Outsourcing to Upsize Your Small Business Profits
Posted by Nicole Fende in Business Plan, Productivity | 32 comments
If you’ve ever eaten at McD’s (I blush to admit I love their fries), you know they’ll ask if you want to super size your meal. Wouldn’t it be cool if you could go into the Small Biz Store and super size your profits?
While it may seem counter intuitive at first, paying someone else to do certain things can actually improve your bottom line. The trick is to know when and what to outsource.
Now our villainous Number Muncher would love for you to think all outsourcing is bad, or convince you to to outsource the wrong things. Luckily I’m on to his villainous plot, and with the help of a few friends, will help you outwit his dastardly designs.
Time to Upsize Your Bottom Line!
Ready to get started? Great, let’s begin with which activities are candidates to be outsourced.
What should your small business outsource?
The first rule of Fight Club outsourcing – never outsource anything that is critical to your identity or brand. It takes years to build a reputation and seconds to destroy it. While I love to have guest bloggers, my unique sense of humor (and the laugh, don’t forget the laugh) are integral to my brand. Having someone else write all my posts would actually undermine my business.
Take a few minutes and brainstorm all the activities you do in your business. Pay particular attention to repetitive tasks, even if they only take 5 minutes at a time. Consider if you could save 5 minutes a day for a year, that would be over 20 hours a year! (5 minutes * 5 days a week * 50 work weeks = 1,250 minutes or 20.83 hours). Who couldn’t use an extra 20 hours a year?
Need some help assessing your list? Fluffy the Finance Feline is here to help!
- Is the task something that you could easily document and / or train another person to do?
- Does the task involve a skill set that is NOT your core competency. For example, I can’t draw, so I pay someone else to illustrate my cast of characters.
- Is the cost to outsource less than you could earn if you were working with a client?
If you answered yes to to these three questions the activity or task is a candidate for outsourcing. Of course you still need to use common sense. Putting gas in my car would qualify according to these three questions, but is that really practical?
When should your small business outsource?
When it’s a matter of expertise I generally recommend using an outside resource. Going back to drawing for a minute, have you ever seen the original Fluffy? No? Here he is. Now you can see why I paid someone else to draw him!
The second thing to consider is what will you do with the time you free up?
Can you spend it on other, revenue generating activities? If yes, and you can earn more than you are paying to outsource the time is right!
What if you are still building your business, and you have more time than money? I’d suggest holding off outsourcing the repetitive tasks. Document them, be prepared to hand them off, and then when your business revenue grows you can gradually offload to a third party.
You may also want the time for your personal life. Maybe you are working 60 hours a week now, and this would let you get down to 45. While I love my business, I also want to have enough time to enjoy my success with my friends and family.
Final Thoughts
Do you outsource anything right now? If so, what? Has it paid off for you? If you haven’t outsourced yet, will you consider it now? Sound off below!
This post is part of the April Word Carnival — a monthly group blogging event specifically for small business owners. (It’s the most fun you’ll have all month!) Check out the rest of the fabulous carney work here.
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Nicole Fende, A.S.A.
The Numbers Whisperer ™
President, Small Business Finance Forum
Great advice, Nicole. Sometimes when we’re building our business, we don’t get that the expense of paying a bookkeeper $20/month is actually going to allow us MORE billable hours. And if my hourly rate works out to be $175, then I just SAVED myself $330 (if it takes me 2 hours to do my own books). PLUS (hello!) I really don’t enjoy doing the books, either.
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Tea Silvestre recently posted..When You Just Need to Get ‘Er Done! Employees vs. Independent Contractors
Good ways to spell it out to be cost effective. It is hard to sometimes relinquish anything!
Great advice, Nicole – understanding the time and resource benefits of outsourcing is key, as is making sure you don’t damage your brand when you outsource. That’s why in the past when it’s gone wrong, I end up staying up till midnight to make sure that the client gets the job he expects.
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Sharon Hurley Hall recently posted..Outsourcing: Friend or Foe?
Love the idea of actually adding up the minutes in the day over a year Nicole. (That’s why you’re the number’s whisperer!) I have a friend who will not entertain anything that they deem to have wasted a minute in their lives. Quite a punishing mantra to live by, but actually why would we waste even five minutes a day doing something we don’t like and could easily outsource to someone who did. Great mindset shift, thank you.
