Outsourcing

How to Save Time & Money with Outsourcing

Outsourcing can be a precarious balancing act, but with enough thought and foresight, you can determine which elements of your business you can outsource and which should remain in-house.

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Entrepreneurs and small business owners often work more hours than they need to because they try to handle every aspect of their business themselves. However, this can quickly lead to burnout and failure. In business, results matter, and your goal is to produce the best results. The best way to do this is by assembling a team of experts that can help you achieve success.

Juanita started her business because she wanted to be a personal assistant to authors and help them grow their brands. She was a passionate reader and she loved getting to support authors. But as her client roster grew, she became overwhelmed. She struggled to find any sense of balance between her work and her personal life.

Desperate for help, she reached out to a business coach who suggested it was time to outsource. At first, Juanita was resistant to the idea of outsourcing until her coach pointed out that the pilot of an airplane doesn’t pause to pass out peanuts, repair the plane wheels, or check the boarding passes.

“He has one job, to steer the plane,” Juanita’s coach explained. “He has to trust the team around him to do their parts or he’ll end up too exhausted and overwhelmed to be an effective pilot.”

What is Outsourcing?

Outsourcing is the assigning of various business processes to expert individuals and companies. These professionals handle the business tasks that you’ve identified as needs. Outsourcing the non-strategic operations of your business allows you to focus on the parts of your business that are most important to you.

Virtual outsourcing is a fast-growing trend where organizations of all sizes outsource business processes to professionals around the world. This is referred to as hiring freelancers and is the preferred method for small and mid-sized businesses.

Outsourcing gained its popularity in the mid-80s and has been growing steadily ever since. It was first used by small and new businesses that were struggling to survive in a competitive market.

Today, companies of all sizes have embraced outsourcing to help them complete various business processes. The most common businesses to take advantage of outsourcing are based on the Internet, with many companies relying solely on freelancers to run their companies.

With the growing popularity and recognition that outsourcing is a viable business alternative for today’s companies, it is now possible for anyone to start and run a business without having to worry about finding cheap office space or the stringent government regulations and taxes.

Outsourcing is extremely beneficial for business owners because they are afforded the opportunity to focus on growing their business. Most outsourced tasks are handled by part-time freelance workers, allowing you to avoid having to employ full-time staff.

This will enable you to save on numerous benefits like health insurance and paid vacation, giving you the opportunity to reinvest the money saved into your business.

You can hire almost any kind of professional to work as a virtual employee. This includes designers, bookkeepers, writers, programmers, IT professionals, salespeople, and many more. All you need is a computer and the Internet to search, hire, communicate, and work with virtual professionals around the world.

Advantages of Outsourcing Business Processes

Outsourcing business processes is a familiar concept to many small business owners. However, many entrepreneurs don’t like the idea of outsourcing at first. But outsourcing can actually be a very smart business decision.

More and more, small companies are outsourcing their payroll processing, distribution, accounting, social media marketing, administrative support, and other critical non-strategic functions. Yet, many business owners don’t truly understand the benefits of outsourcing.

There are several advantages associated with outsourcing particular business processes, especially when it is a well-managed process. However, there are times when outsourcing can backfire and result in business losses. This is especially true when there are poor contracts and project management resources.

Here are twelve advantages you can enjoy when you start outsourcing your business processes.

Advantage #1: Get Your Focus Back

Chances are, you started your business because you like to do one or two things and you do them well. This might be designing beautiful graphics or writing high-converting copy. Whatever your gift is, it’s your “Zone of Genius” and you love it. Doing it lights you up like nothing else.

But when you’re running a business, you can begin wearing so many hats that you forget about your first love. The very reason you started your business in the first place gets pushed to the backburner as you put out a million other fires.

Once you outsource and train your team member, you have time to focus again. You can spend more of your energy doing the things you love in your business.

Advantage #2: Level Up Areas of Your Business

There are always areas of your business where you know you could be doing better. Maybe you struggle with setting up sales funnels so none of your products lead to each other. Perhaps you struggle with creating graphics to showcase your amazing courses.

When you outsource, you can level up these areas of your business. That’s why it’s important to look at where you need the most help before you choose to bring on a new team member. If you’re already strong with writing copy, then look for a virtual assistant or intern that’s strong in an area where you’re weak such as sales funnels or graphics.

