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What to Know Before Hiring a Freelancer

Use these 6 tips to get the most from temporary talent.

­­Want to build a successful company--and pull it off without any employees? Brad Chase, 28, is living proof that it can be done. He started Progressivehealth.com, a Boise, Idaho-based retailer of health supplements, in 2003; he projects year-end sales to reach $800,000 to $900,000; and he has almost solely relied on the skills of freelancers. It may sound impossible, but with abundant layoffs, shrinking retirement funds and a growing number of resources that connect businesses with freelancers, accessing a qualified work force is easier than ever.

In search of freelancers? Check out these sites:

. Elance: one of the more established sites; covers professionals in industries ranging from web and programming to engineering and manufacturing

. ScriptLance: specializes in freelance programmers

. Craigslist: not as structured, but a good way to reach candidates

. Project4hire.com: a good resource for web designers, graphic designers, coders and more

. WALSAQ: A newer site covering everything from administrative support to real estate
According to Kelly Services Inc., a temporary-services staffing firm, about a quarter (26 percent) of the U.S. working population is now working as free agents, up from 19 percent in 2006. But before you tap in to this growing talent pool, consider these tips from Chase and Leslie Stoner, director of product development at Kelly Services.

  • Create a list of your needs, your goals, the skill set required, the education and experience you desire, and whether you want to pay the individual by the hour or by the deliverable.
  • Determine a fair rate of pay by reviewing job boards along with the rates at which people are accepting projects.
  • Know the difference between an independent contractor and an employee. "Just because someone says, 'I'm an independent contractor,' don't say, 'Great. Sign the contract, and we're good to go,' because you're putting your organization at unnecessary risk," Stoner warns. For more information on the differences between a contractor and an employee, visit the IRS website and consult an attorney.
  • If you prefer to find freelancers on your own rather than through a temporary-staffing firm, pay careful attention to reviews left by others, advises Chase, who believes one bad review is enough cause for concern.
  • Don't always use the same talent. "If you have a new job and you liked an old provider, post the job and invite them to it," Chase says. "This keeps their price competitive, because others are bidding on the job."
  • Be cautious about paying freelancers directly through PayPal. In some cases, the freelancer is no longer accountable, Chase cautions, because this eliminates the possibility of writing a review.

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This article was originally published in the June 2009 print edition of Entrepreneur's StartUps with the headline: What to Know Before Hiring a Freelancer.

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