Seven Questions to Ask Yourself Before You Outsource
Posted December 15, 2009 in Business, Productivity 32 Comments »
Do you outsource?
Outsourcing is a business strategy that has been drummed into my brain by my mompreneur mastermind group, freelancing books like The Unlimited Freelancer, and various other posts on FreelanceFolder (such as this one). “You need to outsource if you want to become more profitable,” everybody says.
After months of hearing this — and after a catastrophic episode that involved accidentally making a blog explode into virtual smithereens — I finally decided to grow my team.
In this post, we’ll examine outsourcing. We’ll discuss what I’ve tried and we’ll look at seven critical questions that you should ask before you outsource.
What I’ve Tried
I’ve tried it several ways. I’ve hired virtual assistants to do administrative tasks, such as submitting press releases online and updating my Wordpress blogs. I’ve also cross-sourced by getting a copywriting intern and even an occasional assistant writer.
I’ve been working with my expanded team for nearly a year now, and I’ve learned that outsourcing isn’t always good, nor easy. It’s definitely not for every freelancer. It’s no magic pill and unless you know what you’re doing, you won’t reap the benefits.
If you’ve been thinking about outsourcing, here are seven questions you should ask yourself before diving in.
1. Can I Afford It?
If you’re just starting out and you have more time than money to spare, then you probably can’t afford to outsource. You could look for cheap service providers, but keep in mind; you often get what you pay for.
However, sometimes you can’t afford NOT to outsource. For example, if you’re into freelancing for the long haul and are willing to invest in it, then you probably should outsource. You should definitely hire somebody to design your professional website if you really suck at it. Barter for services, if you have to.
Otherwise, you’ll do a shameful job and end up turning off prospective clients instead of enticing them to hire you. Definitely find, steal, or borrow a service provider if you’re like me and are capable of accidentally making a page-one-Google-ranking blog disappear…
2. Do I Know What I Should Outsource?
In general, you’ll want to begin by outsourcing tasks you’re not good at, as well as tasks you absolutely hate doing. Ask yourself, “What can somebody else do in my business that they can do better, faster and for less money?”
Let’s say you charge clients $50 per hour of your time, then you’re better off paying a virtual assistant $20 per hour to update your client database than to do it yourself. The VA can probably do it much faster than you too.
3. Am I Willing to Manage Another Person?
When you outsource, you may no longer be doing the task yourself, but you’re still responsible for getting it done and at the quality level you desire. This means you can’t leave the service provider completely alone to complete the task.
Here’s what working with a service provider involves:
- Select the right person for the job
- Train the person as needed
- Choose and schedule the service provider’s assignments
- Monitor the person’s work
- Evaluate the quality of the service provider’s performance
It can be hard work, and it will take time. It’s up to you to determine if it’s all worthwhile.
4. Do I Know How to Hire the Right People?
Successful outsourcing depends on hiring the right person. Do you have experience interviewing job candidates? Do you know what to look for when you read a resume? How about checking references — have you done that before? Or, do you plan to send out a tweet and hire the first interesting person who DMs you?
Outsourcing can be a waste of time and money if you end up with the wrong service provider, so equip yourself with the skills needed to find the right one. Referrals certainly come in handy, but they can sometimes be disastrous too.
Ask your more experienced friends, borrow a book from the library or read related websites to get some tips on writing up job descriptions, reviewing resumes, conducting interviews and managing people.
5. Do I Know How to Delegate?
There are two worst ways of delegating: giving the other person free reign, or micro-managing the other person’s every move.
Strive for a balance. When you hire a service provider, realize that you’re still ultimately responsible.
On the other hand, don’t be a control freak who thinks nobody else can do a task better than you do, or unless you’re breathing down a person’s neck. You’ll never find a provider who’ll work with you happily that way.
Before you outsource, be willing to manage, but also to give enough distance and autonomy to let another expert do what he or she does best.
6. Do I Have a Back-up Plan?
As soon as you bring other people into your business, you’re exposing yourself to some risk. What if the service provider isn’t as good as you expected and turns in shoddy work? What if he has a sudden family emergency and can’t meet the deadline? What if a hurricane strikes her city and she can’t be reached — by phone, email or Twitter?
