Monday, May 26, 2014

Understanding Collaborations, Partnerships, and Sub-contracting (Part 5)

In my previous posts, I provided general guidelines about the nature of collaborations and partnerships. Now I'd like to talk about sub-contracting.

Sub-contracting is a cost-effective way for companies to get tasks done while keeping the number of their employees trimmed down. The disadvantages of having a huge workforce is companies would need to continually spend for employees to get trained, as well as paying for social security and health benefits.

With freelancing gaining more and more grounds in the past decade, and with millions of competent freelancers out there who charge reasonable fees, companies have seen how sub-contracting jobs can cause them to significantly reduce their budget.

Freelancing is especially beneficial to small companies. For example, an advertising agency may have made it their niche to cater to the needs of entrepreneurs whose businesses operate on a small-scale level. And yet, even small businesses have their peak season. By the time October or November comes around, they may introduce a variety of promos like giving discounts to clients or customers.

Therefore, the advertising agency may be burdened with workload that serves as double or triple than with any other months during the year. And the best, and least expensive, way to cope with the high demand is to outsource jobs through sub-contracting.

When a company hires you as a sub-contractor, here are several non-negotiables:

  • You can set your rates when you agree to work as a sub-contractor, and maybe even earn more than what you usually charge.
  • Some sub-contracting jobs may only require you to work for several weeks or a couple of months at the most, while some require freelancers to work for an indefinite period of time. It could be tricky when you negotiate for the standard 40- to 50-percent down payment. The best way to deal with this is to charge an hourly rate.
  • You must grant all forms of copyright to the company after the project has been completed. Protect yourself from unscrupulous clients by stating in a portion of your Contract that all forms of copyright will be granted only after all your fees have been settled.
  • Should your client feel satisfied because you helped them meet their desired results, you can ask them to write a brief testimonial about you. This can be an added boost to your marketing strategy.
  • Keep in mind that your client may require you to do the opposite, which is to keep the details of your transaction under discretion for valid reasons, and you should grant your client the Right to Confidentiality (have this clearly stated in a portion in your Contract). This only means that even if big-name companies may be outsourcing projects to you, you cannot ask them for a testimonial, and surely you can't include their logos in your marketing materials. 

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