How To Run a Contractor Supported Profitable Business: 8 Battle-Tested Tips

The gig economy is real.

More and more people are either quitting their jobs or building side hustles and selling their expertise.

So the talent from across the world is accessible to anyone who seeks it. And by tapping into this talent pool, one can build a highly profitable business without many overheads.

Here is how you can build one supported by contractors or freelancers. You can also do a hybrid model when you have full-time employees supporting your ongoing business and contractors to help you through growth phases when in-house talent is not enough to support sudden growth.

Here is how do to do it right

1/ Work on high-value projects where you have room to explore and experiment and invest more money than usual for this exploration.

2/ Choose contractors who can do good work and are not the cheapest. Because you get what you pay for. For those in the middle pricing range, the gap between mid-range and high-priced talent is usually not that much.

3/ Don’t do rush jobs because you’ll have to deploy multiple people on unreasonable timelines. That always turns out to be costly.

4/ Overtime, cultivate a pool of people you work with. Work with them again and again. That only happens when you have a small set of solutions you offer to your clients, and you get that kind of work repeatedly. If you go wide and try to do everything just because you have the talent available, you won’t be able to build this kind of relationship.

5/ When hiring freelancers and experimenting with them, choose at least three or four so that you can get two to work with you on a pilot project. Not every one will work with you when you want even when you both want to work with each other. The reasons for this may be expectation mismatch (they are not able to deliver on your time), or schedule mismatch (they are not free when you want them to work).

6/ Always break your big project into small tasks and give those small tasks to test first. That way, you don’t waste resources and time. Anyway, out of your selected pool, hire people one by one. Give them a tight timeline, ask to deliver in no more than 2-5 days for a small task out of the project. Good if you turn lucky the first time. It may not always happen, so you can go with the next person. Tight timelines are essential because you want some room to try others if the first person does not work. And you also get to understand their capabilities and see if they have the bandwidth to support your kind of work if you decide to go ahead with them for the entire project.

7/ When deciding on the investment, instead of sharing a budget, ask for the investment. Know the range that allows you to remain uber profitable. If a freelancer offers in that range, accept it. If it is out of your range. Counter if they quote high. 

8/ And, this last bit is super important. Identify contractors on popular talent marketplaces like Upwork. Work with them there only at least for the first 5-10 projects. It helps because on these marketplaces, the contractors have a reason to keep their reputation high and deliver when promised, and platforms like Upwork put your money in escrow, so until they deliver your project, they are not paid. It also safeguards the freelancer because the payment is already there in escrow. If you are working with a freelancer outside and if they are not introduced to you by a trusted source, they have no reason not to ghost you in the face of the deadline for projects they are already working on. So, choose wisely and in the right place.

These things have worked for me over the years. Your mileage may vary. I still thought it’d give you a valuable perspective.

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