Tips From The Trenches for Outsourcing to Independent Contractors

Analyst firm NelsonHall recently forecast that business process outsourcing (BPO) will grow to a $450 billion market by the year 2021.

I’ve been noticing that small businesses are doing an increasing volume of outsourcing of project work and even certain parts of their business processes. It’s a strategy that helps you grow your business flexibly. You can increase your capacity and throughput, without adding fixed expenses that would be difficult to scale back.

But being smart about outsourcing is crucial.

So, I asked a number of savvy business owners how they successfully hire contractors. Specifically, I asked the question:

“When you use contractors (independent contractors/service providers) in your business, what is your #1 question you ask or tip you have for screening or choosing contractors?”

Below are the tips I received. As you can see, some opinions differ but it’s all valuable wisdom – there’s bound to be something you can apply.

Start out small

Jonathan Fleming, Elance buyer and Real Estate Agent in the San Francisco-Oakland Bay Area says, “Never pay before the job is done, pay in Milestones and keep in constant contact. Also, hire on a trial basis. During the trial, you are testing to see if you have found the magic candidate. Be sure to hire with the sense of it being a ‘try out’.”

Get a reference number

Tim Berry, Founder of Palo Alto Software and blogger at Planning, Startups, Stories says, “It’s like diet and exercise. We all know what we’re supposed to do, but we just don’t do it. And with contractors, that’s check references. Not just get them, but call them and check them. And ask about past clients who didn’t like them, and why not. And call every one of them.”

Taking any vacations?

Yvonne DiVita, President and Founder of WME Books says, “Everyone, on every project at Windsor Media Enterprises is expected to be the best and give the best. Consequently, we only choose professionals who are already delivering that quality of work and have client testimonials to show for it. The most important question then becomes, “What, if anything, might prevent you from completing this project on time?” That way we uncover pending vacations, or issues the vendor sees that we don’t. So far, that’s worked for us.”

Get a fixed price

Barry Moltz, author, angel investor, entrepreneur and Founder of BarryMoltz.com says, “Will you do it for a fixed price? I believe for many projects, a fixed price works better than an hourly rate since I can pay for a result. I can evaluate return by measuring the cost of delivering that result. I like to pay a deposit and then the balance upon completion of the project. I do not like to get into time based contracts unless the nature of the service makes it absolutely necessary.”

It’s all about chemistry

George Langan, CEO of eXpresso Corporation says, “References don’t matter! Sounds like heresy but think about it, when was the last time you heard or gave a bad reference? It’s all about chemistry, don’t do an interview – have a conversation, find someone that fits your work style. In today’s market there are lots of talented people in the independent contract world. It’s important to pick someone that has the same values and goals rather than “the perceived best in class.”

What went wrong?

Jonathan Fields, Founder of New York City’s Sonic Yoga who also blogs at Awake at the Wheel, says, “Tell me about a job that went bad.” This gets people out of their canned answers, reveals how they define a problematic relationship, demonstrates resolution and problem-solving skills and reveals more about what it’s like to work with them. All the other stuff, like portfolios and references are the easy ones.”

No flakes please

Robert Rutkowski, an attorney with Weltman, Weinberg & Reis and blogger at The Credit Union Blog says, “Honestly, the first thing you have to do when hiring an independent contractor is to make sure you’re not hiring a flake. The more you can find out about a person or company, the better. Check references, talk to people with whom the IC has worked and look at performance samples.”

Communicate with me

Ramon Ray, technology evangelist and editor of Smallbiztechnology.com says: “The number one question or tip is how much are they willing to engage me online and answer questions. I don’t know the provider at all and the more we can have an email dialog, the more they can answer questions in full and upfront, the more they show they GET what I want, the more I’m inclined to use them. Also, when someone follows up – that is an even BIGGER plus.”