Advantage #3: Create Margin in Your Calendar

Many entrepreneurs have too much on their plate. If you’ve noticed that your days are packed with back-to-back tasks, meetings, and appointments, then you could surely benefit from outsourcing.

While it’s understandable to have busy seasons in your business, it can become draining and overwhelming if these seasons last for years on end. Get the help you need by outsourcing.

Advantage #4: Increase Business Efficiency

Sometimes, the resistance to outsourcing is centered in a concern about costs. That’s how it was for Tiffany. She was worried that she couldn’t afford the experienced virtual assistant who would help her with her video marketing.

It was her husband who helped her to understand that her clients paid her $200 an hour to work on their copy. But she would often spend ten hours or more a week frustrated by video marketing.

So her husband concluded that she was spending roughly $2,000 a week in valuable time, frustrated when she could be making money from client work. Suddenly, paying the VA $500 per week didn’t seem so outrageous to Tiffany.

When companies try to do everything themselves, their research, marketing, development and distribution expenses tend to be higher than companies who outsource these tasks. The increase in business costs ends up being passed on to your customers. You can gain a substantial competitive advantage over your competition when you outsource.

Advantage #5: Focus On Your Core Business

Another advantage of outsourcing is that you can focus on growing your business in new and exciting ways. That’s because instead of passing out peanuts to your passengers, you’re free to focus on the flight plan. The result is a business that can expand in ways you’d only dreamed of before.

Every business, both small and large, have limited resources to tackle essential tasks, and every manager has limited time and attention to spend ensuring the success of each project. Outsourcing can help you shift your focus from peripheral activities to activities that serve the customer. Outsourcing is a way to help managers clearly set their priorities.

Therefore, rather than wearing every hat, every day, small business owners should consider which regular activities you can outsource.  Doing so, you can have more time to complete higher level activities like business development and project management. Great leaders understand that they are more productive when they outsource tasks that don’t generate any revenue but that are still essential for business operations.

Working with remote workers can help you eliminate the wasted effort of trying to be all things in your small business. By outsourcing some of your non-strategic business activities, you can gain greater peace of mind as you grow your small business.

Advantage #6: Get Early Feedback on Ideas

You can also use outsourcing to get early feedback on ideas. Maybe the first few products you launched flopped because you weren’t in touch with what the market wanted, or your presentation wasn’t what customers expected.

With outsourcing, you can have a virtual assistant or another team member do early research. This can allow you to shape your projects in such a way that they’re more likely to appeal to the market.

For example, you might have your VA compile a list of the top 5 products that will be similar to yours. Then you might ask her to compare them and point out what the product creators could have done better. You can use this information to make a more competitive product.

Advantage #7: Create a Better Customer Experience

Outsourcing your customer service ensures your customers receive the help they need when they need it. This will make them happier and will leave you less stressed.

If you’ve been running your business solo for a long time, you may have lost touch with what the customer experience is like for someone who makes a purchase from you. But you can have a new team member audit the system and go through making test purchases. Then they can give you feedback on what the experience was like and how it could have been smoother.

Advantage #8: Keep Up with Industry Trends

Gailene, the personal assistant to authors, felt like she was always falling behind on industry trends because she was so busy with work. In fact, she’d gotten so overwhelmed that she couldn’t even leave her desk to attend conferences and other offline events that would provide continuing education for her.

When you have a team around you, you’re free to explore new industry trends. You can look around at what others are doing and analyze how your brand could do it differently or do it better.

Advantage #9: Stay Compliant & Secure

You may also want to consider outsourcing if you struggle to stay compliant with new and expanding standards in your industry. That’s what happened to Irene who wasn’t good with technology. She struggled to keep her website compliant with the latest web standards. Because of this, her site was hacked twice in two months.

After the second hack, Irene took the time to hire a website security expert. Her expert keeps her website up to date and compliant. He also makes regular backups of her site and runs security scans. Now, Irene is free to focus on helping her customers and she can rest knowing that her website is secure for them.

Advantage #10: Begin Projects Quickly

High-quality freelancers and good business outsourcing firms have the resources needed to start a project quickly. When you try to handle the same project in-house, it might involve taking weeks or months to hire and train the right individuals. If the project requires significant capital investments, the process can be even more difficult.

