Before you get started contracting out business management, it’s important to understand the different types of contracting. Many different contracts can be used in the business management industry. Depending on your business targets and objectives, there may be a certain type of contract that is most appropriate for you.
If you’re just getting started with your contracting strategy, then choosing the perfect contract management framework might seem like a daunting task. To make things easier for yourself, we’ve put together this list of our top tips for choosing the right contract management framework for your company. If you follow these simple steps, then there is a good chance that your company will end up with the perfect contracting plan for its needs.
Define your business goals.
Before you choose the perfect contract management framework for your company, it’s important to define your business goals. What are you trying to achieve by contracting out business management services? Once you’ve determined what your business’s specific goals are, you’ll be able to better choose the right contract management framework for your business objectives.
For example, a doctor’s office wants to outsource their administrative tasks, but they don’t want to sacrifice quality. To ensure that their administrative tasks remain up to snuff, they choose the perfect contract management framework — a fee-for-service model.
Assign key people.
Just like in any other business, you must have strong leadership and key employees who will be responsible for carrying out your business objectives. In the case of business management services, you will likely have several key positions to fill. Key people will have a big impact on the success of your company. The best business managers have key people on their payroll who report directly to them. This kind of structure allows them to focus on what matters most while keeping everything else running smoothly.
Diversification of contracting resources.
One of the most important aspects of any contracting strategy is diversification. This is the idea that by contracting out different areas of your business, you’re making sure that each person and their particular task doesn’t become overworked. There are many different types of diversification, but one of the most important is outsourcing.
Outsource as much as you can! One of the best ways to diversify your contracting services is to outsource your administrative tasks. You can outsource your tasks, printing services, and other administrative functions to a third-party HR services provider. This will ensure that you’re not lagging behind your competitors in terms of your administrative skills.
Be strategic with your contract terms.
When you’re choosing the right contract management framework, you need to be strategic with your contract terms. You don’t want to put your company in a position where it’s running up against a tight deadline and has no choice but to accept a bad contract. While you rightly want to avoid this, you also don’t want to be so tight-fisted with your business’s finances that you wind up with nothing to show for your contract work.
For example, let’s say your company has a strict No Show (frequency and duration) policy. In this case, you won’t be paid if you don’t show up for work. If you have to miss a few appointments, that’s no big deal. However, if you have to miss a lot of meetings, that could show up on your invoices. If you have to miss too many meetings, then you might have to pay a penalty. When it comes to contracting out business management services, you need to be strategic about how you manage your money. This is particularly important when managing a small business with limited financial resources.
Set up a management audit.
When you’re choosing the right contract management framework for your company, you need to set up a management audit. When you sign a contract with a third party, you should perform an audit to make sure that your terms and conditions are being followed by the letter. You should conduct a basic top-down assessment to make sure that the contractor is following proper procedures. This might mean asking the contractor to provide you with a signed statement certifying that they have followed proper contracting procedures.
Keep learning and make changes to your framework as needed.
When you first start contracting out business management, you may feel like you’re on a sound footing. However, over time, your contracting strategy will need to be updated frequently. This is a normal business practice, and it’s necessary when you’re contracting out business management services.
When your business grows, you’ll want to expand your contracting strategy beyond simply signing new deals. To ensure that you stay on top of new contracting techniques, it’s helpful to keep a regular audit trail. Keep your business records up-to-date, and keep your contracting documents up-to-date. This will allow you to easily identify and correct any problems you’re running into.
Bottom line –
When you’re choosing the right contract management framework for your company, you need to be strategic with your contract terms. You don’t want to put your company in a position where it’s running up against a tight deadline and has no choice but to accept a bad contract. While you rightly want to avoid this, you also don’t want to be so tight-fisted with your business’s finances that you wind up with nothing to show for your contract work.
When you choose the right contract management framework for your company, you’ll have the flexibility to choose the right type of contract for your individual needs. While there are many different types of contracting, we’ve outlined five of the most common types that you may encounter — fee-for-service, cost-plus-fee, cost-only, fixed-fee and cost-plus-management.