I chose an aggressive title for this article on purpose. In fact, my business partner Heather didn’t like it at all because she was worried it would make people feel like failures before they ever even read the article, which completely opposes our life’s mission to empower people to create sustainable income. The truth is, I don’t want people to feel like failures at all. I just want everyone reading this to understand that there are things that you and your business can do that will heavily dictate the success or failure of your outsourcing efforts. Outside of random bad luck, the majority of the time when analyzed, a failed outsourced relationship could usually have been prevented by YOU and your business. I want to show you how to consistently create outsourcing wins!
Business owners tend to get really excited about the topic of outsourcing because they think of it as this magic bullet that is going to allow them to scale their business to the next level and free up their own personal time to work ON their business instead of IN their business. I agree with this. I do believe that creating successful outsourcing solutions is the secret sauce behind scaling any business where you don’t want to employ full-time, in-house teams. However, there is nothing magic about it.
Outsourcing Reality Check
The thing that most people don’t realize is that in the beginning outsourcers are not usually an asset. Establishing long-term positive relationships with reliable outsourcers requires both time and money in the beginning. It’s your job, as a business, to turn that expense into a long-term asset. Many people fail to fully benefit from outsourcing simply because they do not understand this reality. Honestly, this shouldn’t be surprising. Most things that positively impact your business require either effort, money or both before it becomes a monetized asset.
Don’t let that reality check discourage you. Outsourcing really is the answer that many businesses are looking for. You just need to go about it correctly. In this article I’m going to give you some of the best tips and strategies that we have learned from running an outsourcing company for almost 9 years. I’m going to cover how to determine which components of your business will be the most strategic and beneficial to outsource. How to have the highest chances of getting the outcome and results that you are looking for as well as how to avoid some of the most common (and painful) pitfalls that waste your time and money. Lastly, I’ll share with you some of our favorite outsourcing partners and solutions.
Not every outsourced task is created equal. What I mean by this is that not every task you outsource will have equal benefit to your company. This probably is not a shock to you and sounds like a reasonable statement. The challenge lies in deciding which jobs will be the most beneficial to outsource vs. what you should keep in house. The answer is different for each business. Therefore, you need to understand how to evaluate your business, available resources and needs to properly determine which aspects make the most sense for you to outsource and which make more sense to keep in house or do yourself.
The Outsourcing Decision Grid
One tool that you may find useful in deciding what to outsource vs. what to keep in house is by using an Outsourcing Decision Grid. The point of this tool is to ask yourself two questions when considering outsourcing any job.
- How important is this task to your overall strategy? Jobs that are important to your strategy means they impact your overall competitive advantage.
- What is the impact this job has on the company’s day to day operational success? Jobs that have a high impact on your operational success contribute greatly to how smoothly the company runs.
Form Strategic Partnerships
Tasks in this section are ones that are very important to the overall strategy designed to give your company a competitive edge. However, they do not greatly impact the success of your day to day operations. That being the case, you want to have transparency and control over them, but since they have insignificant negative impact on whether or not your company runs smoothly, it’s not necessary to devote full in-house focus on them. These jobs and tasks are great candidates for forming a trustworthy strategic partnership.
Let me give you an example. If you have a thriving business selling products on Amazon, you may be interested in scaling your business in such a way that a larger portion of your sales comes from an independent Ecommerce site that you own as opposed to sales on Amazon. In this scenario, you definitely care about how that marketing shift will take place because it’s representative of your brand and company. However, it has next to no impact on your day-to-day thriving operations on Amazon. Therefore, you may choose to hire a trusted marketing agency to work hand-in-hand with you on developing and implementing that transition strategy.
Jobs located in this sector are highly important to your overall strategic plans and highly impact your day-to-day operational success. These are the jobs that you want to most maintain complete control over. I’ll stick with the example of a thriving ecommerce business, only this time, let’s assume the Ecommerce business generates the majority of their business from their own websites and their primary lead acquisition and sales come from affiliates.
Their overall competitive edge comes from their fantastic relationship with their affiliates. Likewise, if the relationships and management of their affiliates were to get screwed up, it would not only be an operational nightmare, but it would also massively impact their revenue. That being the case, a likely decision would be to manage their affiliates with a full-time, in-house employee.
Jobs in this section impact your day-to-day operational success heavily, but have little to no bearing on your strategic success or competitive edge. These are perfect targets for outsourcing because by doing so, you greatly lighten the load on your operations, and yet the risk of negatively impacting your revenue in a way that is not easily corrected, or of throwing your strategy off course is relatively low.
A few examples of things an Ecommerce business might outsource are:
- Writing product descriptions on new inventory
- Blog posts for SEO purposes
- Virtual Assistants to help with repetitive admin or data entry tasks
- Greeting calls made to new customers
- Basic Customer Support
Stop Doing It
Jobs located in this section are not particularly important to your overall strategy, nor do they have much, if any, impact on your day-to-day operational performance. That being the case, it’s time to evaluate why you are doing these jobs in the first place. Can you eliminate them completely? Can they be merged with other tasks so you can kill 2 birds with one stone? Can they be modified to become more beneficial tasks?
A great example of this would be an Ecommerce business that is running a regular podcast that is fun and interesting but is low value because it isn’t really generating any leads or sales for your company, nor are you putting in the effort to put marketing budget behind it to increase your exposure and brand. This becomes worth assessing whether you should keep doing it or not, or if you should change your structure so that it becomes more beneficial and therefore can be moved into a different quadrant.
It’s Not Always Black and White
While the Outsourcing Decision Grid is a useful tool, it’s not always the black and white logistics that you make your decisions on. This can especially be true when you’re in the startup phase and your business is you and maybe one or two additional people.
For instance, sometimes the thing that is most important for you are the jobs that you absolutely hate doing. Just because we are good at something doesn’t mean that we enjoy doing it. There may be jobs that you do and that are even high value to your company, but you would rather swallow broken glass than do it for one more minute. Those are things that are acceptable to consider outsourcing.
Sometimes even though a job falls right into the “Stop Doing It” category, you simply can’t stop doing it because it’s a task or series of tasks necessary for your company. Often times these are wash, rinse and repeat tasks that while low value, need to be done. Therefore, often time it’s a better decision to pay some money to an outsourcer, as opposed to tying up internal resources on it. It seems like every company has at least a few jobs that fall into this arena.
Pick and Choose
At other times, especially when you’re either in startup mode or into a big upturn into success, you will find yourself with more high value, high impact jobs than you have internal resources to meet. The jobs can’t wait for you to go through the important, and often lengthy hiring process and you have to choose what to keep in house and what to outsource. This can be a scary situation and will hopefully always be temporary. However, outsourcing in order to keep internal teams focused on other things is a common decision companies find themselves making at times.
Lastly, sometimes even though a job is high value and has high impact, it’s just significantly more practical to outsource it as opposed to keeping it in-house. One example of this would be finding it far more cost effective to outsource instead of do internally. Another example is when the job requires specific, specialized skill sets that don’t make sense for you to employ internally.
Ultimately, it is less important which method you use to decide what should be outsourced and what should be done internally than it is to have the ability to honestly assess your business, internal resources and external options. A good business owner should have a good read on the current state of affairs for his business, what his end goals are, and what paths make the most sense.
Let The Divas Do It For You!
Contact us at firstname.lastname@example.org to inquire about how we can take care of your outsourcing needs!