30 Apr Why and what you need to outsource
When you start off in business it’s perfectly natural to want to do it all yourself.
For a couple of reasons:
1. You want to learn how to do it all so you understand all areas of your business
2. You’re operating on a shoestring budget and don’t want to spend money on outsourcing yet
Plus, you have the time in the beginning to do it all, right?
When you get past this start up stage though and you find yourself still trying to do everything and complaining that you don’t have enough time to be working on your business, this should be setting off alarm bells that you need to be getting some help in your business.
Ideally you’d identify this stage beforehand so you have your support team all lined up and ready for when you need them.
Reality is often different as you’ve gotten into the habit of doing everything yourself. And habits can be tricky to break.
When I see clients in this stage in their business there is usually a little resistance to work through.
Firstly, they’ll cite money, or rather a lack of. When we explore further, it usually turns out there is enough money to outsource but it means that the business owner has to commit to bringing in the work to bring in the money.
How much extra money do you need to bring into your business to outsource the tasks you need to?
It can end up being a bit of a chicken and egg situation – outsourcing will free up your time to bring more money into your business but if you never do it, you’ll never have the money to pay for the outsourcing.
You need to detach from any view that it is your money in the business, and start to see it as money to run the business.
Of course you want to be able to take out your cut of the profits, but some if it will always need to be reinvested back into the business to enable it to continue and grow.
Once you get clear on how much money you need for the outsourcing, figure out what you need to do to bring in the money – how many extra clients do you need? How many services do you need to sell?
Once you commit to paying to outsource, this will definitely motivate you to go out and bring in the money!
The trick is to make the commitment to outsource first, and do it, rather than always waiting until there is some spare money.
Waiting for some spare money is like waiting for someday, it never happens.
If you’re ready to commit but aren’t sure what to outsource, here are some questions to help:
What do you hate doing?
This is the stuff that you know you can do but it drains your energy and you’re always putting it off. For me, this is the techy stuff around website updates and anything related to this.
I know that I can do it, but I also know I get really frustrated by it and will probably take 4 times longer than someone who is an expert in this.
The first time I outsourced this I felt a massive relief – the work was completed whilst I got on with bringing new clients to my business. It was worth every penny and I remind myself of this every time I get tempted to think ‘maybe I’ll just have a tinker around with it myself…’
What are the jobs in your business that you hate doing and would give you immense relief to outsource to someone else?
What are you rubbish at?
Be honest now, we all have areas we’re not very good at, so what’s yours?
What areas do you feel a bit embarrassed about, or think are unprofessional and amateur?
To give you another example from me, right at the beginning I realised that I’m pretty rubbish at design stuff so I outsourced this early on. I’ll still have a dabble in this occasionally but the results always leave me feeling embarrassed to associate it with my business.
Maybe for you it’s the book-keeping that you struggle to get to add up, or maybe it’s writing your marketing material.
Don’t be tempted to cut corners and come across as unprofessional – work to your strengths and get help with the rest.
What can you pay someone else to do at a lower cost than your time is worth?
As a business owner, a good chunk of your time should be spent on bringing money into your business. If you’re spending time on other stuff then chances are, you can find someone else to do it at a much lower rate.
Are you spending some of your time as a highly paid admin assistant for example?
Areas like admin and customer service can often be outsourced at a very reasonable cost.
What will free up time for you to work on your business?
This may be something outside of your business where you need to outsource some tasks in your personal life to give you extra time in your business.
Maybe getting a cleaner or gardener, if you don’t have one already.
There are also lots of concierge type services out there and virtual assistants who will sort out anything from collecting parcels to organising holidays and social events.
Business owners who know how to outsource produce significantly better results.
Knowing this, I want you to come up with 1 to 3 areas that you are going to commit to outsource and go do it!
Leave me a comment to let me know what you commit to.
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Pingback:How to outsource effectively (especially for control freaks)Posted at 06:46h, 07 May
[…] This follows on from the post on ‘Why and what to outsource’. […]
Carl CroftPosted at 08:22h, 01 May
Hi Alison. This is a really interesting article which got me thinking…
We often outsource aspects of our projects to other disciplines within a consultancy team, and then act for our client’s in project managing the team. Typically structural and cost consultancy. This enables us to bring together a complete service to deliver the project.
Business owners should give serious thought to outsourcing to specialists whether they suffer the problems that you mention or not. The focus should be: what are the problems faced by our clients, and how can we provide additional services to deliver more of what they want? This puts the business in a much stronger position with the client as the business becomes the ‘all-in-one’ solution.
I’m interested to read other peoples take on this…
Alison BradfordPosted at 08:22h, 02 May
Thanks for your comment – it’s great to hear another perspective on this. I agree with you that outsourcing can also be used as an opportunity to offer more services to your customers. As a business, becoming a ‘one stop shop’ is a great service to be able to offer and a way to differentiate your business. It’s especially important in this situation to make sure you have the tools and processes in place to do this effectively and I’d be interested to know if you have any tips to pass on re. this.
I appreciate your input to this article.
Carl CroftPosted at 12:52h, 02 May
Glad to be involved 🙂
From my experience you need to think carefully whether being a ‘one-stop shop’ is worthwhile for your company. Will this give you a competitive advantage or could the risk of undertaking be too great or problematic when assessed against the benefits?
For our clients, taking responsibility for their team and the delivery of that team (which is something we would naturally do) is a huge benefit to their ease of procurement.
However there are several things we need to consider before jumping in…
While it’s great to get a big contract, if yours or your supplier credit terms are not viable, or your client delays or queries payment (which could be due to one of the team members) then you could end up funding the project, at least in the short term. Make sure there is enough cash to cover this, or that your supplier’s terms allow for this situation.
Get a sub-consultancy agreement set up to define the payment terms, delivery dates, non-performance etc. These should mirror obligations to the ultimate employer.
If like in Architecture, you are required to carry professional indemnity insurance, make sure you have enough to cover the activities of the team, not just yourself.
Lines of communication
This varies greatly between different types of businesses. It is worth highlighting however to all concerned, what the parameters of for the service that they are to provide, and who they are to communicate directly to. An additional consultant project brief to the main brief could do this just fine.
Produce and communicate a programme for delivery to the team. If you can, allow some float time to allow for the unforeseen, and some time to review the output from a quality control perspective. If you don’t use that time, you deliver the project early and the client is happy.
There will no doubt be some things applicable to certain disciplines not covered above, and I’ve assumed that everyone has vetted the consultants ability to perform. This is a general starting point for people who are considering this type of approach.
Alison BradfordPosted at 13:05h, 02 May
I’ve written a 2nd part to this article on ‘how to outsource’ which is published next Tuesday – it covers some of these points you mention but watch out for it as I’m sure you’ll have some useful input to add which I (and others) will appreciate.
Carl CroftPosted at 08:01h, 05 May
Look forward to it 🙂