What’s the Difference Between a Consultant and a Contractor?

If you are a small business owner trying to figure out your next big move, you may contemplate hiring the services of a consultant or contractor.

Consultants and contractors can both assist you by completing activities that are tailored to your individual requirements. But what’s the difference between them?

Consultant vs contractor

Simply put, a consultant gives you advice and preliminary counsel based on your requirements. This can include suggestions for strategy, human resources, software adoption or public relations, all of which are usually related to a specific project. As part of a larger business plan, a consultant could advise a business owner on how to work with a contractor.

Contractors, on the other hand, will be employed to fulfil a specific service or complete tasks that have been outsourced to them. They usually have more influence over the tasks and methods they use to complete a project. Contractors can assist with activities that require specialised knowledge, which is beneficial for companies with limited resources.

Using the Services of a Consultant or a Contractor

To engage a consultant, you must first form a consultancy agreement, which should include a full explanation of your company’s endeavour as well as the consultant’s expected tasks.

You can start by finding a Consultancy Agreement template that you can then modify to create your own contract. Ensure that you have the final contract checked over by a legal expert.

A written agreement, known as a contractor’s agreement, is required to hire a contractor.

Benefits of Hiring Consultants or Contractors

There are a variety of reasons to hire consultants and contractors to help your company. The following are some of the key advantages:

• Outside perspective: an impartial opinion can be critical, especially in cases where you want to improve a certain aspect of your organisation.
• Specialised experience: by using their technical and practised talents, contractors and consultants can actively assist your company’s growth.
• Cost savings: hiring independent contractors or consultants is generally cheaper than paying employees’ salaries and benefits.
• Flexibility: consultants and contractors are normally hired for a specific amount of time, and there are no long-term obligations once their contract expires.

Does your business need outside help?

From time to time, your small business can benefit from some external assistance. One of these times is when you are looking for the right business insurance.* Luckily, BizCover is here to help!

At BizCover, our simple to use online service model makes obtaining insurance for your business a breeze. Go online or give us a call on 1300 920 864 to see how we can help protect your business.