4 min read · Written by Grant Rayner on 25 Oct 2023
Share by emailAs an independent security professional, your biggest limitation is your time. If you’re only providing services, your revenue potential will always be a factor of the time you’re available–and willing—to work, multiplied by your rate for that time. You’ll have limited options to grow your revenue, as you can only work so many hours and can only increase your day rate so much.
One solution is to use subcontractors to deliver some or all of your services. By doing so, you can expand the number of projects you can manage at one time. You can also take on larger projects that require multiple people.
The focus in this context is on subcontractors that you hire to deliver a major part of a project, as opposed to a contractor that would only assist you with a minor task.
In this article, I’ll explore some of the benefits and risks associated with using subcontractors. This information will help you to make an informed decision regarding whether or not to use subcontractors in your own business.
As an independent security professional, subcontracting provides a number of important benefits.
The key benefit of subcontracting is that you’ll be able to scale your business. If you have multiple subcontractors, you could run multiple projects. Achieving scale is the key to growing revenue over time.
Related to scale is the fact that using subcontractors will enable you to deliver large projects that you would be otherwise unable to deliver as a single consultant.
You can hire experts in specific areas of security that you may not be familiar with, enabling you to offer a broader range of services to your clients.
Using subcontractors to deliver services in non-core areas frees you up to focus on your core competencies. This aspect is particularly important to you as an independent security professional, because your clients will be expecting you to personally deliver specific services. However, if a client wants a service that’s not in your stated area of specialisation, there’s limited downsides to bringing in a subcontractor to deliver that service.
You can source subcontractors from different locations, allowing you to deliver services in those locations. This approach is particularly valuable for smaller projects, where it might not make sense to deploy to the location yourself. There are also advantages in using subcontractors with detailed knowledge of a specific location to deliver services in that location.
Of course, subcontracting isn’t without some serious risks that require careful consideration before you start hiring.
Subcontracting comes with a number of inherent risks. I’ll describe these risks below, and offer some thoughts on how you might mitigate them.
Potentially the most significant risk relating to the use of subcontractors is the quality of service delivery. One way to assure high quality deliverables is to document the delivery process and to provide templates for delivery. You can also run training for your subcontractors so they understand the process of delivering the particular services. Even still, there’s always going to be a risk that subcontractors won’t deliver the service to your standards.
If you’ve sold a service to a client, it’s likely they’ll be expecting that you’ll be the one to deliver that service. If you plan to subcontract some or all of the work on a project, be sure to let your client know well in advance. If not, you may fail to meet their expectations and they may be less willing to trust you in the future.
The more serious risks relate to clients, future revenue, IP and confidentiality.
When delivering a project on your behalf, it’s only natural that the subcontractor will develop a relationship with your client. The subcontractor may choose to continue this relationships without your knowledge after the project, depriving you of future revenue from the client. It’s difficult to avoid this dilemma. The best approach is to ensure your contracts with both your clients and subcontractors contain specific clauses to deter them from working together after the project. You should also ensure that you build strong client relationships so that your clients are less likely to work with other consultants.
Depending on the types of projects you use contractors for, it’s possible that your contractors will have access to your IP. If they have access to your IP, they will almost certainly take it. They may use your IP with this own projects. Alternatively they may adapt your IP before using it. You will never know this has occurred and it will rarely be practical to take legal action. One way to manage this risk is to involve contractors in relatively menial tasks that don’t expose them to your most important IP.
Subcontractors may have access to sensitive client information. You’ll need to consider the implications of this access, and ensure that you have strong legal agreements in place to protect your interests and those of your clients.
If you’re using subcontractors, you’ll need to ensure you have appropriate legal contracts in place with them. You’ll also need to manage their invoices and payments. These tasks take time and effort that may distract you from other priorities.
Using subcontractors will reduce your margins. You’ll need to balance this against an overall increase in revenue. Let’s look at an example:
You deliver a project worth $15,000. The project takes 10 days to complete. Your profit is $15,000 and your margin is 100%.
You subcontract a project. The revenue is $15,000. You pay the contractor $1,200 per day. Your profit is $3,000 and your margin is 20%
The variable here is what you pay the subcontractor. If you want a high quality subcontractor, anticipate high rates.
Overall, unless you have multiple concurrent projects—or better things to do in general–there are limited financial advantages to subcontracting just for the sake of it. You’re better off trying to schedule the projects so you’re able to either manage two projects concurrently or deliver them consecutively.
Aside from the points above, another key factor to consider is that there aren’t that many experienced individuals available for subcontract work. In practice, you’ll find this aspect to be a significant impediment.
You could argue that, given the risks described above, you’ll need to be very selective regarding how you subcontract project work. You’ll need to be prepared to lose whatever IP to which the subcontractor has access. You’ll also need to be prepared for a scenario where your subcontractor takes your client.
Before you consider subcontracting work, make sure you’ve done all you can to integrate efficiencies into your business. Doing so will help to free up time for project work and limit the requirement for subcontractors. If you do need to subcontract work, make sure you have solid legal agreements in place and use subcontractors for work that doesn’t expose them to sensitive information and weak client relationships.
Thanks for reading.