Don’t Make These Mistakes In Outsourcing. Part 1 of 5

Outsourcing Mistake #1

This Job Cannot Be Outsourced

 

So you’ve ventured out on your own and built your internet business from the ground up and every detail is currently stored inside your head. On any given day you deal with 100 different tasks and jobs, from responding to email, managing projects and making plans for future growth. Initially it can seem impossible or complicated to imagine taking all the information inside your head and communicating it to someone else.

 

Because of this, most entrepreneurs never move past just thinking about outsourcing. But the truth is, if you can outline the process and if similar skill sets exist in someone else, anything can be outsourced.  Therefore it’s important to identify the skills being employed for any project you want to delegate.

 

Sometimes what holds us back from passing on certain sets of tasks is that we enjoy doing the work. It will take some getting used to, but the sooner you can detach yourself from the day to day running of your business, the sooner you’ll enjoy the freedom to focus on what you enjoy most in business, pursue personal interests or spend more time with your family.

 

Outsourcing Mistake # 2

Relying On Availability of Knowledge

 

If you tie up all your knowledge in a person, or if you’re doing all the work yourself you won’t be able to have your freedom. Similarly if the work is being done by only one other person and they decide to quit, you can quickly end up back at square one.

 

Here is an example: Say you’re an internet marketer with a busy web based business and on top of the everyday tasks required to keep the business running smoothly there is a large amount of customer service involved.

 

As the business grows you realize you need additional help, you decide to employ a virtual assistant possessing the required skill sets, and spend the next month teaching them everything they need to know to take over customer service and manage some ongoing projects.

 

Everything is going great and you are able to turn your attention to the good ideas you are normally too busy to pursue. And so as your business grows your income grows with it.

 

Then one morning you receive an email from your virtual assistant giving two weeks notice, only half as long as it had taken you to train them and now that your business is much bigger you know you are in big trouble.

 

So this time you decide to break the work down into two different positions and train each assistant to be able to do the others work. By taking the time to cross-train your team, you ensure that no one area of your business is vulnerable to staff availability and will feel more secure about the future.

 

When expanding your business, decide how to break work down within your team, to build robustness into your system so that in the long run your business will be safer.

Outsourcing for Entrepreneurs

Outsourcing is a big deal in the global economy. Articles, books and blogs are written about it all the time, you can also attend countless seminars on the subject. In Google alone there are over 58 million links so there is no end to the amount of information and opinions on how to do it right or avoid making major blunders.

By far the most advocated approach is to focus on your company’s core competency and then outsource everything else. This approach is sensible in theory, and to a certain degree in practice, but like everything else you can blow it out of proportion and take it too far. The key here is to fully understand your business needs and its goals and then decide how you can integrate outsourcing to help you achieve them.

When deciding what to tasks and processes to outsource, there are some things like printing, legal services and health insurance that are rather obvious, and a good number of businesses outsource them. However; some functions are less obvious and are either outsourced or not depending on a person’s expertise. For example, if you have an accounting background, you would most likely maintain your own accounts and file your own taxes. There are also tasks that many people could do themselves but probably shouldn’t. For example, most people could create a basic Web page or company logo, but the end result would differ significantly between doing it yourself and hiring a professional. Then there are those vital business functions that need your close attention and should not be outsourced like cash flow management and in many cases customer interactions.

There is also the situation where it makes sense to initially outsource some tasks and then bring back in-house later. For example, if you aren’t experienced at hiring an administrative assistant, you can use a temp agency. Temp agencies charge a premium, but you get significant value for money, they will make sure they understand your requirements, advertise for people, sift through them and send the best candidate to you. If for whatever reason they don’t work out, you call the temp agency and tell them to send someone else. When you find the right person and decide you want and have the need to hire them long term, you can pay the temp agency a fee and employee them as part of your team.

One of the big advantages to outsourcing is flexibility and therefore does not have to be something you do until you have enough work for a full-time employee. You can reduce the hours of an outsourcing supplier but it is much harder to tell an employee that you have to reduce their hours. Another advantage is that it’s not necessary to become an expert in a particular area, the outsourcing supplier is your expertise partner and works with you to satisfy this gap just like designing a Web site or logo.

Of course the most positive benefit of outsourcing is the ability to save money. The amount will depend on the size of your company, the specific tasks you outsource and how long you outsource. For example, companies that outsource their IT services like the help desk, computer support and maintenance and pay significantly less compared to what you would pay for a full-time IT person to give the same level of support. Also outsourcing bookkeeping and office administration will attain similar savings. As any company continue to grow it will be necessary to re-evaluate these decisions and adapt to the changing business requirements.

A disadvantage to outsourcing is that you are placing a piece of your company in the control of another company. So it is necessary to build a trusting partnership and negotiate the particulars of your business relationship from the start. Also you will need to evaluate their ability to remain in business and if they will be able to adapt to your growing and changing needs.

The best policy is to plan carefully and think about each function and process within your business and decides which tasks make sense to outsource and then give it a go, starting with the smallest task first and then build upon each experience.

Top 8 Reasons Why Entrepreneurs Outsource

Many entrepreneurs start out in the business world to map out a plan and go for it. They have an intense enthusiasm for success and a longing to shape their own future with the freedom and creativity not available in the average 9-5 working world.

Yet the reality is that a little fewer than 60 percent of new businesses may not survive up to or more than four years and the entrepreneurs that do survive end up working 60+ hours and are unable to take much time off.

Successful entrepreneurs use outsourcing to grow their business and thrive. Here are 8 top reasons to outsource:

1. Perform ONLY those tasks you are experienced and proficient at and like doing.

2. Focus on making money. Don’t waste your valuable time and energy on tasks that you’d prefer not doing or that you’re not able to do. Instead employ the services of a virtual support team to give you the freedom to focus on income generating activities.

3. Save time and money. Instead of thinking of contractors as an expense, leverage them as a profit center. Firstly, you lose money when you do tasks you are inexperienced at, where as a skilled person will cost comparatively less. Secondly you gain back that time and can invest it in activities that bring in more income.

4. Reduce expenses and increase profits. Why tie up funds in payroll, benefits, recruiting and training costs, equipment and office space when you could be using that money to grow your business? Outsourced virtual professionals, work from their own home offices and charge you only for active productive time (i.e. Virtual Personal Assistants).

5. Freedom to generate and seek opportunities. When you are caught up in the particulars of running your business, your creativity gets suffocated and does not flow as easily. Outsourcing gives you the freedom and time to be innovative and work on growing your business.

6. Achieve a superior balance between work and personal life. With proper planning you will finally have the time to spend with your family or to pursue personal interests.

7. Access to new skills and trained professionals. A virtual support team will give you access to a wide variety of skills and many virtual professionals can also provide you with referrals to other service providers.

8. Peace of mind. With regular communication and feedback, you will gain priceless peace of mind knowing that the day-to-day details, customer and business lead follow-up, maintenance and marketing of your business are skillfully handled by your virtual support team.

Outsourcing will help remind you why you created your own business it in the first place. Your success and freedom as an entrepreneur may depend upon your ability to focus on what you love and do best and eliminate or outsource everything else.