The Entrepreneur’s Guide to Outsourcing Work

Once we get into the swing of it, the momentum we build up when growing our business can be easy to achieve. But, there can be moments when we hit the wall, either due to our lack of experience, or we don’t have the right resources. And when we find these sticking points, we can become incredibly frustrated, because it stops our business growing and blossoming the way we want it to.

If there is one thing that stubborn entrepreneurs have in common, it is the fact that the majority of them find it tough to ask for help. Many see asking for help as a weakness when in reality it is a realization that there are tasks to be done about which you have the limited knowledge yourself. You could learn, you could take time out, but at the end of the day is this sensible use of your time? It is important for the entrepreneur to know and plan which areas of their business are better suited to be outsourced to an agency or group of freelancers.

Perhaps, some entrepreneurs are aware of the benefits of outsourcing. Although, I can only wonder what is stopping them from adding it to their business. Outsourcing is when someone who is not a

part of your internal team but carries tremendous expertise in any specific domain and can deliver assignments effectively. Engage talents to complete the assignments keeping time, cost and quality as prime factors and you have the perfect recipe for successful outsourcing. I would presume that the culprit is ignorance. Most people know about outsourcing, but they do not know where to start.

Don’t Be a Jack-­‐of-­‐All-­‐Trades

This phrase refers to someone who tries to complete many different responsibilities. But, when the efforts are spread thin, it has a negative impact on the quality of the work that is completed. You should never underestimate what a little bit of help can do for you when you are feeling like you’ve got no one to turn to. At the end of the day, every entrepreneur relies on numerous resources to get them through. Don’t ever feel like you are in this all by yourself.

In the beginning, startup companies are always trying to fix everything by themselves. Their marketing strategies are usually made by self-­‐thought marketing experts, who also work in some other company sectors. Keeping your business processes internally is important to you because you want to keep control over activities, and you want to keep costs low.

When you juggle too many tasks as a startup, slowly you notice that not all areas work optimally; like internalizing all of your digital marketing activities might not be working out as well as you had planned. You were planning on launching a new email campaign this month, but you, or your team ran out of time, so you move it to next month. You’re rushing to get the offers, blog posts and social media posts out before a holiday. If you feel like you’re always in a panic mode, then it might mean you don’t have the necessary strategies and systems in place to run smoothly and efficiently.

Let me give you a simple example:

Suppose you are a law firm, and your bill rate is $400: It takes about 3.5 hours to write a blog. This means that as an attorney, a blog has an internal cost of $1,400. On the other hand, if you outsource the creation of the blog article, it will take about 4.0 hours of agency time and about 30 minutes of your time. So your cost of outsourcing that blog article is $700 (assuming an outsourced bill rate of

$125/hour x 4 hours + 30 minutes of your time).

Does this make it easy to understand the cost and benefit relationship?

Doing more with less is a way of life for many marketers today. With the continued growth of new ways to reach consumers, new marketing tactics and new technologies, the marketing workload can feel more unmanageable than ever.

Are you feeling the thrill of starting a business or a marketing agency? Whether you are working in the basement or setting up a local startup, there are a few things that you need to consider to reduce your stress during this experience. Putting the right systems in place will streamline your systems going forward, making it easy to grow the company when demand increases.

How To Decide What To Outsource?

When you’re running a small business, it’s always great news to discover that you’ve got more work than you can keep up with. And when an increasing workload doesn’t quite warrant taking on an additional full-­‐employee, outsourcing can be an effective and financially viable solution. Even though outsourcing can be a scary thought to some entrepreneurs and startups, in most cases, it just makes sense. Let the outsourcing company assume and manage the risk in their areas of expertise for you,

so you can return to your desk with a clear vision of where your business is and where it needs to go in the future.

If you’re doing everything, you probably aren’t doing them all well. By trying to keep your back end running with invoicing, or client management, plus serving your clients, and marketing yourself on social media, you may find that you just don’t feel like you have enough time in the day to get it all done, like you use to. Time is money. You probably didn’t go into business for yourself to spend all you time working on just keeping your business a float.

What to consider before outsourcing:

• Is there an advantage to taking care of this in-­‐house?
• Is it an important task for your business?
• Can someone else do it more efficiently?
• Are the costs of the service lower than what it would be to take care of it in-­‐house?

Plot each possibility on the diagram below, based on its strategic and operational importance:

Strategic importance

Strategically important areas are the ones that give your business its edge. Perhaps they help make your company unique or they provide a competitive advantage in your marketplace.

Contribution to operational performance

These are the tasks that help your business run smoothly. On the flip side, if they’re not done correctly, they can cause great disruption to the daily flow of operations.

