The Difference Between Subcontracting & Outsourcing

ConnectionWhat outsourcing is. You pass it on. What subcontracting is. The initial service provider is in control but another provider does the work.

There are things of which one should pass on some workload for the company’s development. Which is outsourcing.  The tasks that are not income related or not the best use of the owner’s time should be subcontracted.

To buy a product from someone else and sell it to others is not outsourcing, it is mere a relationship of a buyer and a vendor. Subcontracting involves an in-depth communication process of both your or the project manager with the subcontractor. Failure of the subcontractor to meet the lead directives would mean breakdown of everybody. It is not just instructions that are necessary, it is more to giving out rules and making rules happen. To make an subcontracting business successful it roots to trust, confidentiality, and coordination.

Trust is important for the subcontracting business to flourish. The presence of trust with both the lead and the subcontractor makes them focus more with making productions a hit rather than involving themselves from negative contemplations.

Equally important with trust is confidentiality. Due to tight competition in business, there are matters that should be kept confidential by both the lead and subcontractor. Disclosing private matters will result to a probable malfunction in the business. Thus, problem will arise. It does not just affect the lead contractor but significantly, the subcontractor.

Proper coordination of the lead project manager to the subcontractor is highly vital in the a service business. Coordination gives both the contractors the ability to be responsible with each other’s task. Both should move forward when things are well-planned and well talked about by both parties.

Failure to comply with the essentials of subcontracting means fall down of the business service being performed.

Common business types that are being subcontracted are in the field of:

• Analysis of Data
• Knowledge or Research Processes
• Operations in Information Technology (IT)
• Writing
• Back Office Processes
• Recruiting
• Project Bidding
• Training

Pass it on. To pass part of a responsibility, especially a business task to a third party takes a leap of faith. Subcontracting is essential for service providers who wish to retain and gain clients in the virtual world.

How & What To Subcontract

PLR Articles: How to Choose a Good Service

By Nicole Dean

Private Label Rights (PLR) articles are hot right now. The
only problem is that many people have tried them and been very
disappointed. I can’t say I blame them. I’ve been disappointed, too.

Oftentimes, the PLR services you may have tried are lacking in
several areas. So, what makes a good PLR service and how can you make
sure that you don’t waste you money on a bad one?

Here are some questions to ask yourself before investing any money into a PLR package or membership.

1. What topics are you getting?

I mean, seriously, if you are promised 100 articles each month, but
you end up receiving a selection on Laser Hair Removal and Divorce,
when all your websites are about cooking… You just wasted money.

2. What quality are you getting?

Say you’re lucky enough to get a series of articles on your topic.
Take a minute to look at them. Are they pure fluff? I’ve paid for
articles that had no original ideas, or worse, were written so poorly
that there’s no possible way I’d put them on my website. Make sure your
PLR package contains quality articles. Otherwise, you just wasted

3. How many other people are getting the exact same articles?

If 1000 other people signed up to get the same articles, are you
really receiving any value? Perhaps if you don’t mind reworking the
articles. However, if you’d like more unique articles, then you may
consider a more exclusive PLR service.

4. Does the PLR service give you any extras?

Are they offering training on ways to use their PLR articles? Do
they provide you with ways to monetize the articles you’ve purchased?
Some PLR sites will include recommended affiliate programs and training
on how to use their articles to get the most benefits from their

Really assess the value you’re receiving when investing in any PLR
package or service so that you don’t end up wasting your money. I don’t
want you to make the same mistakes I did.

Author Resource –
Nicole Dean welcomes you to check out – where you’ll find high-quality PLR articles on niches sold in very limited quantities.

How & What To Subcontract

Familiarizing Yourself with the Pros and Cons of Subcontracting

What if your online business seems smaller and smaller everyday for everything – the time, the workload, and the production?

Will you wait for your company to fall apart or act now?

One solution is to subcontract. Subcontracting is commonly known as the administration and supervision of one part or parts of the core business managed by a third party.

