# 3 Questions to Ask Before Searching for a Service Provider | Capterra > In need of support for your small business? Service providers can offer just that, and these 3 questions will help you get your search started off strong. Source: https://www.capterra.com/resources/outsourcing-service-provider-process --- Business StrategyProfessional Services # 3 Questions to Ask Yourself Before Searching for a Service Provider By Gary Froniewski Gary Froniewski Gary Froniewski is a Content Writer at Capterra, covering all things digital marketing, with a focus on emerging trends in experiential marketing. A recipien... [See bio & all articles](https://www.capterra.com/resources/author/gfroniewski/) Published February 24, 2023 6 min read ## Ready to start the search for outside help? First, ask yourself these questions. If you’re a small business leader embarking on the process of hiring a service provider (potentially for the first time), it’s crucial to be thoughtful as you prepare. The last thing you want when hiring a service is to realize halfway through the selection process that you should have spent more time sourcing options or better defining contract terms.  Small business leaders who are hiring a service provider for the first time are especially vulnerable to missteps like these since they may not know what kind of information is most important to have on hand before kicking off their search.  To that end, we'll share three key questions you need to ask yourself based on insights from a survey[\*](#methodology) of business leaders who recently hired a service provider of their own. #### Why hire a service provider, and what does it take? Outside service providers offer many benefits over doing things solely in house. Visit our article [Here's What You Can Expect When Hiring A Service Provider](https://www.capterra.com/resources/service-onboarding-process/) to learn more about the benefits of hiring one and the phases of the search process. Free download Download our free Service Provider Scorecard and assess your service providers. [](#signup) ## Question #1: What kind of service provider contract are you looking for? The first question to ask yourself before beginning the search process is what type of contract best suits this relationship? ### Retainer Hiring a service provider on retainer represents an **ongoing relationship** that ensures you have support whether or not you have a specific initiative to task them with. This type of contract is best suited for organizations that need general help with their business dealings—whether it’s daily tasks, ongoing reporting, or strategic planning. **How much does a service hired on retainer cost?** Services hired on retainer typically follow an hourly pricing model where you pay a specific amount for every hour of work the agency does. While most agencies follow an industry-standard rate, you may choose to have a custom pricing structure especially if you want to hire more experienced specialists. ### Project based Hiring a service provider on a project-specific basis is more for one-off initiatives that require outside support or expertise. Some examples include product launches, large events such as conferences, or backend projects including site migrations, data security, and website development. **How much does a project-based service provider cost?** Many services follow a pricing model wherein they estimate the entire project cost with the client beforehand. This model works best for long-term marketing projects. Agencies that follow a project-based model usually ask for an upfront fee of 15-20% at the start of the project. In **Capterra’s 2022 Services Users Survey**[**\***](#methodology), we surveyed 1,078 past service purchasers from US-based small to midsize businesses to see how they navigated the process. We found that 61% of SMBs hired services on a retainer or continual basis while 38% hired on a project-specific basis.  Interestingly, out of the 1,078 services users surveyed, 331 of those ended up switching their contract approach, listing changes in scope and cost savings as the most cited reasons. This means that—while businesses may initially determine one method is appropriate—they often alter course based on changes to the project. Ultimately, it’s okay—and even common—to switch your contract approach, especially if it ends up benefiting your bottom line. When planning out a project that a service provider will help with, pay special attention to scope creep and the effects it could have on your partnership. Getting this right early will help you save money at the outset and potentially time and energy managing a continual relationship in the long run.  Making use of this finding for my business Seek to fully understand the capacity in which you're hiring the service provider _before_ you begin the search process. It's possible that as you dig into the requirements for your growth areas you might realize the answer is different than you originally thought. ## Question #2: Is there a list of pre-approved options guiding your search process? The next big question after settling on the type of service contract is to determine _how_ you’ll be finding your new provider. According to our survey data, 18% of SMBs do _not_ undergo a search process for a service provider. Of those, 52% need to choose from a list of approved vendors and 35% choose a vendor that an internal stakeholder has in mind.[\*](#methodology) - **On one side of the coin**: Having some guardrails for your provider choice can be a good thing. Narrowing down your options from the outset means you can spend more time researching and vetting the ones provided. - **On the other side of the coin:** This type of internal oversight may mean that you have to choose from less-than-stellar options, especially if you’re not fully empowered to engage in your own search process. If you find yourself faced with a list of pre-approved vendors that don’t check all the boxes, it’s okay and sometimes encouraged to push back with the recommendation that outside options be considered as well. This may involve building a case for the options you’d like to vet then presenting it to internal decision makers.  