Hiring a subcontractor is a great way to pitch larger retainers and get more balance in your life. That’s assuming you’ve got the right talent on board. Before you introduce your clients to an additional team member, here are some things to consider to ensure the relationship is successful for everyone involved.
Hire people you know
Hire only people you know, or freelancers that come highly recommended from senior professionals that you trust. Ask the right questions about their experience in communications, freelancing, and how they manage their own clients.
Require experience in the client's industry
Make sure the contractor has enough relevant experience in communications and the client’s industry so they can run with assignments with little to no supervision. Extensive learning curves cut into your profitability and put your business at risk.
Don't split tiny budgets
Only put a subcontractor on accounts with retainers that are large enough to make it worthwhile for both parties.
Be the primary point of client contact
Be the lead on the business. When a client hires you, it’s not right to sub out the work to another freelancer. Some contracts prohibit this activity. Make sure you remain the primary client contact, and drive the work with the subcontractor playing a supporting role.
Clearly define team roles
Clearly define each team member’s role on the account at the onset of the client engagement so there’s no confusion about responsibilities.
Give subcontractors a dedicated email address
Add subcontractors to your email system so that all messages to the client come under your company’s name. This presents a united front to the client and a more polished look for your business.
Tell them how and when they'll be paid
Let the subcontractor know if they’ll be paid as soon as you receive an invoice or if they’ll have to wait until the client pays you.
Get tax forms completed before sending the first paycheck
Always be prepared for tax season. Before you issue the first paycheck to a subcontractor, get a completed IRS W9 form from them. At the end of the year, your accountant will need to send them a 1099 tax form.
You’ll also need to include the subcontractor on your taxes.
Don’t assume that 100 percent of the subcontractor’s earnings are tax deductible. For example, if your billings were $50K and you paid $10K to a subcontractor, your taxes are based on $50K — not $40K. Depending on how much you earn, this could make a difference. Like any tax related information, always check with your accountant to confirm and clarify details.
It’s exciting to build your own business. Just be sure to have the proper framework in place so you can achieve your goals.