Like any business events, there are advantages and disadvantages if one decides to subcontracting.

The following are subcontracting advantages:

• Flexibility

The hours of work may be shorter or longer depending on the lead  contractor’s decision. Additionally, since it is contract-based there is room for  contract extension if subcontractor’s efficiency is well; otherwise contract renewal is not possible.

• Expertise on everything is not a must

Since the subcontractor will be the one to handle part of your business’ sector, you have an option whether or not to be an expert in the field that you want to outsource. Normally, the subcontractor being the party offered by the outsourcing business are the ones expected to be specialist in their field.

• Cost-effective

Generally, subcontracting saves you and your company money. Most often  than not, subcontractor has lesser production cost with efficient services.

• A venue for new learning.  Subcontracting gives both the contractor the chance to explore new business resources such as reading materials, technical and non-technical information.

Not all things are good, others believed that for every matter in life there are inconveniences.

The following are subcontracting disadvantages:

• Inability to have complete peace of mind. Since one part of your company is with someone else’s hand, more likely you will be hesitant once in a while. You may start to worry if the subcontractor can keep up with your business. Henceforth, it is important to have a good foundation of trust.

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Take Steps to Grow Your Virtual Business!

Back by popular demand, the Online International Virtual Assistants Convention (OIVAC) is happening once again.

Sharon Williams, the Steering Committee and OIVAC’s presenters are leaders in the Virtual Assistant world, and have formulated the best program to help build your virtual business. I’m presenting in one of the dedicated tracks you can choose from or better yet, register for the entire event. No matter what stage of business development you are in: start-up or aspiring, novice, seasoned, OIVAC 2013’s presenters are committed to sharing with you real world tools and training for maintaining and growing or expanding your successful VA business.

Here’s what we’ve put together: • 48 hours of training, webinars, networking • 2 and 3 hour “Break it Down” sessions where VAs walk away with a skill, new process or technology awareness • International Virtual Assistants Day Celebration • Networking galore • Ask the Seasoned VA sessions • UK, Aussie, African VAs sessions • VA Hot Seat session

These seminars will be presented, over the course of 3 days, by your fellow Virtual Assistants who have been there, done that.

AND… ANY Virtual Assistant at ANY stage in his or her business career can attend, accessing cutting edge information about getting ahead in an increasingly competitive virtual business environment.

Added Value Benefits: • Pay for entire convention registration in 3 equal installments • Attending live conference will cost about $1,500, but you can participate in OIVAC for less than $300 (and get copies of the recordings too) • No travel, lodging, food or entertainment costs • No lost business because you attend from the comfort of your home/office • Attend from home, available to handle family matters

The cost? Save $50.00 by using the Early Bird Registration $99 to $189.


Hope to see you there!



Subcontracting: A Good Fit for this Start-up

Guest Blogger: KassandraBrownis a new business owner who enjoys yoga, meditation, walks on the land and the freedom to focus her energy on the tasks that are important to her.

When starting my business I thought I would do everything myself. I’ve started a business before and did all of the website design and construction myself, did all of the advertising design and creation myself, and did all of the actual work myself. I figured I’d do it that way again.

My main motivations for doing it on my own fell into two categories. 1) I didn’t think I had the money to afford help. If my time is free, then the least expensive way to do anything is for me to do it myself.  2) I wanted to be seen by myself and others as being competent enough to know what I was doing. I was proving myself and somehow thought I was admitting to some lower level of capability if I asked someone else to do a task for me.



After all, it worked before so why change it?

It turns out there are good reasons to change the ‘do it yourself” paradigm for a start-up and an easy way to change it is with sub-contractors. But before I could benefit from hiring subs, I needed to examine some of my underlying beliefs – namely the ones listed above – and see what was really true.