I can recommend a simpler “everyday” practice to keep things under control:

Everyday for a week make a list of things you do in your business, but categorize each individual item into two categories – 1) I must do 2) Someone else could do. At the end of the week, take that list,

review it, and you should have a complete guide for things you now think you could hire someone else to complete on your behalf. It’s that simple! If you are still struggling to figure out ideas, think about things that could be done routinely, remotely, things that suck up your time and things that maybe you enjoy the least — so your focus stays on the things you truly love most in your business.

Before you go any further, you need to be very clear on what you want to achieve. Try to identify your goal using specific figures. For example, perhaps you want to:

• Reduce costs: If so, by how much?
• Scale or grow your business without adding unsustainable overheads: What are your projected growth numbers vs the costs you are willing to add to achieve this growth?
• Increase efficiency without increasing costs: What percentage increase are you looking for?
• Free up your time: How many more hours would you like to use elsewhere?

What Not To Outsource?

Outsourcing isn’t always the answer, but the myths surrounding it have tarnished its reputation. Successful companies regularly analyze all the factors to determine when third-­‐party manufacturing can help them build a more productive, cost-­‐efficient supply chain—and get a leg up on the competition.

Don’t Outsource Core Competencies

If you are a recruiting firm, don’t outsource your recruiters. If you are a chef, don’t hire somebody to design your menu. If you are a tech startup, don’t outsource your technology. Part of developing an effective outsourcing plan is determining what your company is really good at—what sets you apart from the competition and gives you an edge. Do you specialize in marketing automation? Maybe inbound marketing is your company’s passion? Figure out your company’s core competencies, whatever they are, and then keep them in-­‐house. Don’t farm out these services to third-­‐party talent; you want those talented individuals to work for you.

That’s not to say you can’t outsource certain support services directly related to these core competencies. For instance, hiring freelance writers and editors to write and edit the content involved in your inbound marketing efforts would be fine. Just be sure that the person or team making the business or editorial decisions—what topics to cover, what channels you use to disseminate content—stays in-­‐house.

Confidentiality

If your business depends on closely guarded trade secrets or client confidentiality, any outsourced work must meet the same standards.

For example, if you’re a psychologist and hire an outside firm to bill your clients and manage files, you must ensure that its employees will not release their names or personal information under any circumstances. While a non-­‐disclosure agreement can help give you more certainty that the information will be safe, you would need to understand how the other company’s employees are trained and monitored. There is also the potential for information stored electronically at an offsite location to be hacked, if the company does not have a solid IT security strategy. Some firms may not be used to meeting such a standard.

Never outsource tasks that you don’t even understand

There may be a lot of tasks you want to outsource at this very moment, such as getting an assistant to manage your Customer Relationship Management, developing a website and so much more. While these tasks can be outsourced, if you don’t really understand how they exactly work, then you could end up investing in something that you’ll end up replacing at your earliest opportunity.

Knowledge-­‐based functions dependent on proprietary company information

Transferring to a third party keys to the enterprise’s “crown jewels” (intellectual capital) is analogous to ripping the heart out of the enterprise.   In a knowledge-­‐based global economy, competitive advantage depends upon an enterprise’s control of its trade secrets and its ability to build upon skill and experience. The transfer of such control over intellectual capital may be more appropriate in transactions involving the transfer of the “line of business” (“LOB”) to a purchaser, merged company or a joint venture, and less appropriate in a transaction where the enterprise no longer is an equity owner in the intellectual capital upon which effective performance of a given LOB function depends.

Outsourcing…. Yes is it risky! But its benefits outweigh them

Outsourcing involves handing over direct control over a business function or process to a third party. As such, it comes with certain risks. For example, when outsourcing, you may experience problems with:

• service delivery -­‐ which may fall behind time or below expectation
• confidentiality and security -­‐ which may be at risk
• lack of flexibility -­‐ contract could prove too rigid to accommodate change
• management difficulties -­‐ changes at the outsourcing company could lead to friction
• instability -­‐ the outsourcing company could go out of business

My analysis… These top four reasons are the guiding factor for businesses to resort to outsourcing:

• Focus on core competencies
• To enhance service quality
• Cost cutting
• To solve capacity issues

Sounds too overwhelming?

Here are my quick questions to help decide whether to outsource a specific business function:

If the answer to the below are “Yes” then you probably need to outsource:

1. I don’t know what to do
2. I don’t know how to do it
3. I don’t have the time
4. I don’t have the budget for hiring in-­‐house

My Concluding points:

To have a base to propel the business to the next level, spending money on outsourced contracts can equally have its troubles from unreliable providers or that sinking feeling that you’ve just paid for a product or service that you could have done better yourself. As an entrepreneur, outsourcing is your most important form of leverage. If you want to grow your business fast or even put your business on autopilot, nothing will be more important than outsourcing.

Every entrepreneur worth their weight in gold will have a certain amount of knowledge of every aspect of their business until the realization hits they can’t do it all, but by the time that comes around it’s highly likely the business is ready to grow and ready for that leap of faith.