You should have a back-up plan to have somebody else do the work at a moment’s notice, or to do it yourself. This is particularly important if you delegate tasks that are part of your client work.
7. Do I Have Something Better to Do?
Sure, we outsource to free up our time and energy, but what are you freeing up your time and energy for? If instead of doing administrative tasks you’re finding more clients, working on an infoproduct to sell, or spending time with your family or even getting more personal time, then that service provider’s fee is money well spent. But, if you’ll just be vegging in front of the TV, drowning yourself in beer, then maybe you should just do the job yourself.
Outsourcing is Not Simple
Hopefully, these questions have helped you realize that outsourcing is not simple. Take note of which questions you answered “no” or “maybe” or even “I don’t know” to. Those are areas you need to pay attention to, in order to make outsourcing work for you.
Outsourcing is not an instant solution. It’s not magic beans. It takes preparation, a lot of thought, organization and management skills to make outsourcing beneficial for your freelancing business. You’re not off the hook. And no matter how many service providers you hire, you’re still ultimately responsible for your business.
As long as you outsource with open eyes, then you’ll probably do well. For additional tips, reread Section 3 of The Unlimited Freelancer. (You do have a copy, don’t you? If not, what is wrong with you?)
What Else Would You Like to know?
Is there anything else you’d like to know about outsourcing? Post your questions in the comments below. Or, if you’d like to add your own outsourcing tips, do share them below as well.
Image by lavarue
About the author: Lexi Rodrigo is the creator of The Savvy Freelancer, a blog that's all about achieving creative and financial freedom through freelancing. Check out Lexi's free guide, 31 Days to Start Your Freelancing Business (or Make Yours A Better One).
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32 Comments
Laura Spencer
December 15th, 2009 at 1:39 pmGood post Lexi!
It’s important to think about outsourcing carefully, rather than just jumping into it.
Davor Gasparevic
December 15th, 2009 at 2:57 pmWell, I am still in the “more spare time than money” category, so I don’t really think about outsourcing. I am still a newbie, don’t have too much work to do and I feel better doing it myself than letting it to someone else.
Jason Waterman
December 15th, 2009 at 7:41 pmI agree 100%. That is why you should get referrals from others. You may also want to consider outsourcing to a firm that can do the project management for you. And Finally, it is almost always the case that you get what you pay for!
Lexi Rodrigo
December 15th, 2009 at 8:00 pm@Laura – Thank you! You’re right: done wrong, outsourcing can actually cost us time and money.
@Davor – Hey we all start out that way. But if you really need something done that isn’t your expertise, you could try bartering services with another freelancer.
@Jason – Thanks for the suggestions. I think firms would be more expensive than individuals – or is that a misconception?
Crystal
December 15th, 2009 at 8:35 pmFantastic post. I’ve had my own share of outsourcing work in the past, and have made my share of mistakes as well. This is a great guide for anyone thinking about outsourcing, whether its new to them or not!
Rik
December 15th, 2009 at 10:35 pm@Davor – I’m only starting out myself and not saying that you don’t, but I understand the importance of outsourcing when/where necessary. My skill set lies with distinct work and is also slowly getting closer to that area than being a “Jack of all trades, Master of none”. It is definitely something I would suggest you consider when the time comes, but I’m sure you’d realize that at that time. :)
I like the article. I find I look for projects that would allow me to do all the work as opposed to outsourcing due to the fact that I would make more $ rather than paying someone else to do the work. However, in some situations, I have outsourced and found it to be extremely helpful. I know that I will continue to do so when I feel it would be a struggle for me to complete a project to par with my level of quality.
Susan Johnston
December 15th, 2009 at 10:55 pmLexi, great post! I’ve been meaning to outsource some of my administrative tasks for several months now and the thing that has been holding me back is the tax implications. How do you handle taxes for the people you’ve hired? What paperwork do you need to fill out? Any other legal/tax implications I should know about?