Do this by creating a deliverable (a one-sheeter, presentation, etc.) that outlines at a high level the benefits of the providers you’re hoping to add to the pre-approved list, including things like standout features of their service, their reputation, or positive reviews. One key benefit of conducting your own search process is the likelihood that you’ll be able to rehire a given provider. Researching, vetting, and hiring an option of your choosing increases that likelihood and decreases the time and energy required (as well as any potential friction) for subsequent hiring processes. Making use of this finding for my business Determine how much leeway you’ll have in choosing a service provider by contacting internal stakeholders, whether they be team leads, department heads, or the small business owner. This will guide your process from the outset and prevent you from spending unnecessary effort. ## Question #3: What search methods are you using to make a hiring decision? Now that you know what type of contract you’re seeking and the options available to you, how _do_ you conduct a successful search? The answer for many boils down to Google and social media, but there are other more effective options available. According to our research, 52% of SMBs use either Google (33%) or social media (19%) to conduct research on potential service providers while only 16% use methods such as comparison sites, personalized shortlists, Top 10 lists, or peer reviews.[\*](#methodology) The question we have is: **Why do extra work searching manually when others have already done the work for you?** Cursory Google searches and social media can give you a good sense of a brand's values and how they interact with others, but neither of these methods will give you a clear picture of their reputation—the element that the vast majority of SMBs credit to their confident decision.[\*](#methodology) Making use of this finding for my business Leverage insights from advanced resources to fill in the gaps left by regular search engines and social media. Peer reviews in particular give you a realistic view into what it’s like to work with a provider, especially when they come from businesses that mirror your growth stage. In order to get a good sense of the kind of experience you can expect, peer reviews and insights are critical. Luckily for you, Capterra has a wealth of knowledge to help guide your decision in the form of hiring guides, shortlists, and peer reviews from small business owners just like you. ## Capterra tools and tips: Maximizing the effectiveness of your quest for a service provider ### Hiring Guides Whether you’re searching for help with basic tasks like advertising and SEO or more complex endeavors like cloud computing and AI implementation, Capterra offers a wealth of knowledge in the form of hiring guides to aid in your decision making. These guides offer key information such as: ### Peer reviews Just as useful but in a different way, peer reviews are an excellent resource to get real-world input on how a service provider performs, oftentimes from businesses just like you. Capterra peer reviews include an overall rating and likelihood to recommend scores as well as details like: ### I’m ready for my search. Now what? With all this in hand, you’re more than ready to get the most out of your next service provider relationship. Go forth confidently knowing that you have all the info you need to make a well-researched decision with the potential to yield a longstanding and fruitful relationship. For more resources to help run your small business effectively, visit the Capterra blog and start here: - [What Does a Digital Marketing Agency Do?](https://www.capterra.com/resources/what-does-a-digital-marketing-agency-do/) - [4 Key Considerations to Help You Choose a Digital Marketing Agency](https://www.capterra.com/resources/how-to-choose-a-digital-marketing-agency/) - [Here's What You Can Expect When Hiring A Service Provider](https://www.capterra.com/resources/service-onboarding-process/) ## Capterra's 2026 Software Buying Trends Report ### Download our 2026 Software Buying Trends Report to see how successful software adopters avoid disappointment and how your business can, too. * * * **Methodology** \*Capterra conducted the Services Users Survey between July 25 and August 23, 2022 among 1,078 Past Services purchasers (defined as those who have purchased or commissioned a qualifying service in the last 18 months) who work at an SMB (defined as a company with fewer than 1000 employees and between $5M and <$1B in revenue) in the U.S. Respondents must have spent at least $10,000 on their most recent service engagement to qualify. * * * ### Was this article helpful? * * * ## About the Author [### Gary Froniewski](https://www.capterra.com/resources/author/gfroniewski/) Gary Froniewski is a Content Writer at Capterra, covering all things digital marketing, with a focus on emerging trends in experiential marketing. A recipient of multiple AMD Spotlight Awards for flagship product launch campaigns, he has a wealth of experience creating compelling copy to support Fortune 500 companies and small businesses alike. In his spare time he loves to enjoy food experiences, play tennis and disc golf, and explore nature in his home base of Austin, TX. ### RELATED READING - [AI vs Automation in Project Management: Where Each Actually Delivers Value](https://www.capterra.com/resources/ai-and-automation-in-project-management/) - [What’s Behind the Pricing Jump in Project Management Software Plans](https://www.capterra.com/resources/project-management-software-pricing/) - [What is a Job Requisition? 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