How to Use Subcontractors for Growing Your Service Business


Has your business grown so successful that your company can no longer manage all the work alone? Do you currently have issues finding or keeping staff? Are you looking for new ways to increase revenue while cutting costs? If so, then you’ve got to hire subcontractors. Subcontractors can help you increase your retention while reducing your costs of doing business.

In today’s post, I will explain how you can scale your business by hiring subcontractors, along with explaining the benefits of outsourcing your work.

Are you ready? Let’s dive in.

How Subcontracting Works

For those of you who don’t know, subcontractors are people or companies you can hire to outsource your work.

Subcontractors have a direct contract with you, not your client. This means your subcontractor receives his payment directly from you, not your client.

So you keep making profits as long as your client pays you more than you pay the subcontractor.

Why Hiring Subcontractors Is a Smart Choice

Hiring subcontractors is a smart choice because it has a boatload of benefits, among which the obvious one is you can handle more clients by outsourcing your work.

But there are some not-so-obvious benefits to subcontracting and here are the 5 most important ones:

1. Flexibility

Every industry has periods of growth and contraction. Subcontracting allows you to adapt to these varying circles of demands.

When you hire a subcontractor, their contract ends with you as soon as their assigned project is completed. So you don’t have to lay off workers.

Furthermore, when you get too much work, you can ramp up your staffing quickly by hiring subcontractors.

2. Reduce Overhead Costs

Companies that hire subcontractors don’t have to worry about paying for equipment, employee benefits, and office space for permanent workers.

So by subcontracting, you can reduce your overhead costs and increase return on investment significantly.

Furthermore, you get to hire less costly workers from less expensive countries around the world.

For instance, if you’re providing a landscape service, you can hire subs from local companies to do tree trimming to save a significant amount of money and time while making a margin on the service.

3. Subs Provide Expertise

Expert subcontractors have years or even decades of experience working in their field. So, they may have a lot more expertise to offer than you or your employees.

Since they’re more seasoned, they can get the job done not only more quickly but more efficiently as well.

However, you get to enjoy these benefits only if you hire seasoned experts. In the saturated market of today, there is a fair share of amateur subs that won’t do your business any good.

4. Increase Productivity

Increasing productivity is perhaps the biggest benefit of subcontracting because you get to assign the mundane tasks to the subcontractor.

So they handle all the boring stuff. Meanwhile, you and your staff get to focus on the core needs of your company for scaling your business.

5. Fewer Legal Obligations

According to state law, subcontractors are the owners and operators of their own business. So they are not entitled to the same legal protection as employees.

Furthermore, you (the employer) don’t have to send payroll taxes or deductions to the government, as you would for a hired employee.

Where to Hire Subcontractors

Subcontractors are literally everywhere. You can either ask around for them in your local area, or hire a vetted company nearby to do the service.

If you want help finding a subcontractor or managing all your work and subs, contact Nektyd – Nektyd helps connect companies to subcontractors while helping you manage the service, workers, and clients.

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