The Emerge Business Model – Subcontractors vs Employees

17 Nov The Emerge Business Model – Subcontractors vs Employees

When I first started Emerge Marketing Solutions, I knew I wanted to utilize a different business model than typical marketing agencies. Priorities for my entrepreneurial journey included:

1. The flexibility to raise my children and support my family.
2. Empower women to keep their creative juices flowing whether they have worked their way into management and no longer do the hands-on creative work, want to earn extra money, are taking a leave of absence from the workforce to raise their kids, or simply want a creative outlet.
3. Provide the strategic and creative marketing services rural businesses, organizations, and communities needed to elevate themselves in the marketplace.
4. Live and work in rural Iowa, having a successful career charting my own destiny.

I quickly decided that having a network of subcontractors rather than employees would enable me to start faster, adapt to client needs more efficiently, and allow for the greatest success in starting up the business. Additional advantages of utilizing subcontractors versus employees included:

Cost Efficiency

Subcontractors are typically responsible for their own taxes, insurance, and benefits, which reduced the overhead costs for our company. This made it more cost-effective to work with subcontractors, especially for short-term or project-based work.

Flexibility

I could hire subcontractors on a project-by-project basis, allowing me to scale our workforce up or down as needed. This allowed flexibility for the subcontractor so they could work on projects when they had time and availability and take time off when they were busy.

Specialized Expertise

Each one of our subcontractors have specific expertise or skills in a particular area, such as video production, graphic design, creative writing, or website development, which is valuable for the variety of projects we work on. I was able to tap into their expertise without having to hire a full-time employee for each specific area.

Reduced Administrative Burden

As a small, start-up business, this allowed me to spend less time managing employees (such as administrative tasks including payroll, taxes, benefits, and HR responsibilities) and more time working for our clients. Subcontractors handled these aspects themselves, relieving the company of some administrative burdens.

Geographic Flexibility

Since I had a network of talented creatives from across the state and country, this allowed me to work with them despite their geographic locations. I had also recently moved to a new location in which I didn’t know anyone, so I wasn’t limited to the talent pool in our rural, local area.

Scalability

Subcontractors can be easily added or removed from projects as needed, making it easier for me to scale our operations without having the long-term commitment of hiring permanent employees.

So, with that I set out to engage with many of the creative professionals I had met and worked with over the course of my career.  I enjoyed reconnecting with these professionals and being able to keep in touch with them to hear how their lives and careers were going as well as talk about our vision for the future with Emerge.

What started out as two subcontractors working nights and weekends approximately 10-20 hours per month quickly became five subs and eventually 10 subs. I found out very quickly that I needed to implement effective processes that would streamline the need to send emails or have phone conversations every night about projects we needed support on as well as activate the right people at the right time to do the services we needed so that I wasn’t spending most of my time ‘doing’ instead of ‘leading.’

After year one, we implemented the use of the Asana Project Management system which was a life and time saver. It keeps our team connected, allows all communication for projects to flow through succinct project tasks, and allows everyone involved in various projects or serving a variety of clients to be up to date at any time with the status of projects.

A critical element in the effective implementation of the subcontractor model was that I had built trust and rapport with these professionals, was able to communicate effectively on each project’s needs and client’s vision, and had implemented systems to effectively keep everyone on the same page with project status.

While I never thought I would have employees, as our workload increased and client needs increased, so did our administrative needs. I realized that I needed a full-time employee available to work during the daytime hours. Katie, our first Emerge employee, was hired in January 2020. While her expertise was video production, and that added a new element to our service line, what quickly evolved was her ability to be a project manager.

Today, Emerge now employs two full-time employees providing project management, creative writing, video production, media management, and graphic design services (among many other tasks as assigned), as well as two part-time employees who oversee the administrative duties such as accounting/billing/accounts receivable, sales, and event planning. We also consistently have 3-5 subcontractors working on projects monthly, however our subcontractor needs have waned for the short-term while we effectively scale the business. I anticipate that when project managers are fully-trained and client work-loads increase we will reengage our subcontractor network more fully, making the most use of talented creative professionals across the state and country.