Contract vs Project

StuartH · Jan 22, 2008

Hello,
Im looking for some advice on working methods.
I am part of a small company in the UK. We Mostly do large projects but we do a little daily rate work. Due to most of our work being projects we often end up with a cash flow issue between payments
I was looking at the possibility of using a recruitment agency to give a more constant cash flow. It would be mostly short contract work. We cant commit ourselves for too long.
Anyone got any advice? or any other options for short term work?
Thanks,

keithb · Jan 22, 2008

Hi Stuart

I also work for a small UK company doing small and medium sized projects with the odd large one thrown in. We very occasionally use contract programmers, but we use a couple of guys that we have built up a good relationship over the years. In my experience, contract PLC people can be very expensive if hired through an agency. We also use contract electricians and wiremen through an agency, mainly for site installation work or panel building if we get busy.

We try to run smaller projects alongside the larger ones to help with the cash flow.

StuartH · Jan 22, 2008

Thanks Keith,
Do you know the recruitment agency you use? I may have a look for adds to see if we can deal direct. We have a few customers who use us on a daily rate but not many.

Doug_Adam · Jan 22, 2008

Slightly off topic here, but we generally hire companies similar to your company for projects.
So as to not destroy these companies due to cash flow problems, we generally stage our projects to have each stage completed in about a month, with payment following. If you can negotiate a structure like that, you may get over your cash flow problems. You could also sell it as low risk for the client...

StuartH · Jan 23, 2008

We always try to negotiate stage payments but some are better than others. We generally only do 100% upon completion on small jobs. The small contract work im after would be a quick cash fix when we feel we may have a cash flow problem

Jon R · Jan 23, 2008

The company I work for does work in the construction industry and we use Milestone payments (or staged payments) whereby the customer pays when agreed targets have been reached, such as design, documentation etc.

While your projects may be small this is a much better way to do it, as it cuts the risk for both parties as Doug suggested.

Jon

StuartH · Jan 23, 2008

I have a friend who does recruitment.
He suggested making a CV for the company then posting it on employment websites. Is this a bad idea for small buisnesses? As i see it, it cant hurt. We can always turn offers away

SLC_Integrator · Jan 23, 2008

Recruitment agencies and headhunters can be a nightmare.

They sometimes fluff up CV's so you end up with people who have no idea what they are doing and also inflate the rates so they can take a huge cut. If I were you I would look at subbing in another contractor, get an agreement & mark them up.
That way you get the cash in for very little hassle, plus your using a reputable company rather than clueless agencies that only care about their cut.

StuartH · Jan 23, 2008

Do you mean we should take on contractors? The reason i was looking at recruitment was for other people to find us extra work for quick cash. We cant provide enough work for a contractor at the moment.

krk · Jan 23, 2008

StuartH said:
...I was looking at the possibility of using a recruitment agency to give a more constant cash flow....

Yes - it's a good idea in situations like this, on top of the extra cash it's a great way to network and meet other contract engineers (and possibly prospective new clients)

StuartH said:
...it would be mostly short contract work....

This may not pan out quite as you hope...large, long term projects are more likely to use contract engineering staff from an agency.

StuartH said:
.....suggested making a CV for the company then posting it on employment websites....

It's better to approach employment agencies as an individual, if they know you are part of a contracting company already they won't touch you with a barge pole as they will be too worried about you poaching clients/existing staff (see above).

StuartH · Jan 29, 2008

Thanks Krk

Im going to put one on and see what comes of it

curlyandshemp · Jan 29, 2008

StuartH said:
Hello,
Im looking for some advice on working methods.
I am part of a small company in the UK. We Mostly do large projects but we do a little daily rate work. Due to most of our work being projects we often end up with a cash flow issue between payments
I was looking at the possibility of using a recruitment agency to give a more constant cash flow. It would be mostly short contract work. We cant commit ourselves for too long.
Anyone got any advice? or any other options for short term work?
Thanks,

Feel your pain, been there done that. We started off small, 2 guys almost 2 years ago. The first couple years were brutal. It was not until we got large projects that the cash flow increased.

What are your payment terms with cutsomers?

We generally start off with 30 - 40 % up front. You can never buy a car or a house without a downpayment. We also stay on top of progress billings to ensure that by the time we arrive on site we have all hardware and any labour to program/ panel build is also covered.

I see one potential problem if you are contracting you services to someone else, the more you are removed from the customer, the farther down the payment list you become.

Ian

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