(Source: NordWood Themes, Unsplash)
Building up the customer base, hiring, and searching for a product/market fit before even pitching a VC can be challenging. You probably don't have resources to hire top-tier business development people — well, you don't even have the Chief Inspiration Officer yet. You do most of the things on your own, from writing code to designing ad banners. This may be the perfect time to consider hiring your first independent contractor.
Who or what is an independent contractor
An independent contractor is either an individual or entity that performs work or provides service to another entity under contract and is not controlled or influenced by the client. To qualify as an independent contractor, the individual must not be controlled by the client, be free to use his or her judgment to then use the necessary methods required to deliver to the service or work as agreed upon and to be responsible for the result in accordance with the terms of the contract.
Additionally, the client is not responsible to the third party for any legal wrongs such as actions of tort which are independent to that of the contract on behalf of the independent contractor unless the client has authorized the contractor to do so or where the actions of the independent contractor are controlled by the client. The client is also not responsible for providing social security or medical benefits such as insurance.
Independent contractor vs employee
There are several differences between the status of an independent contractor versus that of an employee.
An employee is covered by employment law whereas a contractor is not. Also, the employer has more control over the means and resources provided to the employee to complete the necessary work whereas the client has limited to no control over the means and resources needed by the contractor to get the work done.
(Source: Bruno Cervera, Unsplash)
Benefits of hiring an independent contractor
There are numerous benefits to hiring a contractor. Firstly, it is the best way for a startup to save money as hiring an employer comes with numerous costs such as worker’s benefits and a salary.
Also, if you already have workers and they are all overwhelmed with tasks and you have deadlines to meet, you can hire a contractor to improve efficiency and rehire them when needed. As the independent contractor has a particular set of skills, you can reduce training costs as they already have the necessary skills to get the job done.
Additionally, you reduce your exposure to lawsuits as employees have numerous rights under the law and therefore can bring numerous claims if these rights have been violated. Contractors are not covered by such laws and therefore can’t bring such claims against you.
Hiring independent contractors abroad
One of the challenges for startups is keeping costs in control. Working with foreign talent can be a great way to reduce operational costs in the early stages. Platforms such as AngelList and F6S are great places to find tech talent.
Stuff to read:
Remote Work Doesn’t Scale … or Does It? by Adam Schwartz
How to Pay Independent Contractors & Remote Employees by Dave Nevogt
The Ultimate Guide to Remote Work by Wade Foster and the Zapier team
Why Hiring Remotely Will Prevent Your Failure by Nitesh Agrawal