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SandyMc recently posted..Outsource. Work ‘in flow’ and eschew the Peter Principle!
All great suggestions! People get so stuck in the “I have to” mode, they often neglect to shift their thinking to see the true benefit/loss elements of a choice. The money argument is a good one, especially for entrepreneurs who just plow through to get it done, unaware of the real cost.
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Katina Pfannkuch recently posted..Outsourcing for Your Small Business: A Choice for the Heart, Mind or Both?
I haven’t grown my business to the point that outsourcing is feasible, but I like how you explained the cost-benefit analysis. That makes a lot of sense. Someday I’d like to outsource some sales functions of my writing (marketing to church groups, for instance).
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Christy Bower recently posted..You Are God’s Princess Warrior—Will You Fight for Your King?
Outsourcing can take a huge part of our budget. I agree that when deciding to outsource, at least we are sure it is really needed. I personally don’t feel the need to outsource yet. But I can see myself acquiring them in the future especially that my business is growing.
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Lisa recently posted..DTS Home
What will you do with the time outsourcing frees up? Great question!!! We do need to be prepared to use that gift of time and energy for true business building not for getting minor stuff off the to-do list. I once hired a VA so I could rock my sales and for the first few weeks did everything but sales. Hard lesson learned! Thanks Nicole.
Nicole, “never outsource anything that is critical to your identity or brand” works great, until you make EVERYTHING identity critical.
For example, I create each invoice and contract to be special for each business I interact with. It’s a huge selling point and not something easily handed off!
On the other hand, there are several areas in which I am not top boss – for example, anything having to do with money. It’s a wonder my wife lets me out of the house with a wallet.
When it comes to making marketing ideas or brainstorming, I’m all over it. Understanding analytics? No problem. Cash… I’d probably have better luck understanding quantum physics.
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Nick Armstrong recently posted..The Danger of Doing Everything Yourself
Here Money and our investment is the matter to buildup our Business. Though we’ve a Outsourcing make sure about our brand value and future Benefits is make sense.
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Robert Jordan recently posted..A Short Guide to make Loyal Customers
I have to admit that I do like guest posters. It gives me content I didn’t have to write. And since I approve them before I post them, I’d like to think I can keep up the quality of my site. Still, I do like to do the bulk of my own posts.
As to outsourcing, I’m not to where I can do that much yet, but I’m still trying to decide what activities I need to concentrate on and which ones I would be best outsourcing. I know my brother is starting to outsource some of his graphic work because, like you, he’s not good at it. (I was wondering what that 31 thing was with the ears and tail!) I still have to do a lot myself as I build up my sites, but there’s many things about doing this I’m really enjoying — which is going to make it hard for me to decide what to outsource.
Thanks for sharing!
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Grady Pruitt recently posted..Understanding How to Properly Use the Secret Law of Attraction
Two thumbs up on this one, Nicole … and I don’t even like math. LOL
As a recovering perfectionist (I know. Everyone groan at once.), it’s exceedingly challenging to give anything over to someone else. Especially when we R.P.’s finally get the courage to outsource some task and we end up working with a nightmare of a human being. I’ve seen that movie once and I really don’t care to watch the sequel.
I’m the marketing coordinator for a local ophthalmology practice and I’ve outsourced exactly one project so far … a simple little new logo for the business … which after several months, never met with the owner’s standards or approval. UGH. Somebody shoot me.
In my own small business, I’m currently a DIY-er all the way — not so much because I’m a R.P, but because there’s no dough in the budget to cover outsourcing. I have, however, bartered with others in the past and had positive experiences.
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Melanie Kissell recently posted..Think Of These As Multi-Vitamin Supplements For Your Business
I haven’t outsourced yet, but I like the idea of being able to upsize my business like a meal from those fastfood chains.
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Tamar recently posted..blucigs reviews of the electronic cigarette
I couldn’t agree more to you. I’ve learned a lot of good things here. What big changes can outsourcing bring us? By the way, thanks a lot for sharing your ideas! Keep up the good job!
