How To Subcontract Work To Grow Your Business

By October 7, 2007 Uncategorized 13 Comments


When you’re running your own business from home, sooner or later you’ll realise that your income is limited by the number of hours you can physically work per week. What if you had a team of subcontractors working for you? Just think how many more clients you’d be able to assist and how much your business would grow. Here’s a question I received from a prospective VA about this very subject:

“I would like to sub-contract work out, even have a small team of girls that can work for me. Ideally, I would like to generate business and really work on the Marketing whilst the admin work is done. Of course, this will take time and I am able to do the required work also – but my vision is to have a VA team of girls. I don’t know how to handle the payment side. As I am working full time – I would like to have a couple of girls on standby when work comes in rather than lose it – I want to be able to offer fast turn around times. When you have had a large work load and outsourced how did you go about it?”

Here are my thoughts and experiences on subcontracting:

Having a vision and plan in place to grow your business is an excellent idea. As a solo business owner, there is an upper limit on the amount of income that you can earn. There are only so many hours in the week that you can assist clients, and take care of your admin and marketing tasks. If you build a team of VA’s that you subcontract work to, then you’re leveraging their time and of course, can enjoy an increase in income. You also get more time to market your business and attract more clients. It’s a good way of offering additional services to your client, if your subcontractors have different skills to you.

You would negotiate an hourly rate with the client, and then pay the subcontractor a lesser amount, so that you profit from the arrangement. This is to cover your time and marketing costs, because your role is to find clients and interface with them, while the subcontractor simply receives the work and completes it.

Why would there be Virtual Assistants who are prepared to receive a lower hourly rate by being subcontractors? Well, some VAs are happy to do this as a way to kickstart their businesses, and also not have to worry about the time and expense involved in marketing themselves to get the business. Some VAs do a combination of subcontracting and also have their own clients.

You also need to draw up a subcontractor agreement and have it checked by a lawyer. This will cover terms such as hourly rate, terms of payment, confidentiality and so on. You also need to include a clause saying that the subcontractor will not get paid if the quality of the work is substandard. Your lawyer will be able to help you with the exact phrasing and terminology here.

You invoice the client and receive payment. Your subcontractor invoices you for their time, and you pay them. In an ideal world, you don’t pay the subcontractor until you receive payment from the client.

It can be a lucrative arrangement but as with anything, there are some pitfalls to watch out for. Firstly, the skillset and reliability of the VA’s on your team. You’re ultimately responsible for meeting deadlines and for the quality of the work that leaves your business. You’re adding other elements into the mix now, it’s no longer just you.

What happens if there’s a deadline and you miss it because the VA you’re working with is unreliable or gets sick? The client isn’t going to be very interested in your excuses. They just want the work done. Or what if the document comes back to you and is full of typos? That’s why you have to be responsible for checking the work that comes back to you, before sending it on to the client.

Always have a contingency plan in place. Will you have the time to complete the work if for some reason your subcontractor can’t? Or is there another subcontractor that could possibly complete it instead? You have to be good at juggling many things at once when you’re subcontracting your work out to others.

Communication is another important aspect. Are you good at letting others know what you want and what your clients’ expectations are? Don’t expect your subcontractors to be mind readers. Are you good at giving feedback, positive and negative? People need to know what they’re doing right and what they’re doing wrong.

I’ve had some great experiences subcontracting work, and also some very bad experiences. It’s fantastic when it runs smoothly, and you can reap the rewards. However, when the client is breathing down your neck and you have no clue when the work is going to get done, then it can lead to quite a few sleepless nights!

I’ve also been on the other side of the fence. In the early stages of my business, I was a subcontractor to someone else to kickstart my business. It didn’t work out because the person subcontracting to me was not familiar with the software themselves i.e. they didn’t know Powerpoint at all, and so they could not really communicate the clients’ needs very well to me. I also felt that I could easily earn more by finding my own clients, and so that’s what I did. I found it much easier to liaise directly with the client to find out their requirements, rather than go through a middle man.

I think the best way to go about subcontracting is to START OFF SMALL. Outsource a few small projects such as formatting / typing a short document – nothing too major. Get a feel for how you and your subcontractor work together, how reliable they are, how good the work is. There’s no point in outsourcing if you end up spending hours correcting the work.

Be prepared for problems and obstacles. Things may not run smoothly but then again, when it does work out, there’s no better feeling. Let me know how you get on and ….. good luck!

And if you have any thoughts or personal experiences on this, please add a comment!

13 Comments

  • Linda Bryan says:

    Lisa:

    I read an article by another veteran VA that suggested referring clients to another VA for a particular project and getting a referral fee. She has a pool of VA’s with a variety of specialties that she does not have that she refers clients to rather than try to do the job herself. That way the client and the VA communicated directly and the VA can be clear on the client’s specific needs. Is that too risky? Do you stand the chance of losing the client to that VA? What kind of agreement would you need (in writing) to have with both the client and the subVA?

    Since I am just starting out, I would like to be considered for some of the “outsourced” work. I would like to know how and where to network with the established VA’s to get small projects from them. I currently work full time as a paralegal/bookkeeper for a firm of four attorneys in various legal niches. Any suggestions?

    Linchi

  • Laura says:

    Lisa,

    What a great answer! I’m thinking about this actual process at the moment. Where do you suggest finding people to outsource to?

    Regards, Laura

  • Alice says:

    I strongly suggest,that one should start out small .And then if the person gets loads of work then hire subcontractors.For me I would have aleast three subcontractors. Two of them would look for clients, one would do proofreading before sending it to me.I would doble check and then send it out to my clients.

