As a new independent web worker, you’ll face many decisions, from which color envelopes to buy to what to name the company. But there’s one decision with such huge consequences that it overshadows almost all of the others: whether – and how – to work with others.
Here’s the basic quandry: as a lone wolf, you’re limited in the size and scope of contracts that you can undertake. Eventually, a potential client is going to approach you with a job that can’t be completed by one person in the time allotted. What do you do then? Either turn down the work, or figure out some way to split it up. If you go for the latter choice, you’ve still got a number of options to choose from.
Hire Staff – This is perhaps the most traditional way for a budding entrepreneur to grow a company, but it’s also one of the most stressful. You need to deal with advertising and interviewing (unless you decide to hire friends, which has its own set of pitfalls), negotiate salaries and benefits, and navigate a complex set of legal and accounting requirements. Companies like ADP or Paychex can make the paperwork simpler (and keep you out of trouble), but having employees still represents a paperwork burden for the small company. It also means devoting some of your time to managing rather than the work that you thought you were going to be doing.
Use Subcontractors – You can keep control of the overall job with somewhat less paperwork overhead by subcontracting chunks of work out. The key difference between employees and contractors is that contractors work without supervision, after being given an overall task to do. Don’t ignore this distinction; if you do, you can find yourself in a peck of trouble with the IRS. You’ll still need a solid contract in place to make sure everyone is in agreement about matters of pay, IP, and tasks to be performed.
Take on Partners – If you’re not interested in setting up a hierarchy, how about a group of equals? There are many business structures, including partnerships, LLCs, and LLPs, that allow more than one person to get together to share income, expenses, and work. Take any such deal very seriously: a partnership is like a marriage, and splitting one up can be as messy as a divorce. But with the right group of people and a shared vision, it can be a great way to tackle work that no one partner could do alone.
Split it Informally – If the work is completely partitionable, it may make sense to just split it with someone else. That is, tell the customer “I can handle the database programming, and I know someone else who would be perfect to do the HTML for the site” – and then use your network of contacts to lay off the HTML to another web worker. This can be a good strategy if you have enough contacts that you get work in as much as you send it out, and if you don’t have any real interest in empire-building on your own.
Whatever you decide, be sure to get professional advice. The moment you grow beyond a single person, having a good lawyer and a good accountant in your corner is more critical than ever!