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Emilia Tucker recently posted..Click here
I really appreciated this advice. I have been putting off outsourcing for the past several months and hopefully this post will spur me to finally take action and hire somebody to help me out! I think it is easy to fall into the trap of saying that you’ll hire somebody “next month” and next month never comes…
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Chad recently posted..Magnetic Messaging Review: Bobby Rio & Rob Judge’s Texting System…
I create each invoice and contract to be special for each business I interact with. It’s a huge selling point and not something easily handed off!I personally don’t feel the need to outsource yet.
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Jeanie recently posted..Is The GoPro Really That Good
I would love to outsource, but the thought of ruining up the brand it took me a while to establish discourages me to do so.
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German recently posted..buy cheap scrubs
I not only agree that you have to look at what you can be doing instead in terms of profit, but also one or two little things for yourself as a person which in turn will improve your productivity.
Now – I want french fries….
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Rachel Blaufeld recently posted..Bethlehem Haven: a shining jewel in the Pittsburgh Community
I have been putting off outsourcing for the past several months and hopefully this post will spur me to finally take action and hire somebody to help me out! Thanks for sharing.
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Claire recently posted..Lisa Olsens Pregnancy Miracle Book Reviews
I think it is easy to fall into the trap of saying that you’ll hire somebody “next month” and next month never comes…Thanks fro sharing.
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Barry recently posted..Spring Allergies Symptoms
I so love this article! I also have a dream of upsizing my business and it seems that outsourcing is the way to go.
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Christina recently posted..jamorama review
the hard parts of outsourcing is to share our brand reputation and identity…
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when the outsourcing gone wrong, the brand and reputation is on high stake…
Billy Joel recently posted..Have You Had The Efficient College Notes?
I’m actually not huge on outsourcing. I try to keep it local as much as possible.
Sometimes we have to outsource our website designing projects that we are not good at of-course.
It becomes necessary sometimes to just hand up some of your task to other company so that you can concentrate on your core business.
Hello ! my name is Hutch & i’m a professional web developer … and full time freelancer.
Outsoucing is great but not for everything … some times you need emergency support from the guy who did the work and you can’t always reach him.
I had to deal with this case before and the end wasn’t happy.
I think the first thing to consider is the right time to outsource your business. Just one wrong move, a lifetime to regret.
This is an excellent piece, I agree wholeheartedly with not outsourcing aspects of your business that are integral to your identity. Many people make the mistake of outsourcing everything, only later to find out that it wasn’t the best decision. But I guess, once you’ve started making money, it can be rather tempting to get others to do all the work for you.
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Robert Olsen recently posted..Top Registry Cleaner
Outsourcing is fitting an increasingly prevalent tradition for both small and large businesses of today. They are use by many to make their work less heavy, more comfortable and seek the help of other experts on a specific niche.
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Link Building Services recently posted..The Top 20 Lessons Learned From Over 3 Years of Being SEO Consultants
I think as businesses grow outsourcing becomes the natural course of action. The only drawback of outsourcing that I’ve seen is that many people like to go cheap, meaning, they hire people who are barely competent and thus produce inferior work. Outsourcing is an excellent way of growing, but at the same time, it shouldn’t be seen as a way to cut corners. In my opinion.
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Elliot Smith recently posted..Download MP4 Movies
thanks for mentioning some of the best points here commendable work will visit here for more
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Shane knight recently posted..Top Web Services Testing Tools
Hi Nicole.
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Good advice. I have tried to outsource some of the tasks in my small business, some with success and some with less success. I think there is a lot of learning involved in outsourcing. To get better at it, each time I outsource something I take notes on what works well and what doesn’t. This way I can get better from one time to the next.
Kasper recently posted..Marketing profitability – how to estimate it and improve it.
I think outsourcing is a natural process of development in business, once you’ve reached that point of a semblance of success, you will naturally seek to outsource certain aspects of your business. One thing that I wholeheartedly agree with, is in the area of what you should or rather shouldn’t outsource. Quality trumps quantity every time, and that’s because in the area of longevity, that which is made in haste will NEVER last.
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Uchenna recently posted..How to Fix an AppCrash