Outsourcing has become the entrepreneur’s key to earning more revenue while working less. It’s the answer to making business dreams come true. Or so it seems.
But here’s the thing. Outsourcing could lead to several mistakes that will cost you MORE time, MORE money, and LOTS of headache and frustration. Outsourcing can be a smart way to go … and there’s a smart way to do it. Let’s start by taking a look at the common mistakes – the lies you might have heard – that could lead you down the wrong path.
In January of 2006 I first heard about the concept of outsourcing. Basically, a business owner pays someone else to do tasks that need to get done for the success of the business. These are tasks that many times business owners either don’t want to do, or someone else could do less expensively … some tasks, for instance, could be outsourced for as little as $10/hour.
And so, let’s say you chose to do that task yourself, you’d essentially earn only $10/hour. Since you most likely charge your clients more than that, it makes sense to outsource that work.
Sounds pretty nice! Decide which tasks to outsource, hire someone, and then tell that person what to do!
And that’s where it get’s tricky …
Communicating what you need and how it needs to be done to satisfy you and your clients takes TIME. And suddenly you’re spending a great deal of time explaining and communicating to get the task done to your satisfaction … and suddenly you wonder, “Am I really saving any money here?”
Many business owners have a hard time communicating what they want someone else to do.
You know what you want, you can visualize it. But you and the person you hired have different backgrounds, experiences, and knowledge bases. Misinterpretation results and you don’t get the product or service you expected.
It takes time to learn how to convey your ideas to get the result you want! And that means money, too.
In April 2007, Tim Ferriss presented an intriguing concept in a book he authored. Have you heard of The 4-Hour Workweek? Sounds good, right? But here’s the thing. Tim himself does not work just 4 hours per week. He doesn’t clock in for half a day per week and then hit the golf course. If you know Tim, you know he works just as hard as the next entrepreneur.
Tim is using semantics. His definition of “work” means something that you do not want to do yourself. You still need to do all the other parts of the business that you enjoy. If there are tasks you don’t like to do, then that qualifies as work. He’s telling you how to only do four hours a week of THAT work. And to get down to four, he’s telling you to do what I call delegation. Delegate the tasks you don’t like doing!
For example, a social media presence is probably an important marketing tool for your business. But do you love scheduling your posts across all your social media accounts? If you don’t, that’s something you might outsource. But coaching your clients or designing websites for your customers … the part you like doing… that’s not work.
Outsourcing seems like easy money. It’s not. Not usually. Sometimes we get a new lead, a new prospect, but we don’t have time to do the project or task. So we think, “I’ll hire someone to do this for me! I’ll charge the client more than what I pay to outsource the project! I’ll make some money and not do any work … how great is that?!”
Yes, this sounds like a no-brainer.
But consider this:
- It takes time, money, and resources to attract the client and manage the project.
- You become the liaison, the go-between, the back-and-forth communicator between the client and the person to whom you outsourced the task to.
- When clients are not happy with the results or request a change to the service, this must also be managed and communicated. That takes time and energy and suddenly your profits become less and less, perhaps even a loss!
- Small or growing businesses demand a prioritization of resources. Essentially, you need to be ready and able to accept more profitable opportunities. In other words, don’t grab at every little chance to outsource – that will ultimately make you less available for better and bigger projects to build your business. It’s okay to say no to projects. And as a leader of your business, you need to figure out what is worth a “yes” and what demands a “no”.
Now let’s explore the outsourcing mistakes that will cost you money and time
Outsourcing your business processes will work for a while and you’ll probably get the results you wanted. For awhile, right up until the point where you need to switch from one virtual assistant to another, or move to a different marketing company.
When you don’t have your own business processes established and instead let the assistant or team you hire to create them for you, you are setting yourself up for a disaster. Big mistake.
Let me share the results you’ll get, but don’t want, when you jump into outsourcing without a plan. Each result here will end up costing you money and time to overcome.
Outcome #1 – The One-Timer
The person you hire, especially at $10/hour, isn’t a business systems thinker. They won’t be thinking in terms of your future projects. They don’t think in terms of business systems that work for you overall. You’ll have that one project in okay shape, but it won’t work for future projects and things get complicated.
