Written by Shawn Waugh
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P&L is the lifeblood of every small- to medium-sized business. But the constant financial drain of bloated overhead can skew your P&L heavily to the L category. Which raises the question: how exactly does an SMB quickly assemble a team to grow and take on larger projects, but without being encumbered by a spendy full-time workforce?
The answer is to strategically utilize specialized, flexible teams whenever and wherever you can.
A Primer on Flexible Teams
At the heart of the matter, we’re dealing with two different types of workers: W2 employees and 1099 contractors. W2 employees are the kind of workers most people think of when it comes to gaining employment: your supervisor sets your schedule, you have to work on-site (if they require it), and use your employer’s equipment/software. This is the type of position that also requires a business to pay its share of your employment taxes and contribute to social security on your behalf. Not only does it require workers to be authorized to work in the US, but it limits your selection to only those workers – leaving you with an expensive and limited pool from which to build your team. 1099 contractors are a different category of workers that includes freelancers, independent contractors, and service vendors. Since these vendors can be hired from around the globe, SMBs can access a global talent pool that would otherwise be off-limits. The crucial difference is that contractors have the freedom to work autonomously and can have multiple concurrent clients. Though there are due dates that can be part of their scope of work, they generally have the independence to work when they want, where they want, and can even subcontract the work if they choose.
Top Talent Wants Flexibility
New business owners naturally gravitate towards hiring permanent team members as employees. It gives them immediate control and oversight over the work their team accomplishes. But that safety net comes at a cost: hiring employees to attract workers who want to be employees.
But people who excel at their crafts often don’t want to be employees. They want the freedom to work on the projects that pique their interest and work with clients they like. Employees don’t get to turn down work that bores them or isn’t their specialty — but contractors do. And the smart ones leverage their income potential by optimizing their tax liability and business structure.
For SMBS, this means the best candidates to join their team won’t be found on hiring boards or Indeed. Instead, it’s contractors and fellow SMBs. And unlike an employee who’s guaranteed a paycheck (and benefits) no matter their output, flexible team members know they have to hustle if they want to partner again in the future. That means top-tier talent always brings their A-game to their work.
Maximizing Flexible Teams
Getting the most out of your flexible team requires an adjustment in the way SMBs think about work. Traditionally, SMBs approach their teams using the vocabulary of roles: who’s going to fill the role of project manager? Or coder? Or designer? But making the most of flexible teams means thinking about work in a project-based way: what needs to be achieved to reach your project’s milestones? What does this look like in practice? Let’s say an SMB is launching a website for a client. Rather than worrying about having a full-time designer on the SMB’s payroll, the conversation shifts to “What do we need for these buttons and interface designed by this due date?” That may mean bringing in a specialist to handle the buttons or the brand’s kit, but the UX team might also have solutions ready at hand. The ultimate goal is the same — to have the site ready and live by a certain date. But the method changes: rather than expecting a full-time employee to have the expertise to cover every single need a project calls for, skills are sourced from a global talent pool when needed.
Flexible Teams and Spend Management
By breaking down a project into manageable-sized pieces, SMBs are able to identify the specific skills needed to achieve each milestone. This means the budget can be more closely managed along the way and project creep can be identified before spiraling out of hand.
But that’s not where the benefits end. With the tools available in Liquid’s Contractor Management OS, an SMB’s finance team can have an instant snapshot of a project’s development and cost. Liquid’s built-in reports provide cost vs profit analyses so SMBs can ensure projects stay profitable. Liquid also offers built-in tools to pay your flexible team quickly and securely, whether they live across the city or across the globe. Built-in international wires and local currency exchange mean your team gets paid the full amount of their invoice without intermediary and recipient bank fees. And the best part? Happy teams do the best work.
SMBs, Contractors, and Liquid
Liquid was designed by entrepreneurs who discovered that there was no good, unified solution to managing contractors. Contracts and work orders might be stored on one site, invoices and bill pay on another, and AP/AR still someplace else. Liquid integrates everything you need to manage your contractors and projects with added benefits like automated invoice match, one-button global invoice payments, and standardized onboarding contracts that let you build your bench in less than a minute. If you’re an SMB looking to punch above your weight and maximize your potential with flexible teams, contact Liquid today for an in-person demo.