The Difference Between Consultant, Contractor or Outsourcing

High-Achieving Women: How to Succeed in Corporate America – Part 1

You have three choices: hire a consultant, contractor or outsource. Having worked with high-achieving women and women in leadership, I have found that the best jobs to outsource are those jobs that are not indicative of your brand’s identity.

If your business is in need of a facelift or business growth strategies a consultant/strategist may be the way to go. If you have a large-scale project that your current staff can’t handle, hiring a contractor may be best decision.

When to Hire a Consultant

You should hire a consultant if your business is struggling and you don’t know what to do or if you do know what your business need, but you don’t know how to do it.

Consultants provide insight into how you can operate your business differently. For example, if your salon is being threatened by a larger salon franchise salon that moved across the street, a consultant will be able to help you develop a strategy to stay competitive.

There are also consultants that operate in certain niches. For example, you may want to start an email marketing campaign for your salon. Instead of slugging through miles of unhelpful content on the Internet and trying to become a master of email marketing, you can hire a consultant who specializes in email marketing.

The consultant won’t do any of the work operating the email marketing campaign, but he/she will tell you what you need to do and walk you through the process. You basically are paying for their expertise. As a career and businesswoman, you must remember, there are consultants for every niche: marketing, branding, employee issues, financing, franchising – you name it, they do exist.

When to Outsource Work Versus Hire a Contractor

The difference between outsourced work and contractor work is that outsourced work remains property of the outsourcer and contractor work remains property of whoever hired the contractor.

For example, a car wash business will hire a contractor to build a website and the car wash business will own the website. An electronics company will outsource its customer service operations to another business that has a call center. The electronics company does not own any of the call center’s employees, efforts or services.

You should only outsource work that falls out of your company’s expertise. For example, if you run a bakery, then outsourcing your IT needs would make sense. If you were an IT company, outsourcing your IT, this would not make since at all. Outsourcing should be done to keep you and your employees from losing focus on your areas of expertise that your company has developed.

Lastly, you should always calculate the cost of doing jobs in house versus outsourcing (how it affects your growth, success or acceleration). Say you determine that you make $40 an hour running your dry cleaners. It takes you 15 hours a week to handle customer inquiries about your services.

Now a call center can manage your customer inquiries for $150 a week. Then it would make sense to outsource to the call center. Handling the customer inquiries would cost you $600 because your time is worth $40 an hour.

You should hire a contractor to produce a deliverable that your current staff can’t produce. For example, if you want a website built for your accessory shop then you would contract a web developer.

The web developer would be working as a contractor. The contractor’s job is to produce something that you have hired him/her to do, and then deliver it to you. The contractor is not your employee.

Technically, you should own everything the contractor produces while working for you. So, even if you and the contractor end your agreement early and the website he/she was hired to build is only half completed, you should own whatever has been completed (must have a contract that is very clear about the terms of the work).

Sometimes keeping jobs in house is more affordable instead of hiring a contractor. For example, if you’re going to start a hair styling blog to augment your hair salon business, you may want to hire a person who has developed these type of websites in the past. This way, you can get a better cost per hour for web development instead of constantly paying someone who has less experience to manage your website.

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As a reminder, for career and businesswomen it’s always about – ‘Results. Uniqueness. Differentiation.’ I call this your ‘RUD’.

© Dr. Laureen Wishom or Dr. Laureen International (2013-2018). Unauthorized use and/or duplication of this material without express and written permission from this site’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Dr. Laureen Wishom/Dr. Laureen International with appropriate and specific direction to the original content.


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