3 Do It Yourself Myths

  1. I don’t have the money to afford help. Asking others to help me in their area of expertise means the work gets done faster and better than if I do it on my own. The increased professionalism of the end product can pay for itself in terms of helping create more customers through ease of use or appearing more competent through having nice presentation. This needs to be balanced and services paid for judiciously when one is on a tight budget, but it is not necessarily more expensive to hire help.
  2. My time is free but other people cost money. Undervaluing my own time makes everyone else seem very expensive. Having children and balancing time with my family helped me realize just how valuable my time is. This made it easier for me to hire a subcontractor for specific tasks and feel good about the investment.
  3. People will respect me more if I do-it-myself. Being capable is very respectable. Yet most of us want to be seen as capable in our chosen field or vocation. I realize I often have more respect for people who ask for help when they need it rather than maintaining a stoic struggle for independence.


Some tasks of a new start-up are best handled by the owners, but others can benefit from being delegated. I started by bringing in a friend to consult with me on the start-up and visioning. From there, I hired a subcontractor for my website. After I created the basic site and content, he came in and created a unified theme and easy-to-use forms. The subcontractor was hired for a specific task, given a specific budget, and expected to deliver within a specific timeline.

When the scope of all that was finished, our official relationship was also finished. I was left with none of the expectations I would have for an employee like continued production and my subcontractor had none of the expectations for an employer like continued compensation. Clear boundaries for the work, scope, and timeline are some of the best features of a subcontractor relationship.

There are some things that a business owner benefits by doing for themselves. There are other things that are very effective to subcontract. An example of a whole category of things that are good to subcontract – specific tasks requiring technical expertise you do not wish to acquire at this time. Subcontracting allows a business owner the flexibility to focus on the tasks that are important to them because they’ve hired some competent person to do the task they don’t want to do.

For instance, subcontracting aspects of my web development has been invaluable. I’ve saved time by asking my subcontractor to do targeted jobs, but I would not have benefited from subcontracting the entire development of the site. I needed to develop the content and going through that process helped clarify my vision.

I’ve also enjoyed the flip side of subcontracting. I’m currently blogging for  A Cooler Climate. Raising awareness about climate change is a mission I believe in but this business has no budget for hiring me as an employee. Subcontracting allows me to take on finite tasks for a known amount of money over a given time period. Both of us benefit from this clarity and flexibility.

What’s your favorite benefit of subcontracting? Known timeline? Ease of using the right people for the right tasks? Ease of budgeting? Or something else? We look forward to hearing from you.

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Employee Or Subcontractor?

Many employers have elected to hire subcontractors as a way to reduce costs and reduce liabilities. This can be an effective tool, but knowing the difference between what the IRS and other government agencies consider as an employee and a subcontractor is extremely important. If a subcontractor is found to fit certain criteria, they may actually be legally considered an employee and this could leave employers open to stiff fines and penalties from the IRS and even liable for back wages and benefits.

Subcontractor Definition Many employers consider a subcontractor anyone they hire a job out to that is not hired as an employee and pays their own income and withholding taxes. This could be temporary help through an agency or a free-lance entity who charges a fee or commission for their services. Although that may seem to be the case, the IRS has set guidelines on what they consider to be a subcontractor as do state labor and industries and unemployment agencies.

To be a subcontractor or independent contractor under the IRS definition has many different aspects, mostly to do with how the subcontractor and business relationship applies to the work being performed. In general, the definition of a subcontractor is someone who is paid only for the result of their work, not when and how it is done. Here are a few examples of what the IRS uses to help determine an employee versus an independent contractor.

-Directions and training. Subcontractors are generally not trained or given specific directions on where and how the job is to be performed. They are hired for their expertise and are allowed to complete the job as they see fit as long as it meets the final results of the contract for service.

-Hours and workspace. The subcontractor should determine the amount of hours and where they are performed. If a business requires that they perform a certain amount of hours per week or that they do all work on-site, they may be considered an employee.

-Tools, equipment, and expenses. Subcontractors generally pay for their own expenses and provide their own tools and equipment. If you are providing reimbursement for expenses or having them use your equipment, they are more likely employees.

