-time for specific tasks, depending on their expertise, may be useful.

It is a good idea to get together a team of subcontractors BEFORE you need them, with different skills. If you wait for the first project where you may need help, you could find it will take too long to find the RIGHT subcontractor for the PROJECT.

Check the references of any subcontractors who apply. Contact IT consulting firms they have worked for. They are representing your business. You also want to make sure you will not be spending more time fixing up their mistakes than if you did the work yourself. Remember, you are paying them. They need to be high quality.

When you have decided on the subcontractor(s) you’re going to contract, get the paperwork done before you need them on a project. A contract between you and the subcontractor is essential and you should include a non-compete clause – you don’t want them stealing your business. A non-complete clause means that they must represent your company in any contact with the client and not be trying to arrange future work with them.

But if you have any doubts about a subcontractor, even if their resume is impressive, it is better to trust your gut feelings. You don’t want people who will make your business – and your life – more difficult.

Negotiations of payment are crucial for the subcontracting arrangement to work well. You can either pay upfront or wait for the client to pay you. Perhaps if you pay upfront it may be a lesser amount. You will need to consider your cash flow situation. Be especially careful of using a subcontractor for the first time. If they are reliable and their work is good you may able to trust them with an upfront payment.

Always agree upfront what you will pay the subcontractor, and get it in writing with both of you signing. You don’t have to tell them how much the client is paying you. If you want someone with high quality skills and experience you need to be prepared to pay for it. Do some research into what subcontractors are being paid. Work out if this will fit into your budget.

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 keep a signed copy on file. Also give them any project specific instructions, and obtain a signed copy from them.

You must maintain an active role with the client and keep in regular contact. Keep a high profile and make it known you’re using subcontractors at the outset. Some clients may not like you outsourcing your work, in which case you should either undertake the work yourself or not take it on at all.

Gregory Fitzgerald
http://www.getsomebodynow.com. au/

Greg Fitzgerald is a freelance writer who has produced this article for Get Somebody Now, the online database of IT contractors and consultants. Go to http://www.getsomebodynow.com.au for more examples of Greg’s work.