Ten Secrets to Small Business Success - Use Contract Labor

First, let me be clear. You should consult your attorney or tax professional before you hire anyone as a contractor or employee to find out what is right for you and your business situation. That being said, unless you are in an industry where it just can't be done, you should use contract labor whenever possible. The benefits of hiring a contractor instead of an employee far outweigh the risks.

Many years ago I grew a simple idea into a multi-state, mutli-location business in less than ninety days through contract labor. My competitors gladly went to work for me, giving up some of their profits and a lot of their headaches. They preferred to do the work and let someone else manage the business. That's because many small business owners start their business by firing their current boss. They are skilled at a task and they gain the trust of a few customers. Believing it must be easier to own the business than it looks, they venture into the enterprise never understanding that labor is far different from management.
There are generally two reasons entrepreneurs and small business owners don't use contract labor. The primary reason they don't use contractors is they simply don't think about contract labor as an option. Most business owners have worked for someone else prior to launching their enterprise. Having been an employee, they naturally think that hiring employees is part of the businesses ownership experience. Of course it doesn't have to be that way. Many business owners manage huge enterprises and multiple locations successfully by using contractors to render the services they provide.

The second reason small business owners and entrepreneurs don't use contractors is the perception that by using a contractor you loose control of the task. Nothing could be further from the truth. You may lose control over how the work is performed, but you never lose control over the final result. As the business owner, you are always responsible for the end result, and using contract labor doesn't change this fact.

For the little control you'll lose by using contractors, you'll gain much more. Contractors deliver a result for a fee while employees sell you their time for a fee regardless of results. Contractors are responsible for their time and taxes while you will be responsible for the time and taxes of employees. With employees, you will be responsible for numerous reports and will be required to comply with countless governmental regulations. With contractors your obligations are far less.

Again, contact your attorney or tax professional before hiring a contractor or employee to determine what is right for you and your situation. But strongly consider contracted labor to facilitate the growth of your business before you hire an employee.

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Ten Secrets to Small Business Success - Use Contract Labor