What is Outsourcing?
Outsourcing is the “idea” of having someone else complete your business processes for you. The actual “processes” can be a huge range of things, and the outsourcing can be at any location in the world. Many people confuse off-shoring with outsourcing.
You don’t have to outsource your email to another country. You can outsource your graphic design to Chicago, if you want. The idea is not to necessarily take work overseas, it is about getting work off your desk. Period. You do this for one of two reasons.
- You have too much going on and you need to focus your time on the most productive tasks in order to truly move your business forward.
- The person that you are outsourcing to is actually better at the desired task than yourself or your internal team.
In this section, you’re going to get my raw and uncut experiences of outsourcing (over $3MM spent) and how you can use these experiences to become more productive.
Outsourcing is, above all else, a mindset shift. It’s about not having to control everything anymore. It’s about learning to manage people and processes instead of doing all the work yourself. Scary thought, I know, but once you start you’ll never look back.
It’s actually a great thing for your career and your life in general. It’s a great personal skill to have. Outsourcing is really nothing more than becoming a great manager of people and personalities.
If done right, you end up with lower stress, more work done, and a better business. Done incorrectly, it can cost you tons of money in hard cost and more importantly, opportunity cost. It can also add a huge amount of stress to your work life. There’s nothing worse than working with a remote team that is not capable.
I’m going to teach you how to do it right. In this guide you’re going to learn what it takes to be a great outsourcer (and manager). You’ll learn both the tactical side and the strategic side. These are two drastically different things.
You’ll learn what you can outsource, where to outsource, tools for outsourcing and managing, and how to effectively conduct business online.
The Outsourcing Mindset
Let’s start with the most basic lesson, but the one you must understand before you can grow an online business. Here’s what you do: Calculate the amount of money that you want to make in a year, the amount that you DO make in a year, or the amount your business makes in profit. Let’s say that you’re at $150,000 a year just as an example.
Now divide $150,000 by the number of days that you work in a year… say 250. So, $150,000 divided by 250 = $600 a day. That’s what you are worth. That’s the exact dollar amount that you are trading your time for. Now divide that $600 by a typical 8-hour day. That equals $75 an hour.
If you are spending your time doing work that can be outsourced for $10, then there is a big problem. Whether this is occurring in your own business or your day job or wherever – it’s not right, and it’s not going to get you where you need to be.
No matter how you analyze it, doing work for $10 an hour when you are getting paid $75 an hour is not the right thing to do. You need to be doing work for $150 an hour in order to move along in your career.
What ends up happening, believe it or not, is that the $10 an hour assignment is almost always more demanding. Getting the accounting done, and answering your inbox are often more demanding than designing the sales strategy for the next calendar year or designing a split test.
No one is knocking down your door about becoming more profitable. The important task continually gets pushed back and soon your schedule is filled with these $10 an hour tasks.
The way to get away from this is to create a blueprint, then delegate. There are tons of tools that you can use to do this and I’ll show you all of them in the coming sections. But, starting now, you must start making a shift in the way that you think.
No longer will you perform tasks that are “below your pay grade.” We are going to teach you how to find people that are awesome at these tasks and ready to help get them off your to-do-list.
You outsource because it saves you time and as a result, makes you money. As they say, “time is money.” Let’s do an exercise. Think about this: What’s the top thing in your business or your job that if you could do this specific task all day long, every day, you’d be a superstar?
Doing this task would mean that you’re making a ton of money, and your business is flying. For me, that one thing (and I probably share this with many other businesses) is finding leads. For my company, I do this one task mostly through advertising, but it can also come from content generation, networking, tuning conversion processes, etc.
In general, the more eyeballs that I get on my ads, the more clicks I get, and the more leads I get into the top of my “marketing machine.” Now, ask yourself a few questions…
- What is that one activity for your business?
- Is that your core competency? Is that what you love doing? Is that what you are really great at?
I’m going to go out on a limb here and say that you probably aren’t doing this cash-grabbing activity all day long, every day. But just imagine if you could. Imagine if every day you were not only doing what you actually like doing, but also what you were good at.
If the “money-grabbing” activity is actually not your personal core competency and there’s no one else on your team performing that task, then that’s the absolute first task you need to bring a person on your team to do. In my case, I’d need a rock star advertising team member.
Just think about all the problems that we just solved. This is the number one thing in your business. You can’t afford not to give it attention! The cool thing is that there are TONS of advertising people out there. People who love “advertising” to their core. And now with a global marketplace, you can reach them.
You could get a part-time PPC master from an ad agency in Chicago or you can get a media buyer from London. This all depends on your business needs of course, but you get the point. These people are out there.
Why are you spending your time trying to do everything yourself when there is someone else that would be glad to work for you, and probably do a better job than you’d do yourself? You outsource in order to focus attention on your business where it needs to be focused. Outsourcing can help you find a superstar team that puts energy into the most important aspects of your business.
Getting Started with Outsourcing
One of the first things to think about before you find an outsourced worker is the actual work that needs to be done. Is it a software program that needs to be built? Do you need to improve your conversion rates? Do you need help with your bookkeeping?
These are all obviously very different skill sets. Chances are that the same person wouldn’t fit all of these tasks. So, step one is detailing the task and deciding on the skills your worker will need to have.
The other item that you’ll have to decide on is whether you need to have someone full time, part time, or just as needed. You need to decide whether it makes sense to get a full time person on board, part time worker, or if this is just a one-time project.
I personally prefer part time, project or task based work. I like this because I think it’s better to have specialists working on my projects. I would prefer to hire someone experienced, even if they have a higher hourly rate. Specialists are able to do the work in a shorter amount of time, and you usually end up with a better result.