  • Jocelyne says:

    Hello,

    I am in the process of starting my VA business and I would certainly be willing to subcontract work for a VA just to get me into the beat, help me survive while I am trying to get my business up and running and to learn the ropes while I am doing it. I can forward my C.V. to anyone who needs help.

    I was doing administrative/coordinator work so I am familiar with:

    Excel, Word, Acc Pac, Simply Accounting, Data Bases, Outlook Express, 3Web and more. I am willing to learn other software.

    I can do data entry, receptionist, bookkeeping, typing and much more.

    Thank you for reading me. Good luck on your new projects.

    Jocelyne

  • Primo_Cosmo says:

    Shame on your intent to have an all female staff. Calling them “girls” is abominable, too.

    Sexist, indeed.

    Once knew a female who only hired females in her office. She was promptly sued by a male who applied for a job listed in the newspapers.

    The owner lost a huge sum of money, and her business.

    I, too, was discriminated against by a law firm that only wanted females on their staff.

    I sued and collected big time.

    So, sexists, have at it. If I find out who you are, you better believe I will apply for a job and collect for your discriminatory gender practices against me.

    I’ve been a independent and subcontracting VA, or PA, or whatever it is being called, since I don’t know when (middle of last century is a hint).

  • Lisa Taliga says:

    Hi Linchi (and Laura – I answer your question here too)

    The difference between subcontracting work to another VA and passing on a referral is this:

    - when you subcontract work you are still the main point of contact with the client and they remain your client.
    - when you pass on a referral you effectively ‘give’ the VA that client. From then on, you’re out of the picture.

    Re: passing on referrals in return for a fee, yes you can certainly do that, as a way of covering your marketing costs for getting those clients in the first place. Alternatively, you can just pass on referrals as a way of doing a good deed and maybe one day that VA will pass you a referral too.

    Re: networking with established VAs online, there are numerous VA networks that you can look into such as A Clayton’s Secretary.

    Join forums where established VAs hang out. Try not to email them straight off the bat asking for work. It’s best to build up a relationship first, and get a feel for how busy that VA is. They’re much more likely to pass on work to you if they’ve got to know you first.

    Good luck!
    Lisa

  • Lisa Taliga says:

    Hi Primo Cosmo

    You make an excellent point here. Many of the people who read and subscribe to this blog are men and certainly Virtual Assistants are not all women, nor should they be.

    I copied and pasted that question into my blog without really thinking about the use of the word ‘girls’.

    I’m pretty sure that the person that asked me that question didn’t mean to cause offence or discriminate by using the word ‘girls’. In fact, I’m sure that they would welcome outsourcing to and working with both men and women.

    It’s just an unfortunate stereotype that secretarial/Virtual Assistance is sometimes viewed as a female profession.

    There’s absolutely no excuse for discrimination against either sex in any profession.

    Thanks for highlighting this very important issue!

    Lisa

  • Shirley Brown says:

    Lisa,

    I am not sure that I actually want to start my own Virtual Assistant business, but I am looking for a job in which I can work from home.

    I would be willing to work as a contractor to a Virtual Assistant or Virtual Assistants and pick up some of the work that is being outsourced. I am currently working as a Systems Analyst in the field of Information Security. My prior experience was Systems Administrator on the server team. I also have HelpDesk experience in which my responsibilites were to troubleshoot both hardware and software issues.

    Prior to transitioning to the position of Systems Analyst, I worked 2 years from home and loved being away from the office environment. I am familiar with MS Word, Excel, PowerPoint, Outlook, and am eager and willing to learn.

    I am the type of person that is driven and do not have to have a boss standing over me to make sure I get the job done. I really want to get back to working from home.

    Also, is there a list of companies that hire Virtual Assistants?

    Shirley

  • Beth says:

    Hi Lisa,

    I am interested in starting my own VA business, but not quite ready yet. I am looking for some work that I can do at home. I currently work full-time as an administrative assistant. I am proficient in the following;
    Excel, Outlook, MS Word, PowerPoint, calendaring, travel arrangements, data entry
    typing and memos. My resume is ready should anyone request to see it.

    Thanks,
    Beth

  • Budman says:

    I am interested in starting my own VA business. I am looking for some work. I am currently working full-time as BPO Associate. Plz help me in this regard.

    Regards,

    Budman

  • Marilyn says:

    Hi Lisa
    I am at present just really lurking here taking in all the information I can with regards to the possibility of setting up a VA business.
    Like Beth, I am looking for some work that I can do at home.
    I have worked for several years as a Personal Assistant/Administrator in the Pulp & Paper, Timber Industry and Human Resources field.
    Also have some experience in District Council work as a Minutes Clerk responsible for the preparation of Agendas, Minutes, general correspondence and maintenance of the Council Minutes Book.
    My strong point is word processing which is something I thoroughly enjoy, typing up of Employee Contracts, Letters, Reports, Memo’s, Minutes, Interviews, etc, etc.
    Experienced in Excel, Outlook, MS Word, Powerpoint.
    If anyone is looking for a subcontractor I am available – happy to forward my resume if any interest.
    Thanks
    Marilyn

  • Greetings,

    I new to all of this. It’s so overwhelming! I am interested however in starting a business in this field. I believe I am the most cautious person when it comes to the internet. I have read your stories and now I’m not sure any more if this is what I want.

    My strong points are word processing and data input. I am experienced in Excel, Access and Word. I don’t use powerpoint that much.

    I’m a newbie here just getting my feet wet, looking to start a portfolio. I would be happy to forward my resume if anyone is interested.

    Thanks
    Mona

  • Collette Schultz says:

    Currently my main focus is subcontracting to other VA’s. Would you mind me posting this article on my blog and linking back here to your site?

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