Outcome #2 – The Past-Present-Future Challenge
The person or team you hire in this outcome is a business systems thinker. But – and it’s a costly one – they won’t know about your pre-existing systems in order to make your operations seamless. The system this person sets up for you will work about half the time. Not the odds you want. They either ignore the past or don’t know enough about it, and, when they leave, they’ve left you nothing to help your future teams. No documentation available, so your business systems are, once again, starting over from scratch. Tick-tock, Ca-ching.
Outcome #3 – The Hodgepodge
After hiring multiple people or teams, you have a hodgepodge of business processes that do not communicate together. This results in broken systems and a lot of extra manual work for things that could’ve been automated by now.
I know this one well as an Infusionsoft Consultant. When my Infusionsoft Concierge clients hire me to fix their business systems, I sometimes go into an app that’s been there for awhile.
When I go inside the product, I can tell when a lot of admins have been in there working. I can predict what I’ll find when I see names I recognize. Admins have their own styles with different naming conventions, different standards, and different ways of doing their work inside the app.
You can imagine what happens over time when many hands are in the pot, so to speak. Different admins means different schools of thoughts, different training experiences, and different business strategies.
Sometimes it takes dozens or hundreds of hours to research all the different pieces left behind by different admin users.
Another mistake – please don’t expect your $10/hour assistant to be your business thinking partner or strategist. At that price point the person is rarely qualified to be that person. You may find a diamond in the rough who can become that person with mentoring and training over a long period of time.
Our best tips to successful outsourcing
Should I outsource, then?
Outsourcing is a fine option if:
- You can communicate your vision to a team and provide a detailed plan of action.
- You have tasks that are skill-oriented, like transcribing or scheduling your social media posts.
Outsourcing is not a great option for you if:
- You aren’t clear on exactly what you want or how to get what you want.
- You need a strategic plan.
Some tasks lend themselves better to outsourcing. These include:
- Lead Magnet Design
- Landing Page Design
- Social media graphics and scheduling posts
- Data entry
On the other hand, the following are not tasks that should be outsourced:
- Developing a strategic marketing plan
- Direct communications with your clients and customers
- Any tasks that require core business competencies
- Project management
Prioritizing from you needs to happen. One of my clients once told me, “If you give a problem to a smart person – they will immediately sit down and try to figure out that problem – never stopping to think if that problem should even be solved in the first place.”
You might see this a lot with developers and programmers. Web development projects can quickly get out of control. Many web developers will find problems in the code and work to fix them without stopping to think if the problem really needs to be solved!
Let’s say the impact of the “problem” is minimal and only affects one or two contacts per day. If it takes the developer twenty or more hours to resolve, at a rate of $100+/hour, is it really worth paying over $2,000 to fix such a small issue? Sometimes it’s not a good investment to fix something that will only impact a few hundred people per year.
If you decide to give your team members free reign or limited direction, you’ll likely have well-meaning people headed down a rabbit trail, creating complicated systems to problems that aren’t problems to you, or aren’t the problems you wanted help with!
You must have a system. Not everyone thinks in terms of systems and efficiency. Every time you solve a problem in your business, think beyond that one instance. Think more systemically about your business and other problems that could and will arise.
Sure, you can slap a Band-Aid on quickly, but what if you really need surgery? Do you want to keep fixing over and over and over again? Take some time and do it right for long-term benefits.
You can read more about how to systemize your business in this blog post I wrote here.
Think of it as trying to stop flooding waters with sacks of sand … every time it rains. Wouldn’t it be smarter and more effective in the long run to build a dam and solve the problem once and for all?
You can spend a lot of your resources – time and money – if you choose the Band-Aid route, or you can fix it right the first time and avoid a lot of headaches, hassles, and money-draining fixes… which makes more sense to you? An ounce of prevention or a pound of cure?
When you fight your business battles – set yourself up for success. Fight not only the one battle – but all future ones by creating systems. Get an efficient system now. Piece-sealing and bandaging as you go, only cuts back on your profits, your energy and your time.
Document your processes. The difference between a small business and a big business is documentation. Before outsourcing, spend time documenting your processes. Again, it’s the smart thing to do to avoid wasting time and losing revenue.
You can read more about how to document your processes in this blog post I wrote here.
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