It’s easier to have them focus on the task that you need done and adjust their schedule to your needs as necessary. The other benefit is that you don’t need to commit to a certain amount of overhead, and it’s easier to scale up and scale down. When I used to employ people on a full time basis, I would find that much of my time was actually trying to design work for the employee.
Under the contractor model, I just wouldn’t have had that work done and I wouldn’t have paid for it. So at this point, you would need to develop two very important things.
- a clear picture / blueprint of the project that needs to be done
- an idea of how you want to structure the relationship
Now that you have these items in mind, we can start finding some applicants for your business.
Where to Find a Team
There are several places to find people to add to your team. The most important thing to realize here is that a massive world exists past your office, your local community and even your country and it’s filled with skilled people.
You might find that the perfect worker is in New York even if your office is in California. Just a few years ago it would have been very hard to work with a person at that distance on a consistent basis. Now, thanks to software, email, and collaboration tools, it can feel like that person is right next to you instead of thousands of miles away.
Think about the opportunity that you have here… You can build an absolutely killer team on a contract basis with specialists for every item that your business needs. In general, I believe that the company with the best team wins. Okay, so back to where to find these workers. You have several options. I’m going to start with the best way to find rock stars for your company.
Online Communities – This could include forums, blogs, or social media sites. The reason why it’s the best is because these people are by nature accountable and helpful. The people that hang out on these sites are generally answering the questions of others simply because they are knowledgeable and they love what they do. They are contributing to a community at no cost because they have something to offer and in some cases, they like to create, etc…
So here’s what you do… enter a question in that you yourself are having problems with into Google. Example… “how to edit htaccess file stackoverflow”. By entering that term in I came to a question that was answered by this user.
Now, I don’t know this guy, but I can tell that he answers a lot of questions at absolutely no cost to others. He’s in Canada and he’s 22 years old. This could be a perfect candidate for a development job. A little research and you can probably send him a twitter message or a direct message on stack overflow. These are the cream of the crop type people. There are some examples of great online communities that you can start with.
- Stackoverflow.com – developers
- github.com – developers
- Warriorforum.com – marketers
- Copyblogger.com – writers / bloggers
- Webmasterworld.com – overall tech crowd
- Quora.com – social media site for Q&A
In general these sites are great because the employees are for the most part trained. The downside is that you’re not going to find a hard core developer on these sites. They are mostly for “light” work like tech support, some SEO, some writing, etc… These are utility type players, which are very important to your business. There are some good examples of staffing companies. Virtual Staffing Companies – Depending on the type of work that needs to be done, you can also go to a full staffing company. These are companies that have basically trained workers to do certain tasks, and you can hire a worker at certain package levels (20 hours a month, 80 hours a month, etc…).
- 123employee.com – pre-screened employees
- Virtualstafffinder.com – pre-screened employees
Freelance Sites – Freelance sites are the sites where you can list a specific project or job and potential candidates will bid on the job. There is no doubt some talent on these sites, but there is a very clear distinction from the freelancing sites vs. the online community sites.
The distinction is that the freelance sites simply provide access to people that are looking for a “job”, which is in once sense what you are giving them. But in another sense, they are not in most cases going to be “over-achievers”.
They are looking to be paid by the hour. That being said, the is a ton of talented people on these sites. The internet is a home to some of the biggest freelancing sites.
Classified sites / Job Boards – Classified sites are where you can place an ad or job description and reach potential candidates for your openings. You can also search resumes sections on the sites.
- Onlinejobs.ph – Philippines Job Board
- Bestjobs.ph – Philippines Job Board
What Tasks Can Be Outsourced?These are just a few resources. There are hundreds of companies around the world that are capable of helping you find contractors. It’s just a matter of finding the right source for you to continue to build your trusted team of people.
You can have an outsourced team do virtually anything that your business needs. The name of the game is to start small and scale up. Look at the very small list below and think about the time you would save if you could bring yourself to have someone else do these tasks for you.
- Writing Auto-responders / Emails / Communication
- Customer Service
- Bookkeeping and Payroll
- Coding / Programming / Development
- Web Design
- Print Design
- Link building
- Social media marketing
- Content Development
- Data entry
You’ll find yourself with extra time, lower stress and more productivity. You’ll start to see the whole picture instead of being involved with the micro-details of your business.The list goes on and on. There are specialists in each of these large categories. Maybe your business doesn’t need all of these tasks done immediately. Start small with one task that is really bringing you down and find someone else to work on it part time.
Less Expensive is Not Always Better
When you are starting a development project it’s tempting to hire the least expensive developer that you can find on a per hour basis. The theory is that you get more for your money. Let me be the first to tell you that it rarely turns out that way and here’s why.
Imagine building a house. You’ve got a few different contractors that have placed bids on your new home. You have high hopes, but the budget is an issue. You decide to go with the cheapest builder thinking that you can always go back and update the home later on.
What ends up happening is that you get a home without blueprints, faulty electrical, an uneven foundation and the contractor leaves without completely finishing the job. A complete nightmare.
In the world of software and website development the saying “you get what you pay for” rings very true. It’s not always the case, and you can find definitely find diamonds in the rough (amazing developers for amazing prices), but in general just be aware that this is not a place to mess around with poor developers.
There are tons of people that claim to be great and in the end it’s just a total waste of time, effort and money. This has happened to me on several projects and I now know better.
In fact, I would pose it the opposite way in development and design. Your goal is to find the most experienced, smartest, and most amazing developer possible. They will open up your project to amazing ideas. With the right developer, nothing is impossible; projects come in early, and things just work the first time.
You spend less time testing and you have a lot less stress. Your product ends up being something you can really be proud of, and they may even be able to get the project done in half the time. Consider these things the next time you are hiring a developer or designer.