What we're talking about

If you're seeking an extra pair of hands or need a specific skill set but can't make the long-term commitment of hiring a full-time employee, it might be time to hire a freelancer. Whether it's graphic designers, copywriters, marketers or coders, freelancers can add enormous value to a business' operations. For small businesses, it's quite normal to develop working relationships with numerous freelancers – which may well evolve into full-time roles when circumstances allow. 

Hiring a freelancer is obviously a far lesser commitment than hiring someone on a part-time or full-time contract. Freelancers are in charge of their own time and deal with their own taxes. They'll typically charge a flat fee per project or bill by the hour or day, and you'd usually expect to work with them part-time, for a fixed period or on a more ad hoc basis. 

Why it's important 

In the unpredictable small business world, working with freelancers offers flexibility and essential expertise where and when you need it. Provided you find the right people, you can expect a high level of quality and output, with relatively minimal effort on your side – the only obligation being to pay them for the work they do. 

A major survey from LinkedIn suggests that 83% of small businesses that work regularly with freelancers see great value in their contribution. 

But, like hiring anyone, assuming a freelancer will fix all of your problems is naive. Working with a freelancer requires proactive communication and a system in place so that both sides have what they need to get the work done on time. That means creating standards before hiring, concerning the scope of the work, the interview process, how you'll manage intellectual property, onboarding and your payment schedule. If you don't, you risk letting low-quality freelancers through or mismanaging projects and expectations.

Things to note

You'll need a contract. Any freelance project should have a contract that covers elements such as payment terms (the amount, any deposit, cancellation terms, time from invoice to payment); the scope of the work (outlining the objectives); a timeline (start date as a minimum, but ideally the length of the agreement); and clarifying intellectual property rights. At the very least, these should be clearly outlined in an email as separate points. 

Be mindful of how much you're paying. Most freelancers have an independent understanding of what their work is worth. That traditionally might have been an hourly or day rate, but more savvy freelancers increasingly charge by value-based objectives. That means a rate based on deliverables and deadlines rather than hours. Remember, you're paying for them to solve a problem, rather than their time. You'll need to answer the question: how much is that problem worth to your business? 

You can look across borders. One perk of working with freelancers is that they don't always need to be based in the same place as you. This offers a wider and more diverse talent pool, but it also means that you'll need to be aware of time differences, language, cultural differences and compliance issues. It's not quite as simple as jumping straight in.

Build a network. The reactive nature of freelancer hiring isn't particularly sustainable – and it can be a huge time drain and stress inducer when you need external help at short notice. It should be a priority to think about the areas of expertise your business needs (eg, writers, graphic designers, coders) and to continuously build up a network of freelancers that you can readily contact when their input is required. A relatively small percentage of successful freelance work occurs through active outreach – the vast majority occurs through network building.

How to hire a freelancer 

1. Work out what you need. Outline your outcomes and objectives. Think about your long-term goals, the level of expertise you need, how much agency the freelancer will have and an estimated time commitment. For example, is this a one-off or an ongoing thing? Estimation here is to be expected, as you may well build a tighter brief with the freelancer later – especially if they're an expert.

2. Work out your budget. When it comes to determining pricing, there are three factors to bear in mind: the inputs (eg, the freelancer's time, equipment, level of expertise), the product itself and the value of that product to your business. You might research average rates for what you're contracting in your area as a starting point. Consider if there are ways to boost your appeal if you can afford only a lower rate. 

3. Start building your network. There are lots of ways to track freelancers down, but the more targeted you are, the less sifting you'll have to do. If you don't have a network to call on, you might start with an open call on your social media or list the role on a job site. Alternatively, you can scout people out directly, looking online or via your network and individual recommendations. Specific websites exist to hire freelancers, including Fiverr, Upwork and 99designs. Be aware, though, that you should be open to finding out that what you actually need is different from what you originally thought. 

4. Check their process. Provided your search reveals a few people as options, make sure they're a good fit for your business. Due diligence should include three areas: the quality of their previous work (check out portfolios and examples), their process (have they worked with businesses before? How will they work for you?) and whether they understand your objectives.

5. Speak to them. At this point, you'll need to have an initial conversation. This could be in the shape of a more formal interview or something more casual. You might ask them to interrogate your brief or produce examples of historic work – but don't ask them to produce new work. 

6. Outline the brief. Provided you're happy, it's time to flesh out the brief, whether that's via email, phone or in person. Here you'll provide those details that weren't in the job description, but it's fundamentally a two-way conversation that comes back to your objective setting. The freelancer should come away with an idea of what's expected and when, and how they'll be managed. You should come away trusting their commitment to the project. 

7. Formalize it. Set your expectations down in a contract. Beyond clarifying the basics, it's a crucial means of avoiding misunderstandings further down the line. For example, you can designate who owns the work created and the intellectual property rights. It's worth getting some legal help here to draft a contract that you can use with freelancers again and again in the future. 

Key takeaways 

• Bringing in external expertise in the shape of freelancers can be hugely beneficial for a small business – and not because it's cheap labor. 

• The key question to answer when it comes to your budget is what the problem is worth to your business. That'll be tied into your overarching objectives. 

• The idea is to build out a network of freelancers that you build trusted, long-term relationships with – and can call on when their input is needed. 

Learn more 

Perspective. Hayden Brown, who runs freelancer-sourcing platform Upwork, shares her views on how freelancing is changing work. 

Example. Via art and design community BoredPanda, here are 50 freelancers talking about what makes a ‘client from hell’. This should help you out with what not to do. 

Tool. Here are a bunch of freelance contract templates via money transfer platform Wise. And here's an infographic from investment firm Headway Capital that goes into more detail on some of what we've talked about here. 

A version of this article was published in the Courier Workshop newsletter. For more deep dives into essential business concepts, sign up here.