Scaling using freelancers is better (at first) than scaling with employees. Either way, you need to avoid the trap of being a mid-sized consulting company.
Here's an article of mine detailing the math behind this trap, and some challenges you'll face, and also a list of ways to combat this trap: http://blog.asmartbear.com/consulting-company-accounting.html
I started my first company in Houston TX, with freelancers doing different things in my company. Such as Virtual assistant, graphic designer, content proofreading and online publishing. They were one big reason for my success. I still use some virtual assistants for different tasks. So coming back to your question it is possible to do it but you have to take some precautions. I will list and explain few things that are essential below.
1- Make sure you have a agreement - that describes exactly what they are being hired to do, terms and conditions that you have, how payment will work. This will save you a lot of hassle if you put all expectations down in the agreement.
2-Rights to your work - Make sure you have a clause in the agreement that they are being hired, specially in United States. Example: the freelancer designs a logo for you for your clients. unless the agreement says so you technically do not own the product.
3-It is easy to think once you have been working with a freelancer for a while to slack of on the details. since they are not regular employees. you need to provide them with as much details as possible.
4-Unless the freelancer is working with you full-time, he might have other clients. make sure to have detailed timelines for each project.
5-When hiring a freelancer ask for a portfolio and past work they have done, another thing is to ask them how many clients they deal with and what is there turnaround on services.
It is not as horrible as you think. There are very few that might screw you over. But if you follow information provided above you will be fine. I like the fact that brought up a great question it is always good to be cautious in the beginning. If you need any help in looking for freelancers or where to look for them and how to manage them to be cost effective. Give me a call with any question you might have.
Here are a couple tips that might help:
- Have excellent systems / project templates
- Make sure you have a white label agreement in place.
- Don't over extend yourself, meaning it's great to do projects you don't have the skills for but if you take on too much outside of your understanding, you will find the quality of your projects are not great and your stress levels will be high.
- If possible, hire them full time, this way they learn your systems and they become part of your team. It's the next best thing to employing someone. This approach does take time, as you need to train them but the long term benefits are great.
Please let me know if you need anymore advice and I hope the above helps.
What has worked for us in my firm is analyzing your bottom line. Keeping your best, most productive, and most cost efficient co-workers is the key. Period. It does not matter whether they are consultants or employees.
The questions I ask before deciding on scaling employees or consultants are these:
1. Who is more productive, the employee or freelancer?
2. Who is more cost efficient, the employee or freelancer?
3. Who will give me a better return on investment (ROI)?
There is nothing wrong with scaling employees for freelancers as it always happens in today's economy as long as those freelancers give you a better return on investment. If not, then keep your employees and maybe have one freelancer for the really technical stuff.
I can show you some of my documentation on this if you'd like if we do a call.
I am a freelancer and I have paid freelancers. You could use them to scale your web development/design firm. Anyone can be a freelancer, and that is why you must be careful. I assume that you are using a site like freelancer.com. They act as a middle man and can protect you, to an extent, against scams. It is important to be extremely specific when asking for a product. I can not tell you how many times I have had to ask and re ask clients what they want. This leads to a bad working relationship and it drags out the process. My tip(s) would be to look for someone with a portfolio in your area of interest, write out ever detail of what you expect in the product your are hiring out including stuff you may think is self explanatory. Remember, you are the boss. You do not have to pay for a product that is not to your specifications. Never drag out a free lance deal. If they are not producing quality work and you have went through 20+ emails making corrections and reworks, then just save both of you time and select another of the 10k+ "experts" on freelancer. My personal experience with hiring free lancers has been overall satisfying. You could save a great deal of money.