What Does Your new company have in common with IBM, Exxon and even Disney World? There are certain basic functions that must happen for the business to operate--functions like production, marketing, sales, customer service and administration. You can either do everything yourself, or hire others to help. Solo operations can be very effective and profitable, but if you choose to go the latter route, you'll need a strategy for building the human side of your organization. Your options include the hiring of full- and part-time employees, formal outsourcing, and the use of independent contractors on an ongoing or per-project basis.
Reed Boardman, president of Media Services and Production Group in Orlando, Florida, says that how you provide for personnel depends on what you want to accomplish. "Ask yourself what your objective is," Boardman says. "Do you want someone whose first priority is the success of your company, or do you just need someone to provide a repetitive, routine service?"
Throughout his entrepreneurial career, Boardman has used a combination of employees and independent contractors. Employees, he says, tend to be more loyal and have a stronger interest in building and protecting your company. However, for an employee relationship to work, the commitment must be mutual; you must be willing to invest as much in your employees as you want them to invest in your business.
By contrast, independent contractors working on a per-project basis may be able to turn in a satisfactory performance, although they will usually have other clients to serve as well, and may not share your level of dedication to your business. Even so, this type of outside resource often offers a level of expertise and cost-effectiveness that may be difficult for a small company to achieve in any other way.
Dr. Charles Toftoy, associate professor and director of the Center for the Advancement of Small Business at George Washington University in Washington, DC, says that before you choose between employees and independent contractors, you need a clear idea of what you're looking for. Consider these aspects of each task:
- How much actual work is involved?
- What skills does the job require?
- Is the job an ongoing process or a short-term project?
- What is your budget?
- How much creativity and commitment do you expect from the person performing the task?
- What degree of control and supervision do you want over the job?
Then match your answers to your options, and begin your search for the resource that is most appropriate for your situation.