Submitted by John Piper, American Family Insurance, Zanesville, Ohio
Hiring Subcontractors? These Tips Are Key.
Protect yourself when you need extra help.
Does your desire to grow outmatch your staffing? Subcontractors might be the answer.
These tips on hiring contractors can help you fulfill your dreams of business success.
Subcontractors: an extension of your business
Even though they’re not permanent employees, to your customers, subcontractors are still the face of your business.
As a business owner, you’re responsible for everything a subcontractor does – good or bad. The challenge is to find subcontractors who are not only good at what they do, but who share your businesses goals, ethics and desire for quality, and who will preserve your reputation.
When hiring a subcontractor, the best sources to check are colleagues, co-workers or people in comparable businesses. Once you have a name or two, contact them for examples of past work and references. You also can check a contractor’s online reputation by searching for the company’s name with words like “scam” or “complaint.”
Hire the right subcontractor
Since any subcontractor you hire will be a direct reflection of you and your business, you need to make sure you and your business are protected in the event of any damage, accidents or mistakes.
After the work is done
Make sure you’ve kept all paperwork related to your project for bill paying, tax purposes or settling any disputes. Also, before signing off, make sure to protect yourself from any legal action by requesting a lien release or lien waiver from subcontractors and any sub-subcontractors they hired.
Subcontractors can help you satisfy customers, build capacity and grow your business. By doing your due diligence to partner with the right subcontractors, you’re protecting everything you’ve worked so hard for – your business dreams.
This article was sourced from: http://www.amfam.com/safety-advisor/business-advisor-fall-2014.asp#.VLfabntEK3U a resource of American Family Insurance provided free of charge to customers and non-customers alike.
Hiring Subcontractors? These Tips Are Key.
Protect yourself when you need extra help.
Does your desire to grow outmatch your staffing? Subcontractors might be the answer.
These tips on hiring contractors can help you fulfill your dreams of business success.
Subcontractors: an extension of your business
Even though they’re not permanent employees, to your customers, subcontractors are still the face of your business.
As a business owner, you’re responsible for everything a subcontractor does – good or bad. The challenge is to find subcontractors who are not only good at what they do, but who share your businesses goals, ethics and desire for quality, and who will preserve your reputation.
When hiring a subcontractor, the best sources to check are colleagues, co-workers or people in comparable businesses. Once you have a name or two, contact them for examples of past work and references. You also can check a contractor’s online reputation by searching for the company’s name with words like “scam” or “complaint.”
Hire the right subcontractor
Since any subcontractor you hire will be a direct reflection of you and your business, you need to make sure you and your business are protected in the event of any damage, accidents or mistakes.
- Get estimates – Get written cost estimates and don’t automatically choose the lowest bidder. Ask for an explanation to see if there’s a reason for the difference in price.
- Get it in writing – Written contracts can save you the high legal costs associated with surprises and misunderstandings. Putting an agreement in writing helps formalize parties' commitments to each other. Consider having a lawyer review or draft contracts for larger, more expensive agreements. A contract doesn’t have to be long, but make sure it includes:
- Complete name, address, phone and license number (if required) of the subcontractor
- Specific work the subcontractor will do
- Estimated start and completion dates
- Payment schedule
- Subcontractor’s obligation to get all necessary permits
- Warranty information, if applicable
- Dispute clause that explains how the parties will handle a disagreement
- Ask questions – How many projects like yours has a subcontractor completed? Ask for documentation so you can see how familiar the contractor is with your type of project.
- References – Ask a potential subcontractor for names, addresses and phone numbers of at least three clients with projects like yours. Ask each client how long ago the project was and whether it was completed on time and budget.
- Insurance – Make sure any subcontractor you hire has insurance to cover losses or damage they may be responsible for. Ask for copies of insurance certificates including liability and workers compensation. Make sure they’re current, or you could be held liable for any damages that occur. Also make sure your subcontractor has the same level of liability you do. Once the contract is signed, require the subcontractor to add you as an additional insured on their commercial insurance policy.
- Will the subcontractor be using subcontractors (sub-subcontractors) – If so, make sure the sub-subcontractors have current insurance coverage, all applicable licenses and a work reputation for quality that equals your own.
- Background checks – For liability reasons, it is necessary to make sure the subcontractors' employees do not have a criminal record. Check with the county courthouse records to see if the subcontractor has had prior suits for non-payment to suppliers.
After the work is done
Make sure you’ve kept all paperwork related to your project for bill paying, tax purposes or settling any disputes. Also, before signing off, make sure to protect yourself from any legal action by requesting a lien release or lien waiver from subcontractors and any sub-subcontractors they hired.
Subcontractors can help you satisfy customers, build capacity and grow your business. By doing your due diligence to partner with the right subcontractors, you’re protecting everything you’ve worked so hard for – your business dreams.
This article was sourced from: http://www.amfam.com/safety-advisor/business-advisor-fall-2014.asp#.VLfabntEK3U a resource of American Family Insurance provided free of charge to customers and non-customers alike.