-Length of service. Any contractor that performs work for you for a substantial amount of time or at reoccurring intervals may be considered an employee. Also, the more important that contracted work performed is to a businesses success can also determine that they are considered employees.

The IRS uses a 20-point test to determine whether someone should be considered an employee or independent contractor. They main points to consider is that contractors are hired to perform a specific job based on the results, not how it is performed. They can hire their own employees; work whatever hours and wherever is needed, and are hired by other businesses and individuals to perform services outside of yours. Any limitations to how they and when they perform, who they can hire and where they can complete their work may potentially be construed as an employer/employee relationship.

Other Considerations Beyond the IRS, there are other entities to check with on definitions of subcontractors. OSHA and other worker rights agencies may have stipulations you must adhere to. To protect yourself from liability, talk with a lawyer to understand insurance requirements for job safety concerns. Having your subcontractors responsible for their own insurance in your contract could save you from costs if the contractor is at fault.

Hiring a subcontractor can save you money and time versus hiring a person to do a specific job. Just be aware that just because you or they think they are subcontractor does not make it necessarily so in the eyes of the IRS, the state government or the courts.

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Always Give a Trial Period When Hiring Subcontractors

The Setup

You’ve decided take the plunge and outsource some work to a subcontractor. So, you ask a couple of colleagues for recommendations and they suggest Susie Sub. They say Susie is a hard worker with a variety of skills and she’ll do an excellent job for you.

So you contact Susie Sub and agree upon a rate for your client’s project, sign a contract and you hand over the specifications. You expect Susie to have her work finished by the next week because of the glowing recommendations.

The next day, you email Susie for an update, thinking she might have some questions. As the project manager, you want to give her support. By that night though, you hear nothing back from Susie and start feeling a little worried.

You’re thinking there’s probably a good explanation. You figure she’s probably working so hard on your project, she’s forgotten all about email. She’ll answer your email the next morning.

The Problem

Three days later and you’re anxiously trying to contact Susie. You’ve called her, emailed her, tried to reach her in every way possible and there’s still no response.

Another day goes by and the client is asking questions, wanting to know how the project is going and asking for a few changes to the original project. You still can’t reach Susie and your stress level goes up, so you start working on the project yourself. You’ll have to work as fast as you can through the next day and night but aren’t sure if you can complete it by the due date.

Finally Susie emails you. She’s been visiting her friend out of town and there was no Internet. She did work on your project though and it’s all complete, right on time. You go through it, and the work is excellent. But she caused her so much stress that you almost don’t care.

The Solution

The moral of this story:

When you outsource work to a subcontractor or multi-VAs, always give a probationary or trial period to test if they’re suited to work with you.

A trial run would have helped you discover that Susie has a habit of not communicating during a project, even though she does the work, does it well, and does it cheerfully.

This situation may be difficult to handle and you need to make a choice. Either you can handle Susie’s silence because of her excellent work, or you’re going to be so stressed out by the absence of communication during the project that you can’t possibly work with her.

A trial period can also bring out other problems:

1. Work isn’t finished on time.

2. Refusal to follow your instructions.

3. Negative attitudes.

The Lesson

You may not notice all the problems during a trail period, but you can take quick action to address those that do, and possibly save yourself some headaches.

During the time you’re testing your subcontractor, make sure you are paying her. You may go ahead and sign a contract, including a provision for the trial period.

After a trial period is over, mentor your subcontractor and offer constructive feedback. The reason your colleagues may not worry about Susie is they’ve worked with her for years and know she always comes through. It’s important to tell Susie or other virtual assistant team members that you expect communication throughout the project. They may be happy to oblige.

Get the The Power of a Focused Business and learn how to focus more on your business for greater success.

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Hiring Subcontractors Helps You Concentrate On The Things You Do Best

Sometimes you can get so involved in a project that it’s difficult to focus your energy on the parts that you enjoy.

