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How start-ups can benefit from using contractors

Business

How start-ups can benefit from using contractors

Candy’s Customized Candies, a high-end chocolatier that sells made-to-order boxes of various chocolates, has opened, and your customized candy boxes have been selling like hot cakes. However, while you designed the website using an online site builder, you want to increase the functionality of the site so that customers can arrange their own candy boxes to order, as opposed to emailing in the order. You need someone to not only build the site but also maintain it. You could hire someone full-time to do this, but the site would only need maintaining infrequently. One solution is to hire an independent contractor (IC) as there are a number of benefits.

Businesses often find themselves doling out projects to people who work full-time but not necessarily getting the expertise needed for the projects. Staffing can be problematic for a business requiring a specialised skill, and this is one instance when hiring an IC would be most appropriate. For one, while a core group in a business functions for a particular purpose, sometimes the project requires higher content knowledge in a specialised area. Businesses have two options:

  1. They can hire an IC on their own and hope that the person has the expertise and professionalism to complete the work on time, and expertly.
  2. They can hire a contractor through an umbrella company, a company that acts as an intermediary between the client and the contractor. These companies are more than just a go-between; they also serve as a resource for both contractor and client, providing help with IR35.

Proprietors with no experience in the area or those uncomfortable with hiring an IC on their own would probably get better results going through an umbrella company.

With ICs, the proprietor has more flexibility in staffing projects as opposed to hiring a full-time worker. A business can hire as many contractors as needed as business fluctuates. Also, because ICs command their own schedules, the work can be completed depending on the terms of the contract, which allows companies to control the duration of a project. Businesses can hire ICs on short notice, even when the project is large.

Businesses also save money in the long run when hiring an IC as these contractors are paid for services rendered. Additionally, ICs are not full-time employees, so they do not receive benefits that full-time employees do – for example, no PAYE or National Insurance Contributions. An IC, on the other hand, gets paid a flat rate. With ICs, businesses reduce the incidence of lawsuits as it relates to labour laws. All employees are protected by labour laws, and because contractors work independently, they do not fall under this category of worker.

The IC workforce is a great resource for hiring and retaining good professionals with specialised expertise. Cost savings as it relates to hiring and retaining employees and flexibility in staffing are two of the main reasons why ICs are beneficial to industry. Ultimately, businesses benefit in receiving a valuable service without the risk of liability.

I am the founder of Startup Today. I am the main writer and have put in many hours of work into creating this blog. If you want to find out more about me then lets get in contact.

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