When your company needs work done by an outside source, you might be wary. There are horror stories about independent contractors who have burned companies. But there are a few things to keep in mind if you want to avoid the same fate.

1. Compensation

One of the easiest ways to ensure the work gets done as promised is to pay your contractor by milestones. As agreed upon stages of the job get submitted, you pay them. This is great for both the contractor and you, as it builds trust.

2. Background

Getting to know who you’ll be working with is important. Request their resume and check references. If they are working with your finances or other sensitive information, you may want to do a background check.

3. Follow Through

With any contractor, there needs to be some level of accountability. You want to ensure that the product or service they’ve provided holds up over time. Create a check-in schedule. And make sure you have abundant contact information for your contractor.

4. Back-Up Plan

What happens if the product or service stops working after a week? Having a back-up plan in place is critical to keeping your business running. Make sure you know how – and how long – you can rely on your contractor to fix any issues. 

5. The Law

It’s essential to make sure you are following the laws of your state when looking to hire. The IRS requires a W-9, and if you pay your contractor more than $600 in a year, you must provide a 1099-Misc. There are also laws specific to whether your hire would be considered an employee or an independent contractor, so be sure you’re aware of those differences. 

6. Contracts

You should always have a contract with your independent contractor. It should outline all of the above considerations. Contracts are a safe way to ensure that all of the above tips are put in place.

For more tips on running a successful business, or to seek financial support, reach out to Overhead Capital Ltd.