You should get general liability and professional liability small business insurance policies for your services.  The professional liability insurance needs to have an errors and omissions insurance rider.

How Much is It Going to Cost?

Small business insurance will vary in price, but the average is about $3,500.  The cost is usually based on the size of your company in regards to employees, sales volume and your risk potential.  Make sure you look at the categories really carefully with your agent before you get pigeon-holed into a specific type of classification.  Sometimes you might be misclassified as a software developer when you should be in the network installer or reseller category.  

Subcontractors and Small Business Insurance

Each of your subcontractors needs to have small business insurance of both the professional and general liability variety.  It is not your job to cover them.  If you do, you will be potentially offering them benefits like those of a regular employee.

Small Business Insurance:  The Next Step

To get started with small business insurance, talk to your insurance agent.  If you have one that deals with your property and contents insurance needs, ask him/her plenty of questions and also talk to your accountant.  

Added By:  Computer Consulting 101 Professional Kit

Contracts Don’t Solve All Problems

You should definitely put into place a non-compete agreement at the beginning of the relationship, but you shouldn’t let this take the place of instincts.  A relationship with subcontractors and others is more complicated than just having clients sign service agreements and subcontractors sign independent contractor agreements.  

What are Subcontractors’ Plans?

Sometimes people sign contracts when they have doubts and sometimes they sign them because they have none.  Part of your job when working with subcontractors is gauging the relationship and appropriately judging a person’s character.  Have service contracts reviewed by attorneys to make sure they are truly enforceable.  But even sound legal advice cannot protect you from subcontractors with bad intentions.  

Don’t Let Subcontractors Steal Clients and Vice Versa

Put something in your clients’ service agreements that states your clients are not allowed to steal your employees and subcontractors.  This practice might discourage clients and subcontractors from behaving badly, but those intent to make you miserable will get around contracts no matter what.    

Make Yourself Known to Clients

You need to really get to know your clients.  You should have a good balance between people on your staff and those on payroll so you keep consistency with client relationships.  Don’t let subcontractors know your clients better than you do to keep control over your business.  

Keep in Touch with Clients

If you take on a client that is working a lot with your subcontractors, make sure you are keeping in close contact with the client in another way.  Go with subcontractors to oversee some of the site visits ad act as a project manager.  You can follow up with clients between visits with subcontractors to make sure you stay close.

Blogged By:  Joshua Feinberg

Tips for Managing Client Expectations with Subcontractors

• Be very, very, very up front about which services you are providing in-house, which services you are able to provide internally, and which services you’re going to work with subcontractors for.  

• Continuously reiterate your role as the virtual IT manager (virtual CIO, project manager, genera list, etc..) and define the subcontractor’s role as an occasional specialist.  Use the analogy of a dentist referring certain, very specialized work to an orthodontist to fully explain your situation with subcontractors.

• Let your clients know what kind of skills and background the specialty subcontractor brings to the table.

• Explain what the client should expect from the subcontractors and what they should not expect.  As you explain the subcontractor’s area of expertise, let the client know that this is the specific function the subcontractor will be performing.  Have them refer any other IT issue to you, regardless of whether the subcontractor is on site or not.

• Discuss the history that you’ve had with this particular subcontractor.  Talk about the type of projects that you’ve worked together on.  This will give your client significant peace of mind.

• If it’s a new subcontractor that you’ve never worked with before, you need to explain that too.  Here, let your client know that you still take full ownership of, and responsibility for, the project no matter what, and you’ll help to make sure that everything goes as smoothly as possible.  

• Let the client know that you demand the same level of professionalism, service and confidentiality from the subcontractor that you expect from your employees.

Bottom Line on Subcontractors
Subcontractors’ work is an extension of your firm’s services.  Make sure you are as up front and honest with your clients about your relationship with, and expectations of, the subcontractor.  By doing this you will ensure complete customer satisfaction throughout the course of the project being subcontracted.

In this article, you’ve been introduced to Subcontractors. To learn more about how you can improve your knowledge about Subcontractors, just click here now to get access to a free one-hour audio training program on 5 Easy Ways to Grow Your Computer Consulting Business.

This means looking at the time investment to recruit contractors, subcontractors, and partners.  When you are thinking of subcontracting you really need to have a good base of steady clients that are on service agreements.  This steady income will give the luxury of time – time you need to do all the preparation for subcontracting work.  

Once you decide that subcontracting is what you need to do to move your business forward, the process can take four to eight hours and even more per subcontracting candidate you consider.  

Subcontracting is very much like recruiting and hiring an employee. When subcontracting you need to:

• search out subcontractors
• identify good candidates
• screen these candidates
• create a short-list
• verify references of contractors on the short list
• enter into a subcontracting relationship

Bottom Line on Subcontracting
Before deciding to use subcontracting in your virtual IT business, you need to make sure you have the time to do it right.  You can’t just hire any old subcontractor.  You need time to make sure the person you are subcontracting with is going to represent your company in a way that will get you more, and repeat, business.  Always look at the soft recruitment costs before going ahead with subcontracting.

In this article, you’ve been introduced to Subcontracting. To learn more about how you can improve your knowledge about Subcontracting, just click here now to get access to a free one-hour audio training program on 5 Easy Ways to Grow Your Computer Consulting Business.

Don’t Bore Your Employees

Even if you feel that you can afford their rates and keep them busy, that person is not going to want to be unjamming laser printers, hooking up PDAs to desktops and reinstalling Act and QuickBooks all day.

It’s a huge waste of their time, a huge blow to their ego and they won’t feel as much technical gratification. So even if you have someone that’s extremely senior like that, you’ll probably want to be subcontracting out junior work.

Subcontracting Can Also Bring in Highly Skilled Techs

For most beginning computer consultants, it’s going to be the other way around. You have some good relatively seasoned junior technicians who are good on desktop and hardware troubleshooting and hooking up PCs to LANs, but you may need to start subcontracting server work and installing and troubleshooting things like SQL Server and Exchange Server and firewalls. 

As you move more into IT services, there’s going to be many times where clients are asking for things that are beyond the scope of what you normally do. One of the most important things to do is to look for complimentary non-competing technology providers in your area that you can work with on more formal master/subcontractor relationship.

The Bottom Line about Subcontracting

In this article, you’ve learned about subcontracting. To learn more about subcontracting, click here now to get access to a free one-hour audio training program on 5 Easy Ways to Grow Your Computer Consulting Business.