Lexi Rodrigo
December 15th, 2009 at 11:12 pm@Susan – I’m in Canada, so my experience may be different from yours. I suggest you consult a tax preparer or CPA to see how outsourcing will affect your taxes.
Andrew @ WeBuildYourBlog.com
December 16th, 2009 at 12:01 amThanks for sharing. It is a very informative post. Outsourcing really depends on what your needs are and if you can actually afford it. And you really need to make a wise and right decision in choosing one.
Maximilian Bartel
December 16th, 2009 at 3:21 amNice post! I already tried outsourcing myself but in the end it didn’t work as expected and so I rather did the work myself. I guess it really depends on how reliable the persons you work with are – I did my best to evaluate the most suitable candidates, but my experiences were not satisfying so far because they just didn’t deliver the kind of quality I expected.
I guess I’ll give it a try again in the future especially for tasks I can’t do myself entirely, but I’d surely never pass work on to my clients if I’m not entirely satisfied with the results myself.
The only one who’s really a great help each month is my local tax accountant who does a great job. Even though working with him definitely isn’t inexpensive, I don’t like doing the bookkeeping myself and besides that it’s good to have an experienced person in charge who can answer my questions.
Mike B
December 16th, 2009 at 4:59 amYeah I agree – outsourcing can be very worthwhile, especially if you’re struggling to get the task done with time restraints. I don’t think I could trust someone else to do design work though, I’d rather have full artistic control.
Davor Gasparevic
December 16th, 2009 at 6:24 am@Rik – I don’t say that I will never outsource, forgive me if it turned out to be that way
I only state that at the moment I do things that don’t require me to find someone to do the job instead of me.
I have plans for a few niche sites that I really don’t know much about, and I would need to outsource for sure, but for now I am more than capable to cover all of my not-so-big needs.
When I establish a relatively stable income of a few hundred dollars a month, it’s easier to go and plan something bigger than just doing all the job yourself, but for now, I feel it’s even better to do all by myself in order to perfect my planning, organizing and scheduling methods in order to be more effective in the future.
Creative Ideas
December 16th, 2009 at 1:25 pmTrully tips. Thanks for beautiful article
Vunky
December 17th, 2009 at 4:01 amGreat Post,
I would love to see some “Virtual Assistant” services compared and a sum-up on what you can outsource to them. I tend to pull tasks to myself and would like to know what you outsource.
T.W. Anderson
December 17th, 2009 at 10:20 amOutsourcing is a fickle beast. True, if you want to achieve high 6 digit income, it’s going to be far easier to achieve when you are working with X amount of people, because it’s fact that one person can only take a business so far. At some point if you want to hit the big numbers you will have to hire employees and/or outsource. It’s like that old saying, “You have to spend money to make money.”
However, as mentioned in this post, outsourcing can come with its own set of pitfalls. Personally, I like keeping my business just this side of needing to outsource. I ran a small business in Colorado before I moved across the pond, and I had anywhere from 2-4 guys working for me from time to time, and to be honest with you…I just don’t like the headaches of managing bad employees.
On the other hand, if you can manage to find one of those people who bend over backwards to put forth 150%, it’s almost too good to pass up. I guess at the end of the day you just have to measure whether or not you want to deal with the hassles of weeding through the bad apples to get the golden egg, or just do it on your own.
I may hire a couple of people in 2010, but only because I want to grow the business in directions I don’t plan on having skills for, such as translations. And I wouldn’t be hiring people I don’t know…but rather the people my wife’s business connections have offered her.
Good read. Common business sense 101 :)
Luke Jones
December 17th, 2009 at 1:59 pmNice post :-).
In my just-over-a-year as a freelance website designer and SEO, I’ve only had to outsource one project. Unfortunately, I chose somebody who lives close by for convenience. This person had a full-time job, though was legally allowed to do the work for me.
I got really let down by my stupidity of picking the first person who came to mind. It’s a mistake I won’t make in the future, and a mistake that I can’t afford to make again!!! The way that the person I outsourced my work to really screwed me over and made me seem unprofessional – even though it wasn’t me doing the work.
