Providing Outsource Services

Introduction

Outsourcing is a great way for a company to fill a temporary need or to hire expertise they may not have within their own organization.

The people or companies a business hires to provide temporary labor or expertise are called contractors.

Finding, communicating, and building relationships with other businesses is important to a contractor. These relationships are often defined by a contract.

Providing Outsource Services

Section 1Employment Opportunities in Contracting

Contractors are entrepreneurs. They are hired by a company to perform a specific task and they receive payment for their services, but they are not employees.

Contractors, and the companies that hire them, formalize their agreement by writing and signing a contract.

Contracts are written following strict, legal guidelines. Every word of a contract is important.

Providing Outsource Services

Section 2The Role of Contracts in Business Relationships

A contract can strengthen the relationship between companies:

• The negotiation process helps companies learn about each other.

• A written agreement helps avoid misunderstandings.• Contracts help build trust .• Defined terms help companies plan.

Every business operates as part of a larger community. The employees that work in the business, the neighborhood, town or country where the business is located, the suppliers and customers of the company are all part of the business environment.

There are many different types of contracts used to define relationships within the business environment. A few examples include:

• A purchase contract between a purchaser and a supplier• An employment contract between an employer and

employee• A partnership agreement between company owners

Providing Outsource Services

Section 3The Request for Proposal

A request for proposal is a written document outlining, in detail, what the purchaser wants to buy.

The contractor’s response to a Request for Proposal is a Bid Proposal. The Bid Proposal provides all the information requested in the RFP plus the amount the contractor will charge.

Bid Proposals are prepared very carefully. If the hiring company accepts the proposal, it becomes a legal contract.

Contractors are often asked for proof of the claims they make in their bid proposal regarding their experience, their financial resources, and their equipment resources.

Providing Outsource Services

Summary

The characters in the case study reach their goal of becoming contractors and providing outsource services to a large company.

Along the way they learn:

• The definition of contracting• The value of contracts• How to use contracts to strengthen their business

relationships• How to find and respond to companies that are

seeking contractors.

We hope they inspire you to move forward with your own business ideas!