Maybe you love writing, but you’ve been hired to build a website and you’re so stressed out from trying to set up WordPress, editing the template, creating graphics that you feel sick. You haven’t had more than a minute to think about the great content you were so excited about when you took on the work.

Or possibly you were so excited that your ideal client hired you to design her graphics that you took on the job of designing the whole site as well. And now you’re spending hours on tasks that you don’t know how to do and regret accepting the project.

Perhaps hiring complementary subcontractors will help you.

Complementary Subcontractors

Some people hire subcontractors or someone from a multi-VA team that have the same skills as they do. This can help the service provide increase her productivity. For example, a writer might hire a team of writers so that she can take on more writing projects. Or a web designer might hire more web design subcontractors so he can churn out more sites.

While this is a common and effective way to produce more work, it’s not the only way.
You can also hire subcontractors with different skills that go along with yours.

For example, if you’re a virtual assistant who specializes in affiliate management, you might hire a graphic design subcontractor to create banner ads and a writing subcontractor who can put together email articles and blog posts for your client’s affiliates. You simply manage the project, making sure everything is up your standards and done correctly. Of course, this is only if you’re skilled with managing projects.

If writing is what you’re most talented at, you might hire a subcontractor as a project manager, along with a graphic designer and a web designer. You write all the content, the graphic designer creates all the banners and the web designer uploads everything to the client’s sites.

The project manager keeps track of the calendar and ensures that each element gets where it’s supposed to and on time. As the business owner, you need to oversee all the parts of a project and make sure everything fits together to produce the best project for the client. You also need to communicate with the client.

Overflow and Special Skills

You can also hire subcontractors to handle any overflow or excess work that you have. Perhaps you accepted too much work and it’s your busy season because it’s close to the holidays. You need to get articles, blog posts and banners created but can’t do it all alone.

Hire subcontractors who have complementary and similar skills so that you don’t get overwhelmed with all of the projects that you want to get to clients on time.

The great thing about subcontractors is they don’t have to do the same things you do. They can offer associated skills that will help you serve your client’s needs better, which will benefit the reputation of your business.

When your virtual assistant team is working together smoothly, you won’t need to worry about not getting tasks done on time and doing things that you’re not interested in. That’s one of the biggest advantages of running your own business-if you have too much work, or don’t like the work, outsource to someone!

How & What To Subcontract , , , ,

Options for Paying Your Subcontractors

Subcontractors or a virtual assistance team are self-employed professionals that can help add value to your business. Your clients pay you, but you pay your subcontractors. While this does create a little more work for you, the increase in your productivity will more than pay for the extra work.

There are several ways to make this system work.

Pay Per Hour or Per Project

First, you need to choose a payment method for a project. Are you going to charge your client an hourly rate or a per-project rate? You’ll also need to find out if your subcontractor is going to charge you hourly or by the project. A subcontractor should always be paid even if your client is late paying you.

Second, you’ll need to find out how much your subcontractors charge or will accept for the work you need them to do. This way you’ll know how much you should charge for your all of your services including project management, client communication and editing. Add these numbers together, along with any other necessary fees, and you’ll have the amount you need to quote the client (although I recommend adding a small contingency fee as well).

Remember to charge enough to cover your subcontractor’s fees, the time you have invested in the project and any overhead that might be associated with the project. After you figured out the total amount, you’ll need to make sure you sign a contract with the client and the subcontractor before working on a project. Your lawyer will tell you what should be included in the contract.

Sending Payment

Subcontractors or a virtual assistant team have different payment policies. Once the project is completed, some subcontractors invoice immediately. Other subcontractors invoice monthly or even weekly. Payment policies or methods should be mentioned during the first interview with anyone you’re thinking of outsourcing work too.

Another way some contractors may want paid is by selling you a certain amount of hours or tasks per month. She only works with you until the hours are used. This is a good arrangement if your subcontractor is completing tasks that aren’t directly related to specific clients or projects.

