There may be times when you will take on more work than you can handle, or you will need assistance on a wide variety of functions, which is where sub-contracting comes in handy. Sub-contracting some of your work to others doesn’t mean you don’t know how to run your business. On the contrary, hiring sub-contractors is an excellent way of growing your business because you can take on more capacity in terms of work and the types of services you offer. But it’s important that you consider the risk that this brings to your business. Having a sub-contractors agreement in place is the best way to achieve this.
Also, by sub-contracting tasks to others, you can free up time to concentrate on other important matters and grow your business. Often small businesses hire a sub-contractor because it costs them less than hiring someone full-time, but they mainly do so because they don’t have a worker who is skilled enough to complete a specific project.
However, you need to make sure that you are protected in relation to the work that any sub-contractor performs on behalf of your client. The best way to do this is by way of a subcontractor’s agreement.
But first, let’s find out a little more about sub-contracting.
What is sub-contracting?
Sub-contracting, which is sometimes referred to as outsourcing, is hiring other contractors to help with client work. Sub-contractors are either individuals or companies who take on outsourcing projects, mainly on a freelancing basis.
Small businesses usually hire subcontractors to perform a variety of tasks, mainly because they don’t have someone on the inside who is specialised for a particular job. For instance, as a small business, you may need to hire a graphic designer to help you.
But it goes without saying that when subcontracting some of your work, you may lose quality which can cause issues with your end client. To stay on top of things, it’s best to take steps to ensure your business stays protected. One of those steps is signing a subcontractors agreement.
Can you subcontract some of your work?
Unless the contract between you and your main contractors prohibits outsourcing altogether, then you are allowed to subcontract some of your work.
Sub-contractors agreement
Whether you are looking to use a sub-contractor, a consultant or a freelancer once or repeatedly, it’s crucial your business remains protected. In doing so, you will need to give your sub-contractors clearly defined responsibilities and instructions on what they will be working on.
You should include these specific guidelines in a subcontractor’s agreement. It will mean your business and business relationships are protected should something go wrong down the road. Here are some of the key terms to include in a sub-contractors agreement.
- Scope of work and performance criteria
- Intellectual Property Rights
- Fees and Payments
- Right to sub-contract
- Renewal, Cancelation and Termination
- Warranties, Indemnity and Insurance
- Liability
- Confidentiality
- Data Protection and Processing (if required)
- Non Solicitation
However, regardless of a signed sub-contractors agreement, you could still come across subcontractors who work in an unprofessional way. This could leave you with an even heavier workload trying to clean up the mess. It may even result in a damaged reputation. Needless to say, this is a reason not to look for cheap options and to do as much research as you can to find reputable and reliable sub-contractors.
We know that sub-contracting can be challenging at times, which is why we drafted a template that consists of the major key points a subcontractor’s agreement should have.
If you have any questions about sub-contracting and the legalities around it, don’t hesitate to contact us. You can even book a 15-minute Zoom call by emailing us at kirstyandkateconsulting@gmail.com.