Outsourcing-How to do it the Right Way Hello Jorge,
Outsourcing was once something only the big boys did. Corporations like Microsoft, Apple, and Bank of America have all outsourced some part of their business. In today's world through advances in technology and the globalization of our work force outsourcing is something even the little guys like you and me can take advantage of.
For a small business outsourcing allows us to handle bigger clients or projects, handle temporary work overloads, reduce fixed costs, speed products to market, provide more services to our customers and compete with our deeper-pocketed competitors. In short, outsourcing levels the playing field a bit. You can even use outsourcing to help your personal life as well.
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Outsourcing gets a bad rap. Mostly because it implies taking away jobs from unemployed Americans and sending the job overseas. No longer is that always true. Many times outsourcing involves working with other small and home based businesses within our own country. Often those freelancers are small business owners themselves we've met by chance or through our contacts.
The key to successfully outsourcing is less about where you get your freelancers from and more about the task or project you plan to contract out. I have outsourced multiple parts of my business for years now. It's not always gone smoothly but I've certainly learned the Do's and Don'ts from my experiences.
Timing is everything when it comes to outsourcing. When I first started League of Power I was very excited to get my marketing plans together, get my website up and running and to start creating helpful products and services for other small business owners like you to use. What I wasn't so excited about was doing the bookkeeping and accounting for my company. I don't have any idea how to do that stuff, and I didn't want to take precious time away from growing my business to learn how. For me it made sense to outsource that work to a professional accountant.
For every company, the right time to outsource is different. For some it may be right from the start, like I did. For others the right time to outsource work may come further down the line. I have found that generally there are four times in an entrepreneurs business that signals it's the right time to hire a freelancer.
1. When a task/project requires skills you don't have. I didn't know how to balance the books for a business so I had to hire someone to do it for me. And although I run an internet business I have no idea how to set up a website. I frequently outsource tasks that require knowledge I just don't have. It saves me time, so I can focus on other areas of my business that I DO know how to do.
2. When a task is cheaper outsourced, than done by in-house staff. Not all tasks require having a full time person on staff to do. It's much cheaper for me to outsource the writing of my sales letters for me instead of employing a writer on staff full time. I probably don't even have enough work to hire a writer part time, let alone full time. I only need help here and there. In this instance it's much cheaper to outsource the work only when I have the need. For a small business tasks that get outsourced are typically done by a secretary, graphic designer, accountant, writer, web master, human resources, payroll, and call center.
3. When outsourcing a project will speed up the time it takes to bring a product to the marketplace. When I'm working on new products I find that a lot of times the job gets done faster if I hire a freelancer for parts of it. Typically I outsource the writing of the manual or software application so I can work on creating the other parts of the project myself. This means I get the whole project done faster which means I can roll the new product out to customers quicker than if I did the whole thing on my own.
4. The last rule is also the most obvious one. Whenever you want to grow your business, but find that you don't have enough time in the day to do it. That is the point in time when you should look into outsourcing some of your work. If you find you are unable to manage the day-to-day business of your company and build it at the same time, it is time to start contracting out some of your tasks and work. Ship out tasks or projects that are not the main focus of your business and work on getting more clients/customers, expanding your reach, advertising your services…anything and everything involved in growing your business and fattening your wallet.
As soon as you've decided that you should begin to outsource some of your work you need to decide what are the right projects or tasks to contract out. Almost any task or project can be outsourced in this day and age. A great number of qualified professionals are leaving the corporate world to work as a freelancer or small business entrepreneur and they are ready and willing to work for you.
Before choosing which tasks and projects can be outsourced, take a hard look at what you and your staff brings to the table and what tasks are central to your mission. The smart strategy is to hold onto those tasks that you excel at and that are vital to your business' success and outsource the other operations that are not your strong suit.
For example, your company's mission may be to provide high quality products or services that customers can't necessarily find at other businesses. In this case it makes sense to keep product development and strategic market planning tasks in house. You can outsource all other tasks that cause you to take time away from performing those tasks well.
Over the years I have learned that selecting the right freelancer is a monumentally important task. The success of my contracted work partially depends on the quality of the person working on the project. Start off by identifying what skills and resources the freelancer must have to complete the work. Find someone that has experience with projects like yours and that possesses all the skills necessary to get the job done.
To find a good freelancer ask your business contacts for recommendations. Ask other business entrepreneurs or vendors that you use if they have had success with a freelancer in their business. Perhaps they know someone or have worked with someone in the past that they really liked. Online networks like LinkedIn and Twitter make it easy to reach a lot of people at once to ask for recommendations.
If you can't find someone that way, there are other options. A number of online services such oDesk, Guru, Freelancer and eLance serve as a virtual marketplace for contractors and business owners to connect. I have personally used eLance and Guru many times to find reliable contractors. You can post jobs and allow freelancers to bid on it. Then you can vet out the respondents until you find the right man for the job.
Once you've picked a contractor your job is not over. In fact this is where the hard part begins. At this point you need to communicate effectively what your expectations are for the project or task. Never assume the person you hire knows what you're thinking or wants.
Draw up a contract that outlines the steps that need to be taken and in what time frame. Always, always, always include a realistic timetable for completing the task/project. If you don't, the contractor can use this as a loophole if things go haywire for any reason.
Your final responsibility as a successful outsourcer is to step back, relinquish control and allow the person you hired to do what's asked of them. You want to maintain control of the project but not micro-manage them.
Your best bet is to start small. If you've never worked with a particular contractor before, then give them small projects to start. Increase the difficulty and scope as you see they can handle the work to your satisfaction. Once you get the ball rolling and find some success, you can agree to longer term deals and pass off larger projects/tasks.
Whatever project or task you start outsourcing first, know that it will take time to work out all the kinks in the relationship. This is something that happens to all companies, big and small.
Outsourcing tasks and projects helps level the playing field when it comes to competing against large corporations. You no longer have to employ a large staff to be able to offer a range of services to clients or customers. Your only hang up will be outsourcing to the best of your abilities. I hope I have given you some insight on how to make that happen for your business.
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Regards,
Mark Patricks
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