Although outsourcing offers many benefits to small business owners, some are reluctant to try it due to horror stories they have heard from others. While no business transaction is entirely problem-free, creating a contract before starting a working relationship can help things go much more smoothly. If you’re looking for ways to make your next interaction with an independent contractor more mutually beneficial, we offer three important tips below.
Make Milestone Compensation Part of the Contract
Paying in advance for work that may not meet your quality standards is only asking for trouble. On the other hand, independent contractors need some guarantee they will receive prompt payment for their time and efforts before starting the work. One way around this is to use a payment system that is fair to both parties known as milestone compensation. This means that you pay for work as the contractor completes it and you confirm that it meets your quality standards. After negotiating the terms, be sure to put them in a written contract that both parties sign.
Backup All Critical Systems
When it comes to business, there’s no such thing as too much redundancy. Even when you invest in outsourcing for systems work, make sure that every system has a backup in case of a critical loss of data or a problem with the contractor’s work. The very nature of outsourcing means that the person you hired to work on a system may not be available to fix it if a problem arises later.
Insist on Accountability
Although independence is a major draw for people to begin working as contractors, that doesn’t mean they shouldn’t be accountable to their clients. When preparing a contract, include language that makes it clear the contractor has an obligation to ensure the product he or she delivered to you continues to work as expected after delivery. One way to include this in the contract is by specifying that you pay lower fees if the product stops working as expected.
Are you ready to start outsourcing but need more tips? Schedule a consultation with Fast Commercial Money today.