Hiring Contractors 101: Everything You Need to Know

Getting ready to hire your first contractor? Already have some contractors working for you? Well, no matter where you are in the process of bringing in help, you’ll want to learn how to go about hiring contractors the right way to avoid any potential issues in the future.

And if you’re thinking you’re not quite ready to hire out yet, this is something you want to lay the groundwork for ahead of time. Start preparing for the day you do need to hire a contractor because the last thing you want to do is be scrambling when you really need the support. Instead, by following the tips below, you’ll already be organized and prepared to move forward without a hitch.

So, let’s discuss the steps for hiring contractors, including getting the required legal documents for contractors. 

Hiring Contractors for Your Small Business

Whether you’re just getting ready for the day you hire your first contractor, are hiring one soon, or are already working with one or more contractors, the following steps are important for setting up a strong legal foundation and a great professional working relationship.

1) Write out tasks

Start laying the groundwork by having a clear job description ready. Writing out the job description helps you get very clear on what this person’s tasks are going to be.

This step doesn’t have to be complicated. It can be as simple as opening a Google doc, even before you’re ready to hire, and starting a bullet list of things as they come up throughout your day that you could use help with. Think about tasks you would want to send to a contractor to do if you already had one.

Once the task list starts to get long, take time to sort and categorize the tasks. For example, group tasks into social media, email inbox, scheduling, and so on.

Having this organized list will be a huge help when you write a job description. Bonus? You’ll have a ready-to-go task list for the person you ultimately hire. 

2) Determine your budget

The second step is to think about what your budget is for paying someone. Start by thinking about what your budget is for the month and how you’re going to pay your business expenses and your new contractor’s invoices. 

It’s important to think long-term about this. I don’t ever recommend hiring somebody if you only have enough to pay them for 1 month but may not be able to keep them on longer if your business doesn’t do well as well as expected over the next few months.

Your budget should be done with the plan of keeping them on for several months since it can take a while to get someone up and running and really reap the benefits of outsourcing.  

3). Get legal contracts for independent contractors 

Once you’re ready to hire, you’ll need to send an independent contractor agreement and a blank W-9 form to complete. I use HelloSign to send and sign contracts and then send a blank W-9 form.

Don’t skip this step! You absolutely need a completed W-9 from them, along with a signed independent contractor agreement. Once you’ve received these forms back, make sure everything is complete and save it.

If you’re a bit daunted with what to include in a contract, I offer a downloadable contract template that you can get in my template shop. In this contract, it clearly states that this person is a contractor and not an employee. It also addresses the fact that the contractor is responsible for paying their own taxes and reporting this income – all important information to have in your contract.

4) Onboard and train

Onboarding involves training and figuring out the best way to give feedback. So, while this step can be complicated, the best tip I can give is to not be afraid of giving constructive feedback.

To foster a healthy and successful long-term relationship with contractors who get better over time and produce work that’s really a mimic of what you would have done yourself, you must provide thoughtful feedback.

Admittedly, it’s easier to just fix things yourself and move on. But this won’t do you, your business, or your contractors any favors. Whenever you receive something you don’t like or needs changes, force yourself to take the time to record a Loom video or some other screen capture of video of you talking to them about what it is that you don’t like, why you don’t like it, and how you would like it to be done instead. Send the video to them and let them change it.  This is the only way they’ll learn and, over time, you’ll find the feedback you need to provide becomes less and less.

Ready to hire so you can scale your business? 

Now that you have the very first steps to hiring contractors, get excited about freeing up your time so you can focus on the areas of your business you enjoy and are best at while your contractors handle the other stuff!

Don’t forget to get your independent contractor agreement to make this process even easier. Tune into my YouTube video on hiring contractors to get even more information about this important step in your business, including the legal differences between independent contractors and employees.

For more tips to help you set your business up for success, watch my free legal workshop called “5 Steps to Legally Protect & Grow Your Online Business”.

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