Additionally, when you have to hire and train staff for short-term or peripheral projects, it can get costly. Plus, temporary employees won’t always live up to your expectations. You can focus more on your human resources when you start to outsource non-strategic tasks.

Sites such as  Odesk and Elance allow you to post your project description and you then need to go through all the applicants and select the one you think is best suited to your needs.

Virtual staffing expert Chris Ducker has a list of 101 Tasks to Outsource to Virtual Staff – take a look at this and highlight all the jobs you’d love to contract out.

Advantage # 11: Reduce Risk

Every investment that you make in your business carries a certain amount of risk. Competition, markets, government regulations, technologies, and financial conditions can all change very quickly. Companies and freelancers that provide outsourcing services assume and manage the risk for you. Their expertise in their field makes them much better at deciding how to avoid risks during the course of a project.

Advantage #12: Get Your Work-Life Balance Back

Perhaps the biggest benefit of outsourcing is that it can give you back your work-life balance. Instead of juggling customer service emails while you’re at your child’s soccer game or dealing with client deadlines while you’re sick, you have someone to help you.

Now you can focus on taking a step back when life or your health demands it. You can do this without guilt or hesitation, knowing you’ve left your tasks in the capable hands of a trusted team member.

Outsourcing can be a wonderful way to get relief from overwhelm and create more of what you want in your life. Don’t be afraid to consider the benefits of what it can do for you and your business.

Disadvantages of Outsourcing

Unfortunately, like with any business task, outsourcing can have its disadvantages. There will be instances when your favorite freelancer is unavailable to help you with an urgent task. Luckily, there are ways you can avoid this issue.

The best option is to have three or more freelancers that you can go to for each area of your business that you are looking to outsource. While finding enough talented freelancers to work with can be time-consuming and stressful, especially when you are working on tight deadlines, with the right planning and networking, you can limit this issue.

You may also have a language barrier to overcome, depending on where you’re looking to outsource. This can cause misunderstandings that could be detrimental to your business’s success. To avoid this, you need to make sure that you are providing the freelancers with detailed, written instructions along with screenshots or an instructional video to ensure that everything is 100 percent clear.

Remote workers have to be self-motivated and have a tremendous amount of self-discipline, as well as being extremely organized. Since you won’t be around to motivate them personally, you have to find freelancers that possess these skills. This can sometimes be difficult to find.

Outsourcing requires you to continually grow your skills as a supervisor so you can manage your freelancers. This doesn’t mean that you should be micromanaging them. There is a considerable difference between micromanaging and managing.

You should also expect to spend some time writing emails, making calls, and completing other tasks that are associated with outsourcing. The general rule is that you should spend 20 percent of your time to complete 100 percent of the functions that you are outsourcing.

How to Know When You Should Outsource

This will depend entirely on the task that you want to delegate and the stage of your business. If you are just starting a new business, then outsourcing is your best option about 99 percent of the time.

You will only need to hire an employee once you reach a particular stage in your business. Even then, you may still decide that outsourcing is best.

How to Identify Projects for Outsourcing

To identify the business processes best suited for outsourcing, you need to make a list of all the processes and tasks that you complete during the course of business. Next, create a two-column table and categorize each task based on its strategic importance.

One of the columns should be labeled as “strategically important,” and the other should be labeled “strategically unimportant.” The tasks that you want to place in the “strategically important” column are those tasks that are related to your business’s competitive advantage.

These are tasks that might require giving access to confidential information that is important in completing these tasks. If you decide to outsource any of these tasks you may want to have the freelancer sign a Non-Disclosure Agreement or NDA. Tasks that are placed in the “strategically unimportant” column are those that don’t impact your company’s competitive advantage and ones that don’t require an NDA to be signed.

Things to Consider Before Outsourcing Tasks

Before you begin your search for talented freelancers to outsource your business processes to, there are some things that you need to consider.

When you are looking at freelancers, you want to pay close attention to their native land. While this won’t matter for some tasks like data entry and bookkeeping, it could pose a potential problem when outsourcing writing tasks.

Be cautious of new contractors. While there is nothing wrong with occasionally hiring someone that is looking to establish feedback, you will want to speak to them directly before you do. If they aren’t willing to talk with you, don’t hire them.

Pay attention to a freelancer’s job history when you are making your decision. Some of the factors that you will want to consider include customer feedback, reviews, and their most recent jobs.