Since then, I’ve avoided outsourcing as much as I can… That should be a warning to everyone.
J Munro
December 17th, 2009 at 3:48 pmAs a freelance PA, I found your article particularly interesting. I always sit down with new clients and get them to figure out how to use me to either save them my fee or make them my fee. There’s no use in them using me if I’m not being used correctly.
Ensuring that your VA or other outsourcer knows what it is you expect of them is really important as well; everyone needs to know what their role is & what outcome you’re working towards. Chosing the right VA that ‘fits’ with your working style also means that you don’t have to micro manage them & can just leave them to get on with it.
I think oursourcing has become far more popular nowadays – you can’t do everything yourself and you’ll never move your business on to the next level if you spend every waking hour doing routine tasks that someone else could do better & cheaper… Plus I’d be out of a job!
@munropaservices
http://www.chaoskiller.com
Sharon Hurley Hall
December 17th, 2009 at 4:34 pmExcellent post. I especially like the point about managing other people. Sometimes if you have to spend too much time on that, it isn’t really worth outsourcing at all. That said, I have found that if you select the right people it can save you time and build a valuable network.
John Coxon
December 18th, 2009 at 4:42 pmI operate a small single person consultancy and I outsource on a regular basis depending upon the need. I have also hired staff in the past and in both instances have had good and bad experiences. I outsource to other consultants who deliver services on my behalf. I only work with people I have met, have spent time with and I know their capabilities. I also have in place a formal service delivery agreement and framework which we discuss and work through together. When I have not followed this approach I have selected the wrong person and have been let down. I outsource direct mailing work, printing, envelope addressing/stuffing and postage. It doesn’t require someone with a PhD yet you have to be confident they will do the job – by the way this is a good earner for your children and they come cheaply (sometimes)! I outsource as much non core work as possible, inc web design, website maintenance (which I am behind on), I utilise a business coach, all bookkeeping & accounting, marketing design work (Im looking for someone to improve ppoint slides). It’s a balancing act between the desire to do it yourself, the ability to do a half decent job, the money to pay someone to do a great job and considering that every hour you are not involved in non-core tasks is an hour you can devote to marketing yourself – and if we don’t market ourselves we don’t have sufficient income to pay ourselves never mind pay for outsource work.
Kei
December 20th, 2009 at 4:44 amGreat post Lexi!
I am a Virtual Assistant and in just a couple of months I found myself outsourcing some of my work. Outsourcing, if not well thought and not done right can be very stressful. You might end up wasting money, and re-doing the work you already paid someone else to do.
So guys, think first before you outsource.
In contrast, once you are well prepared, with proper instructions and fortunate enough to find your Superstar Contractor, outsourcing can do you wonders.
Happy Outsourcing Guys!
Luke
December 20th, 2009 at 9:07 amI outsource about 50% of my design work and I think when you’re starting to outsource, it can be good to outsource something you’re already good at. That way you have yourself as a safety net if things turn to crap. At the end of the day, you have to sign off on the end product.
Another thing I’d like to say is that cheaper is definitely not the way to go. Don’t both with finding the cheapest person on job boards – they’re always duds. Instead find someone whose portfolio you like, get them to quote on a project and budget it into your bill for the client. That way you take care of your downside and build up your network and quality of work.
Jaspher
December 20th, 2009 at 11:23 pmI suggest you consult a tax preparer or CPA to see how outsourcing will affect your taxes.I especially like the point about managing other people. Sometimes if you have to spend too much time on that, it isn’t really worth outsourcing at all…Its a very difficult for those who read your posting.
More post about this topic
Bob
December 22nd, 2009 at 9:53 amThe major advantage of hiring a Virtual Personal Assistant instead of hiring a regular office worker is that it comes out cheaper for the company.
Teejay
January 11th, 2010 at 10:35 pm@Lexi. The part where it costs money more if I outsource is the thing that makes me wary of outsourcing anything.
Good post.
bob
February 18th, 2010 at 8:30 amA Virtual Assistant bring reliability, competence, creativity and other great characteristics to your business without the insane costs.
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