Come to an agreement ahead of time about specific payment arrangements. PayPal is generally used to pay online subcontractors. In some cases, you may be able to pay via credit card, or the subcontractor may accept checks.

A subcontractor with a small business may require you to pay your invoice immediately. Some larger operations though may allow you to pay your invoices 10 to 30 days after receipt. This information should be included in your subcontractor’s polices.

What If the Client Doesn’t Pay?

If your subcontractor is charging you for a specific client-related project and the client doesn’t pay, you may not want to pay your subcontractor.

This is an important subject and should be covered in your contract with the subcontractor. But even if it’s not, as the project manager, it’s not only your responsibility but it’s ethical to make sure you pay those you outsource too, even if you don’t get paid. It’s also your responsibility to ask your client for payment.

Treat your subcontractors well by following their payment policies and never under charge your clients. This will help make your business successful.

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Ten Tips to Hiring Reliable Subcontractors

You worked hard to grow your service business and feel proud of your success.

The time has come for you to make an important choice. You can either keep your business from growing further, or outsource some projects to subcontractors and add more people to your virtual assistant team.

It can be a difficult decision to go ahead and bring in subcontractors or keep the same routine of doing everything alone. After all, you’ve poured yourself into the business and you really don’t want to take a chance on someone else messing it up.

In some ways businesses can be compared to kids. They don’t stay little forever. Eventually, they’re going to go to school, get invited over for sleepovers and generally get taken care of by other people.

Likewise, you’ll need to learn to let go and outsource to a virtual assistant mentor or add people to your virtual assistant team. Let them handle some of the tasks in your business, including some of your client work. Of course, that doesn’t mean you should hire the first subcontractor you see and expect her to be a perfect fit for you.

10 Smart Ways to Subcontract

1. Understand that building a subcontractor relationship takes time. You need to get to know your subcontractor and she needs to get to know you to determine if you can work with each other.

2. Ask your colleagues or contact a virtual VA firm for recommendations before you hire anyone. A great recommendation will go a long way towards insuring that you’re hiring someone who adds value to your business.

3. Don’t be tempted to hire a subcontractor because they’re cheap. It may cost more but someone with a good reputation and expertise in the areas you need will benefit you in the long run.

4. References will give you lots of information about a person you’re thinking of hiring. If you find great reviews, you’re ready for the next step. If the references are less than ideal, you may want to find out why.

5. Check the potential subcontractor’s portfolio and website. If her own site isn’t up to your standards and doesn’t look professional, chances are, her work won’t be either.

6. Offering a trial project is one good way to tell if a subcontractor is trustworthy. Contract her to do one small project and see how she handles it. If it takes her several weeks to finish it, she may not be a good fit. It’s a good sign if she returns 30 minutes later and has really improved the article.

7. It’s very important that you both sign a contract. Include the amount she will be paid, allowances for increases in rates later on, a point at which the contract will be re-evaluated and specific instructions on what will happen if either one of you wants out of the contract. The contract should include detailed information on what happens if either one of you breaches the contract. Also, include a confidentiality clause. The contract should only be signed after consulting with an attorney.

8. Excellent communication is necessary for a good business relationship. Make sure that you provide clear instructions and that your subcontractor or multi-VA team understands your expectations. If a mistake does happen or there is a miscommunication, review the situation with your subcontractor so that both of you understand what went wrong.

9. You should evaluate all of the subcontractor’s work. The only way you’ll be able to ensure your company’s quality is to review the work yourself (unless, you’ve hired someone to work as a project manager and that person knows exactly what you’re looking for).

10. Always follow the instructions in the contract for termination. Sometimes a subcontractor doesn’t work out for a variety of reasons. Don’t take it personally, don’t insult her, but do give constructive feedback if she wants it. Also, don’t let one bad experience turn you away from subcontracting.

Follow these ten tips and you can grow your business from a single entrepreneurship to a company that runs well with teamwork and handles several clients and many projects effortlessly.

Get the The Power of a Focused Business and learn how to focus more on your business for greater success.

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