Consider interviewing potential candidates before you offer them the job. You can hold an oral interview or use emails or Skype to message prospective candidates. Ask them the tough questions and pay careful attention to how they respond.

Start off with a test job. Give the selected candidates a small task to perform before you hire them. This will allow you to check their skill level. Keep in mind that you will have to pay them for the work they complete, but starting off with a small task is better for decreasing your risk.

The Best Places to Find Outsourcers

Now that you’ve determined what business processes you want to outsource, it’s time to begin the process of finding qualified outsourcers. This can be a cumbersome task in and of itself if you don’t know where to start.

Finding Qualified Customers

There are hundreds of sites on the Internet where you can begin your search for freelance workers. However, it’s important to understand that not all outsourcing organizations are created equal.

To help you find the best freelance workers on the most straightforward platforms to use, I’ve compiled the following list of online companies that are designed to help individuals and businesses find talented professionals to help them with their business processes.

Popular Freelancing Sites

Upwork (http://upwork.com)
This is one of the most popular freelancing sites on the Internet and is a great place to find talented freelancers. Getting started on the site is simple.

The easiest way to get the job done is by breaking up the process into three phases:

1) before you hire
2) hiring
3) doing the work.

Before you hire, you want to be sure to fill out your company name, tagline, description, and website address, and upload your company logo. Next, add and verify your payment method. This is important because you can’t hire freelancers without it. Next, post the job and choose between hourly or fixed-price.

Fiverr (http://fiverr.com)

You can hire practically any freelancer for any work imaginable on Fiverr. Gigs start at $5, making it a great place to learn the basics of outsourcing. The site allows you to gain experience in choosing a freelancer, hiring them, and leaving feedback.

Fiverr works through what they call gigs. A gig usually costs just $5. However, you can rarely get quality work for that small dollar amount. There are gig extras that are offered by the more experienced sellers, giving you higher quality work for a fairly reasonable price.

Freelancer.com (http://freelancer.com)

Freelancer.com has over one million freelancers to choose from and is a great place to find affordable rates. However, it isn’t quite as powerful as Upwork, so you need to screen your candidates carefully.

Freelancer gives you easy access to graphic designers, writers, programmers, and video editors. It serves as a great place to establish a great list of freelancers for all categories.

Guru (http://guru.com)

Guru isn’t as large as Upwork, but it is growing at an astounding rate. You can find freelancers from all categories on the site. One of the unique features of Guru is the way you list your project.

Based on the description you provide, Guru will send you a list of the top candidates for your listing. This gives you the power to choose which candidates you want to invite to apply for your job.

Guru is a great place for you to build your list of freelancers and is one of the most efficient outsourcing sites on the Internet.

99 Designs (http://99designs.com)

99 Designs is a different type of outsourcing site than the sites listed previously. It is what’s known as a design contest marketplace. To find freelancers, you need to post a description of your project; then freelancers will submit entries based on your description.

Then you get to choose your favorite. Because you are choosing from multiple designs, there is no risk to you.

PeoplePerHour (http://peopleperhour.com)

The primary advantage of PeoplePerHour is the site’s simple layout. It works like Fiverr, in that freelancers can post their projects for set fees, and Upwork, where clients can post jobs that freelancers can go through on their own. Another strength of the site is that it supports a large variety of categories.

PeoplePerHour provides the perfect balance of Fiverr and Upwork styles, making it an excellent choice for your outsourcing needs.

How to Avoid an Outsourcing Catastrophe

Outsourcing your business tasks isn’t always an easy process. Often it can turn into a stressful nightmare where you’re dealing with a person who isn’t the right fit for the job.

That’s why it’s crucial to follow these simple rules to avoid an outsourcing catastrophe.

Rule #1: Hire Slow

When you take the time to follow a lengthy vetting process, you avoid many of the problems that arise from hiring low-quality freelancers. You can’t simply hire an individual based on their bid price and feedback. You have to take the time to challenge the candidates from the beginning to make sure they are right for the job.

Don’t be in a rush to pick the first qualified person that bids on your project. Instead, go through the five steps outlined previously and take the time to find the perfect candidate.

Rule #2: Fire Fast

On occasion, no matter how much you vet the candidates, you will still end up hiring someone that isn’t fit for the job. The first thing to do in this instance is to try and work with the freelancer. However, if they are continually making excuses or ignoring your corrections, then you need to get rid of them.

