Subcontracting for your SME | TranZact

May 31, 2021 in Documents



Do you think subcontracting can help to grow your business? Ever thought how it effects your business, specially during the growing years? In today's article, I would discuss about how subcontracting can impact your SME. So without any further delay, lets get into it.

Subcontracting helps to focus on the bigger picture

Yes, you heard it right, subcontracting helps you to assign simpler tasks to people who can conveniently finish them off. You, on the other hand, can focus more to develop more on complicated tasks which requires niche attention and expert supervision. Do you know, why government is working on public private partnership? Its because, by the PPP model, both parties are benefited. The task of government is also simplified, as well as the task of the corporate partner. This is a live example of subcontracting.

Subcontracting helps to save resources

When you try to do all the things by yourself, there are chances that you may end up using more resources. This happens because, you cannot be an expert in all the things that you have taken up in your hand. You might be good at one or two things, but then, no one is good at all the things they are doing. So in that case, you would end up using resources not in a way they are supposed to be used. So, a better way is, try assigning the tasks to other contractors, whose sole job is to do that particular task for their living. In that regard, they would be knowing which resource should be used upto what extent.

They pay their own taxes, benefits, and vacation and sick time

From a business point of view, its far more beneficial, when you hire subcontractors in comparison to permanent employees. This is because, the contractors would be paying their own taxes. They will take leaves judiciously and they will be punctual in their own work schedule. What I mean to say by this is, even without monitoring, they can do their work. No need to have a boss or manager for supervision. This saves capital investment for a budding SME.

They’re easy to let go of if you’re not satisfied with their work

As the title suggests, this is one of the most crucial point when you are assigning subcontractors for your work. Its eminent, that even after not delivering proper results, it is very difficult to fire some employee. There are moral grounds, compassionate grounds, and a lot of things attached with firing a person. Now, let me finish. When it comes to assigning jobs to subcontractors, then these all things doesn't count into the picture. The day you feel that your work is not being done the way it has to be done, then that day you may terminate the contract.

Retaining employees can sometimes be challenging in some industries

If you have any of your friend working as HR manager, then ask him/her, how difficult it seems sometimes to retain employees. Most of the times, hiring a permanent employee will bring on added responsibilities like paid holidays, good health care facilities, good working ambience etc. All these things may add up extra taxation to your SME, specially when you are in the growing stage. Moreover, if you are tight on your funds, then its not at all a better idea to have more permanent employees. Rather than that, subcontracting helps you lot in this regard. You will get your job done faster, since they usually work extra hours to get the contract tenure mature.

Still wondering whether subcontracting is the right thing for your SME? Well, you can try using our software, TranZact, to check that out. We have specialized services, developed on cutting edge technology, to get your subcontracting job done digitally. In modern day, its only a mouse click away, to check all the details of subcontracting in your laptop. If you like my article, please share it more, give a thumbs up and stay tuned for more such articles.

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TranZact is a team of IIT & IIM graduates who have developed a GST compliant, cloud-based, inventory management software for SME manufacturers. It digitizes your entire business operations, right from customer inquiry to dispatch. This also streamlines your Inventory, Purchase, Sales & Quotation management processes in a hassle-free user-friendly manner. The software is free to signup and gets implemented within a week.