This is the second part of Free Labor Ain't Free at All (Part One of Two)

So now you have a whole bunch of people willing to work for free, but how do you actually get some productivity out of them?  There are lots of misperceptions about what to expect of your free help once it's on board.

Common Misperceptions about Free Labor

1. They'll stick around.  If you expect free labor to work just as hard and effectively as paid labor, that's the first mistake.  They will work as hard as they believe they should to get whatever benefit they think they are getting (experience, stock options, etc.)  If at any point they think that alternative pay isn't worth it, they're gone.

2. They are self directed.  If  your free labor was so incredibly experienced and talented, chances are they wouldn't be working for free.  You may spend more time teaching them how to do their job than you will actually getting the benefit of their labor.

3.  They care.  You own the company and you're mortgaging your life to make it happen.  They are taking a chance on you and expending their free time on your behalf.  Don't assume that their level of commitment and interest in doing a great job is inherently the same as yours. 

So knowing that you may not have the most motivated or experienced employees, how do you make best use of them?

7 Ways to Make Good Use of Free Labor

1.  Assign Small Tasks.  Instead of telling a marketing intern to write an entire marketing plan, try asking them to perform small tasks that add up to a bigger picture, like researching Hoovers to identify the top 5 public companies that are in your market segment.  The smaller the task, the more likely a positive outcome.  Also, if they bail mid-way on a small task (and they will) it's not leaving you hanging quite as bad.

2.  Create Deadlines.  Within your small tasks, create tasks with very specific due dates.  The challenge in working for free is that you don't have a sense of urgency.  Instead of just saying "get me some Hoover's research" you want to focus on "I need the background info on the top 5 public companies in our segment by Friday."  For some reason when people are told to stick to a deadline, they create their own sense of urgency.  You can also use those deadlines to track the efficacy of your free labor, which is critical.

3.  Ask very Little.  Entrepreneurs have a tendency to ask a lot of new talent because they ask a lot of themselves.  Often they are disappointed.  If you've got new talent coming on board, try giving them really easy tasks to start with.  The point of this is to judge whether or not they can complete anything at all when asked.  Don't assume that because you always did what you were asked that someone else will.  Find out how capable they are and then pile on more assignments, but don't leave yourself hanging by relying to heavily on unproven talent.

4.  Give them a Few Quick Wins.  We all hate jobs that we can't be successful at, but we hate them even more when we're not getting paid and there's no reason to stay.  Giving new talent a few easy victories helps get them excited about what you're doing and their contribution.  Some simple projects that you know they can complete and you can praise them for will go a long way toward getting them motivated for future work.  There are many ways to pay people - praise is an important one.

5.  Anticipate Attrition.  Assume that every day someone shows up is a victory unto itself.  At any point they can fall off the schedule without warning.  In the past when I brought on interns and other labor, I hired twice the number of people that I needed because I knew attrition was inevitable.  The good people often find paying work and the bad people don't feel like showing up.  Attrition and free labor go hand in hand, so plan for it.

6.  Pay Something, Anything.  There is a world of difference between letting a Web designer work for free and paying them $500 for their efforts.  When people are paid real money they tend to feel more responsible for a positive outcome.  Even if you can only pay a paltry sum, it's worth it to ensure there is more responsibility on their behalf.

7.  Pick an "end date" for their Contract.  Instead of bringing people on for eternity, suggest that you will start them for 3 months and then review their term.  There are a few benefits to this approach.  One is that if they suck, you have a built in out to phase them out.  The second is that people tend to work harder when they know they have a limited window with which to work.  When they feel like they can get the work done at any point, it loses some urgency.  Some will even want to impress you in order to stay longer, which would be fantastic!

If you see a pattern forming here, it's that you can't expect too much from free labor, so it helps to protect yourself on this investment. 

In the event that you find someone that is hard-working, productive, self-directed and smart - do whatever you possibly can to keep them. 

What you'll likely find is that most people breeze through your doors, make a minor contribution, and move on.  That's fine, as long as you prepare for it. 

If in the end you've gotten some work done, provided some experience (and stock options!) for some talent, and moved the company ahead while conserving cash - mission accomplished!