The best way to deal with poor freelancers is to get them out of your life quickly. You can use a “three-strike rule” when firing a freelancer. When you get a third excuse or delay, immediately stop the project and try to recoup your investment.

The process of letting a freelancer go can get tricky when money is involved. It is crucial that you understand how disputes work on the different outsourcing websites.

Rule #3: Avoid Threatening Them

The quickest way to make a tense situation worse is to threaten a freelancer with negative feedback. Negative feedback can destroy a freelancer’s business, and you should never use it to get what you want. In reality, you should only use it when a freelancer possesses a poor character trait, like lying or stealing.

Rule #4: Protect Your Ideas

There may be times that you’ll want to protect an idea, this is especially true when outsourcing a programmer for a mobile app or piece of software. If you’re worried about having people spy on your business, then you should have the freelancer sign a Confidentiality Agreement.

Rule #5: Protect Your Sensitive Information

When outsourcing to freelance workers, you also want to take the proper precautions to protect your businesses sensitive information. You want to be careful not to divulge any information that can cripple your personal or professional life. While most freelancers are honest, revealing the wrong information can have a disastrous consequence.

You want to make sure you are only providing information to the freelancer that is directly related to the task at hand. When the task is completed, be sure to change the password to those accounts. You also need to be careful about giving away usernames and passwords that are similar to your PayPal account, banking, and finances.

Most of the outsourcing projects that you complete will be done so without a hitch. Use these rules as a guideline to protect yourself from the rare scenarios when something goes wrong.

Be sure to take your time with every new freelancer that you hire and use the tools that are provided by the various freelance sites, and you’ll be able to overcome any problem that may arise if you hire the occasional lousy freelancer.

Final Thoughts

Controlling capital costs is yet another advantage of outsourcing. While not the only reason to outsource, cutting costs is a significant factor in making the decision. Outsourcing allows you to convert fixed costs into variable ones, releases capital for you to invest elsewhere in your company and will enable you to avoid significant expenditures when you are first starting out.

Outsourcing is a great way to build a thriving business. It allows you to free up your time so you can focus on the crucial aspects of running your business.

Outsourcing will enable you to hire talented professionals who can complete projects that surpass the results you could achieve on your own. When you surround yourself with talented professionals, you can delegate the non-essential tasks and focus on the critical functions that will help you make your business successful.

Smart Outsourcing

Smart outsourcing isn’t about saving your company money or finding the least expensive freelancer to complete the job. Instead, it’s about being able to locate great talent, making them a virtual part of your daily business operations, and bringing your business opportunities for growth and long-term profitability.

Once you’ve accomplished this, you can begin to focus on making your company stronger and more profitable. Just remember to protect yourself and your business.

Soon you’ll start to realize that investing a small fraction of your money in hiring talented freelancers will pay off, giving your company higher profits and an outstanding reputation

Mastering the Art of Outsourcing

Hiring other people to handle essential tasks can free up your time, allowing you to focus on the critical business activities that generate the bulk of your profits.

Outsourcing can be one of the best moves you will make for your business. All you have to do is analyze what you need and take the time to find the right candidate for the job and establish a strong working relationship with them.

As a small business owner, your time is precious. Trying to take on all the responsibilities of running and operating an online business will quickly lead to failure. If you want to make the most out of your time, you need to outsource the non-strategic, or supporting process of your business.

In this article, I shared 12 advantages why outsourcing is a smart business idea. Keeping these twelve tips in mind when outsourcing your business tasks will ensure the process runs smoothly. Mastering the art of outsourcing will allow you to focus on the important tasks that will help you grow your business.


Now, are you ready to discover how to find others to outsource to, train them effectively, grow an active, happy team, and more? If so, then grab our FREE workbook below to dive deeper.

 

Have you ever outsourced a job?  What was your experience?  We’d love to hear from you in the comments section below.

 

About The Author

About The Author

Ricardo is a successful Real Estate Investor, Entrepreneur and Blogger, with over 25 years of customer service experience. The bold & visionary founder of Funntripps and RicardoNewbold.com, he teaches busy entrepreneurs and bloggers how to successfully build and grow their business whilst having fun and living the maximized life. He enjoys spending time with his family, multi-family real estate investing and surprise get-a-way trips with his wife.

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