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Virtual teams, Virtual work, Real Money

Una's note: I'd like to introduce you to Annabel Kaye, who has kindly contributed a post about the legal and HR implications of using freelancers in your business. Whether you're using Virtual Assistants (VAs) or creative freelancers, there's some very interesting examples!

Do you hire freelancers and what has been your experience? Are you a freelancer that can take these points on board to give your clients peace of mind? Please comment and get the discussion going...

Growing a business, managing a team and making it all work profitably is one of the biggest challenges. I have friends who mount expeditions to Everest and the logistics they face are not that different. The difference is, they know they are on a big expedition and they take a long time to plan, resource their equipment and pick their team.

We entrepreneurs prefer to be a bit more improvisational, a bit more last minute and when it comes to paying people – let’s face it – we hang on to our cash to the very last minute. We only give up and get someone in when we really have to.

You are probably looking at freelancers to help you – a low commitment option since you only pay for results or the time you positively need. Sounds great – and it can be, but would you rush to the foothills of Mount Everest and say – I have only two hours, I will hire the next mountain guide who is not already booked? Would you bet your life on it? Yet you bet your business on this kind of resourcing decision.

If you don’t have the right people, with the right relationships, resources and contracts you will find yourself slipping down that mountain very fast and if you really get it wrong you could find yourself in an avalanche hoping to be rescued.

Did you know that freelancers can sometimes seriously damage your brand, your business and your finances?

A management consultancy outsourced their diary booking to a Virtual Assistant outside the EU. She failed to put client meetings in the diary and lost them £5,000 worth of business.

And it’s not just freelance VAs who are not always building your business with you. If your freelancers have any direct access to customers things can go wrong as highlighted by this personal example:

A local mini-cab firm uses only freelancers. They sent me a pre-booked cab that was filthy with no petrol in the tank. The driver went off to the petrol station. We had to ask to go to the nearest station as this made us late. We refused to pay the fare. When we complained the receptionist said, “They are all self-employed – what can you do?”

If you don’t set standards for the people you pay – whether freelancers or not you can find yourself:

  • Losing customers
  • Losing money
  • And doing the work yourself!

Using freelancers as part of your business model requires planning, forethought, management, communication and a firm legal base - to take care that your business is protected and make sure you are not running up tax bills you weren’t expecting.

A growing publishing business was using two part time ‘self-employed’ administrators to help with the paperwork. They paid them by invoice every month. The relationship went on happily for years until HMRC decided the administrators were not self- employed and gave the business a massive, unexpected back PAYE bill (with penalties).

And it’s not all about tax either. You can save yourself a lot of money by going overseas but even then things need to be set up properly.

A children’s toy maker decided to use an overseas VA to keep their mailing list and contact details up to date. They sent their entire client details (including children’s ages and delivery addresses] in a spreadsheet to their VA in the Phillipines (in breach of the Data Protection Act). The data got hijacked and their customer’s children started to get some very dodgy emails and cards. Not only was this catastrophically bad for their reputation and business, but the fines from the Information Commissioner nearly put them out of business.

It takes time to plan how you are going to work with freelancers – the more regularly you need them, the more worthwhile this is. You need a great map of when it is appropriate to outsource (and to where) and when it is not. And you need a great communication and management plan.

outsource abroad

If you are managing complex programmes by email with people who are only awake when you are asleep, you will find yourself frustrated tired, and running behind schedule. So make sure you know:

  • What timescales you are working to
  • What timezones your people are in
  • How to securely share appropriate data (and not break the law)
  • What platforms you will use to communicate and share data
  • Have regular ‘touch base’ sessions pre booked when you start

And set aside the time and attention to build relationships with the people you pay so they can properly understand you, your business and your brand.

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Annabel Kaye

About the Author

Annabel Kaye

Annabel Kaye is an HR and employment law specialist with a real interest in real freelancers and virtual teams. She runs regular free webinars on how to manage and contract your freelances, including preparing for outsourcing. Annabel speaks regularly to business groups and conferences and is a keen supporter of the way we work today. Contact Annabel at her website, by phone: 08452 303050 (local rate call number) or email.

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Mike Gardner is The Time Doctor

Some great tips in here, but on the positive side if you do put the work in at the beginning of the relationship, it can save the business owner a tremendous amount of time, my VA is awesome

    Una Doyle

    Oh my gosh Mike, absolutely building or expanding upon your team by using freelancers and VAs is definitely worth putting the time into getting the relationship right! It’s something that I recommend to all my solo and small business owner clients in fact.

    Sometimes with creatives they wouldn’t naturally do that or might jump into a new relationship because of their natural focus on getting the task done. 😉

Annabel Kaye

My VA is awesome too. There are lots of upsides to having a virtual team – if you plan it properly and chose the right people

    Una Doyle

    Indeed Annabel – selecting the right team is essential, that’s another post (or few!)…

David Wildash

HMRC deciding whether your administrators are self- employed or not is a worrying scenario. As always in business it pays to get the facts first and set up a system that avoids as many potential loopholes and mistakes as possible.

    Annabel Kaye

    I am surprised by how little ‘fact checking’ of any kind business owners put into the process of taking on freelancers. Many think if they get an invoice from their freelancer that is the end of it. Of course if you check HMRC’s site there is guidance on who is self employed, who is a worker, and who is an employee – but many business owners take their guidance from their friends in the pub of ‘what everyone does’ which can go very wrong.

    Yet many accountants prepare accounts with invoices obviously from freelancers but do not raise the question with their clients at all. Others tell me they do advise their clients that their arrangements will not be viewed as self employment when HMRC look at them – but their clients ignore them.

    There is a little bit of delusion in every business owner – that is the bit that keeps us going when everything seems against us – but it is good to use it on things that are affected by our belief. HMRC doesn’t care how much you believe your people are self employed – they just go by the book!

Michelle Poole

Great points: build a relationship, have the time to do this and learn about each other. I find many people don’t do it early enough and then the relationship is strained because there is no time to learn. Try with a small project/task initially and set expectations out clearly – from both parties. Communication is key and being able to have a big impact can only happen if both parties sign up and commit.

    Una Doyle

    Hi Michelle – thanks for your comment.

    Yes it’s a good idea to try with a small project/task from the get go.

    Una 🙂

    Annabel Kaye

    That’s a great idea Michelle.

    What I am seeing instead is that business owners put off finding or paying freelancers until the very last minute – thus leaving no time for a small test project, or communication or commitment.

    There is a distinct tendency to treat freelancers as if they are a commodity that arrive full briefed and ready to go with no need to conversation or feedback or exploration. Sometimes when I speaking to business people they say – “well they are the expert that is why I hired them – why should I tell them what to do?” Of course no-one is an expert on what you are trying to achieve other than you – and if you don’t share that and figure out how to measure if you are heading in the wrong direction, the best expert can get lost and go off and do something that seems useful to them but is not your highest priority.

    Commitment is a big thing and many business owners do not associate that with hiring a freelancer..it is more like speed dating to them!

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