Start small, rinse and repeat

Now finally for my own advice: “Try out freelancers or contracting firms on a small project before committing big. Even if you only have one project, do your best to break it down into 2 projects, with a smaller piece first. Not only can you assess the contractor’s work, but you sometimes discover you overlooked something in the vetting process: e.g., that you should ask a certain question or require a particular kind of work sample. This approach may seem counterintuitive, but it has saved me tons of frustration in the long run. Oh — once you find great contractors, treasure them!”

So now you have some tips for outsourcing and hiring contractors. What is your key advice? Share it in the comments below.

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Best Practices for Working With an Illustrator

For many people, purchasing illustrations or hiring an artist to create a unique image is a new experience. Because each artist is different and the client-artist relationship is critical to success, it’s helpful to have a few basic tips to refer to when you want to hire an illustrator.

Posting the Job

It is important to provide as much information as possible when posting any type of job on Elance, especially an illustration job. This is because the deliverable for an illustration job isn’t a static product, rather, an illustration is a manifestation of ideas and concepts that help tell a story in a dynamic and visual way.

Below are a few items to include in your job description. Keep these points in mind to make your job more attractive to potential artists:

Use Examples

Point to a clear example of the types of illustrations you’re looking for, and mention specific style examples in your job posting. Giving the provider more information up front will help eliminate confusion down the road and give a more accurate representation of the work you want completed.

Define Quantity, Frequency and Medium

Give the provider an idea of the number of illustrations needed and consider how frequently the final images will be used. Typically the more exposures your final image receives, the more the illustrator will expect to be compensated for their work. Be sure to also communicate where the images will be displayed – whether on the web, in print, or some other medium.

Define Ownership

Consider whether you’re buying a single use of the illustration or if you plan to retain all the rights of the image. If you are buying a single instance, the illustrator is free to resell the image for other applications. Buying exclusive rights to an image may result in a higher bid from the artist.

Communicate a Clear Timeline

Allow enough time for the illustrator to provide comps, revisions and final art. If you are leaving the creative interpretation to your illustrator, it’s best to provide additional time for multiple rounds of comps and revisions to ensure both buyer and provider are on the same page before the final art project begins. Making changes after the final art phase begins can be frustrating for both parties.

Set the Budget

When setting the budget for your project, consider all the factors involved in getting an illustration completed. Your illustrator will provide you with time, creativity, skill, and professionalism. If your budget is small, that’s not a problem, just be sure to clearly communicate the work you want completed.

Non-Disclosure Agreement

If you will require the artist to work under a Nondisclosure Agreement (NDA) or Confidentiality Agreement, it’s a good idea to state this in the job posting.

Reviewing Proposals

After posting the job, you are ready to receive and review proposals. Be sure to take some extra time to choose the artist – this is critical to getting the right illustration.

The illustrator’s portfolio, along with the communication you initiate during the proposal review process, should provide enough detailed information about an illustrator’s skills to allow you to make an informed decision about their abilities to complete your project.

Below are a few elements that will help you evaluate proposals:

Identify Style and Technique

When you begin to see proposals come in for your project, take some time to study the portfolio of work for each illustrator. Learn to look beyond the subject of the images to see if the style or technique you require is represented. Remember that some illustrators specialize in one unique style that they have refined and perfected, while others may have a variety of styles they produce.

Browse the Portfolio

A good portfolio will showcase an artist’s top work. This could be a full gallery of work or simply a few select pieces that brilliantly showcase the illustrator’s refined style. A good illustrator will frequently update their portfolio to keep it current.

Review Feedback

Review prior buyer feedback on each provider profile and let it help you learn more about the experience of previous customers.

Establish Business Terms

When you’ve narrowed your list down to one provider, be sure to discuss the business terms to reflect your deadlines and scheduled payments to the illustrator. This will help eliminate any confusion about money and timelines once you’ve started the project.

Collaborating

After you have chosen the provider that is right for your project, it’s time to start collaborating.

Make Contact

Once you have chosen a service provider and awarded the project, make contact with the illustrator as soon as possible. At this phase, it’s also a good idea to establish your preferred method of communication for the project and any key milestones. Will you meet via phone, IM or collaborate via PMB and email?

