HOW TO: Get the Most Out of Subcontracting With Freelancers

Shane Pearlman tweets about his misadventures in running a 100% freelance driven agency at @justlikeair.

Every person on a career path has a dream. Musicians want Grammys, startups want acquisitions and surfers want world titles. When I chat with freelancers, the most common aspiration I hear is, “I want to partner up with other freelancers to take on a bigger project and build a company.” When running an agency in today’s new economic model, you are bound to end up using independent contractors in your business. If that is in your plan, how do you get started successfully? How do you transition from a one-person shop to a team using other freelancers?

When Does it Make Sense?

When should you use a subcontractor? The answer is in the definition: A person who offers his or her time and skill over a limited engagement in exchange for compensation to multiple parties. Either you are too busy and need help (time), want to take projects outside your specialty (skill) or need to adjust your team to improve work cycles (limited engagement).

Time

How do you know when it is time to subcontract (or raise your rate)? The answer is simple: when you are extremely busy. You are turning down 50% of legitimate opportunities and are booked solid on great projects for months with a reasonable to high rate for your niche. Simply put, you have projects for people to work on and are personally out of time.

Skill

Bigger projects typically address more complex problems and require a wider range of skills. While you might be a master designer, have serious HTML/CSS chops or have people banging down your door for SEO lessons, there’s likely something you can’t or don’t want to do. Some of the best subcontracting relationships are between people with complementary skills. Designer + developer + content creator = a higher quality complete web product. Figure out where you are most effective, and keep that for yourself. Then find good contractors to tackle the rest.

Work Load

One of the greatest differences between a contractor and an employee is control. You can tell an employee when and where they need to be available. Of course, you have to pay for an employee’s time, even when they aren’t producing. Nothing is more painful than paying people to play Angry Birds during those valleys between projects. If you have work that is intermittent, seasonal or temporary, then freelancers are a great fit.

During our sales process, I warn our clients, “We are terrible at on-call support.” If you call me and need something immediately, I’ll ping our network. If someone happens to be available, great, we’ll do it. But, we work exclusively with freelancers, which means we can’t tell them when to be available. It is not typically an issue with advanced notice, but there are projects we turn down because our business model simply can’t provide a win for the customer.

Perspective

Sometimes, you simply get stuck. If you are lucky, the problem is small and you can tap your community for an answer (co-workers, Twitter, Facebook, Quora). Other times, you need an expert who hasn’t been staring at the same issue for the last three months. Bringing in fresh blood for a quick infusion of new ideas can be a huge help.

Freelance Isn’t Free

None of the factors above point to cheaper labor. While a well-managed team of contractors could save you money (since in theory you pay for productivity rather than presence), it is not a plan you should count on. Look for value beyond cost. We rescue many outsourced projects from companies that went with the cheap option, thinking it would save them short term dollars, when all it caused was long-term headaches.

Picking Your Team