Exchange Information

At this point, you can provide additional reference items for the illustrator such as photos and web links, as well as the NDA or confidentiality documents. Some illustrators may also require a contract outlining the specific use of the illustration.

Provide Additional Specific Direction

Allow the artist to provide comps or sketches based on your initial conversations. Walkthrough the details to provide specific direction and requests. The more information you can provide your illustrator, the smoother the project will go.

Give and Get Feedback

Make comments and give honest feedback during the comp stage. Work out all the details to ensure all project needs are met before giving the approval to move into the final art stage. At this point, the illustrator will take the feedback and refine the art to meet the client’s needs. Typically, approval of comps and moving to final art is a key milestone where an artist would expect the release of a portion of the overall project budget.

Final Art

Now that you are nearing completion of the project, it’s time to take delivery of your final art. Once the project has moved into final art, most illustrators will limit revisions to one major change. The flexibility on the number or revisions, whether major or minor, will depend on the artist and the terms agreed upon in the proposal.

There are a variety of ways to have your illustration delivered. Most artists will be able to provide you with a recommendation for the best presentation method. If the work is digital and you have purchased all the rights, you should expect all the original working files. Generally, final payment for the work is due upon the delivery of final art.

Use Market Research to Help Your Business

Do you feel as informed about your customers and their needs, or about your industry and recent market trends as you want to be? It’s easy to stay up-to-date when you work with a qualified professional to do market research for your business.

Market research can provide you with valuable information to help drive the strategic direction of your business, and your business will reap the benefits:

  • Uncover new opportunities in the marketplace (e.g. additional sales or new markets)
  • Identify potential weaknesses of your business model, product or service
  • Measure your progress over time
  • Differentiate your product or service from your competitors
  • Understand who your customers view as your competition
  • Tailor offers to your customers

But before you start a market research project, here is a quick overview on how to structure the project to maximize your investment:

State Your Objective

What is your objective for the research? This will determine the type and quantity of research you will need to conduct. Make sure you have a well-defined objective before beginning your project.

Identify Your Research Method

Answer the question of whether you want Primary or Secondary research. How would you like the information to be collected and analyzed?

Primary research involves the collection of new data such as a survey of your customers. Secondary research involves information that has already been collected such as census data, or industry studies.

Also – look into the differences between Qualitative and Quantitative research and which works best for you.

Qualitative research is great for generating ideas because it involves in-depth interactions with a person or group of people. You can conduct interviews and focus groups allowing to ask open-ended questions and follow up to get the detailed responses you need for your research.

Quantitative research is great when you need reliable statistics because its based on numbers and percentages. You can put together a questionnaire and survey your target market to find out what they like or dislike about your product or service and get the results you’re looking for. 

Audience

Who is the target audience that you will be gathering research on? Who is the audience for the final deliverable, i.e., investors, employees or yourself?

Timeline

How soon do you need this research? Your timeline may impact your research method or vice versa. For example, if you need the research this week, qualitative research may be a good option. If your time horizon is weeks or months, a quantitative approach would work.

Budget

What is your budget? Primary research is generally more time consuming and more expensive than secondary research.

Other Considerations

Be sure to share any other information that you might currently have on your target audience or on the topics that you would like researched. This will not only help you define your research project, but will give your provider a good starting point.

Ready to Get Started?

Follow these steps to get your market research project completed on Elance.

1. Complete the project description with the following:

  • A detailed description of what you need to be researched and how it will be used
  • The type of research method you would like or you can have the service provider recommend the best approach 
  • How you want the research results delivered, electronic or hard copy

2. Once you start receiving bids, carefully review the provider’s qualifications and portfolio.

3. Choose a service provider and begin working on the project. The typical Market Research project will require the following steps.

  • Information gathering on the part of the provider
  • Initial draft of the questionnaire or a plan describing how the research will be conducted 
  • Information gathering
  • Compiling and analysis of the data
  • Final report on the results