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Why You Should Think About Outsourcing Right Now
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Outsourcing is smart
I was doing a massive clean of the apartment last weekend in preparation for the New Year back at work. I wanted everything to be ordered and in place so as I could fully concentrate on growing the business in the busy month ahead without having to worry about the trivial things in life. It took me 4 hours and a massive amount of hard work. I’m not really a fan of cleaning and when I had my head suck half way down the toilet I got to thinking about outsourcing. Was spending half a day ironing shirts, cleaning toilets and taking out rubbish really the best use of my time? Before we delve in to it a little further lets look at what outsourcing actually is…
Outsourcing is subcontracting a service, such as product design or manufacturing, to a third-party company. The decision whether to outsource or to do in house is often based upon achieving a lower production cost, making better use of available resources, focusing energy on the core competencies of a particular business, or just making more efficient use of labor, capital, information technology or land resources.
It is very clear that I need to outsource the cleaning of my apartment to somebody else. At 50 Euros per week it is not an inconsiderable amount of money but you need to think of what could be done with my time if I didn’t have to clean. What sort of new business could I have attracted in 4 hours? How much billable client work could I have completed? How many articles could I have written for this blog? In short would I have made more than 50 Euros working in the 4 hours I spent cleaning? I would like to think so.
Outsourcing For Business
Outsourcing is not the most obvious thing to do, it is hard to let go of the things you control but it is what all the smart successful people do. When I talk of outsourcing here it may not even be outside your own company. These principles work just as well for large companies as they do for an individual freelancer…
Front Loaded Costs
50 Euros might seem cheap for a cleaner but it is going to take some investment of your time upfront to do any sort of outsourcing. In short the more you put in at the start teaching and training the person you are working with the better the results you will get. It might take me a couple of weeks of showing the cleaner how to work my way but in the end they will get it and I’ll be free to go and make more of my time elsewhere.
Leaving Your Ego At The Door
We all think we are brilliant. We think we are the best at marketing our own company, at selling it, at doing the accounts, at talking about it, at talking to customers or going to all the big meetings. Our ego tells us that because it is our company we need to be all things to all men and that nobody would do it as well or with as much passion as ourselves. Well that could not be more wrong. Letting go of control is the key.
The Best People Outsource
Do you think Bill Gates got to where he is by doing the PR at Microsoft? Did Steve Jobs spend all of his early days submerged in the accounts? The answer is no they outsourced those jobs as soon as they could to people who knew what they were doing. The only way you are going to grow your company in a hurry is to free yourself up to focus on what you do best.
Start Small
For a variety of reasons, mostly financial, you will be limited by what you can outsource at the start but you should look to start on a smaller scale to see the benefits of outsourcing before you start to ramp it up. Get an accountant to do everything for you. Get your blog designed by a professional rather than wasting your own time fiddling with it. Bring somebody in to sell your product.Get a cleaner. Start using a courier rather than your own time.
Outsource Internally
Rather than trying to do all of the important stuff in the company yourself why not pass some of the work on to your employees. To do this effectively you will have to have a culture of openness and make sure everybody in the company is empowered with as much information about your strategy and direction as possible. Upper management can often be secretive around information but being transparent with your goals and having clear objectives will allow you to pass work on to others and crucially have them as motivated about it as you are.
Summary
Outsourcing might not be for everybody and it will take time for you to feel comfortable with passing on work to others that you think is crucial and needs to pass through your hands. The greatest business leaders and politicians are people who can delegate work and pass the responsibility to others while still maintaining the quality of the work or product. I am starting by looking for a cleaner myself and aim to make this a year of growth through continued outsourcing.
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Leaven your ego at the door is so important. You just have to adapt to other people or else you will have problems communicating. As you’ve mentioned, everyone things they are brilliant but you have to play it smart and leave your brilliance for yourself – do what’s best for your business not your ego. Nice post!
It is easier said than done to TBH. I can do it now and am happy to pass work on to others but at the very start in business I thought I was crucial to everything and would make sure to try and do every single bit of work myself which was clearly not a good idea. Share it as much as possible
I do outsource the cleaning of my house. I started a few years ago and would have a hard time going back.
As for my business, I’ve weighed this one for a long time. I’m currently working with someone who is doing some work for me that I can’t actually do (too technical for me) which is really great for me and him. As for other work that I can do, but should/could outsource, I find it really hard to do this. I’m a one-person operation and part of my “value proposition” to my clients is that they know they will deal with me, and me only.
Taking a step to outsourcing means doing more “managing” and I’m not sure I want to go there. Still, when things get overloaded as I am now with work, I really wish I had others working on things.
Have that same problem with clients because the business that we are in is all a people business and the key is to getting to know them and building up a bond with them, that is the hardest part of the job and it is something that is very hard to outsource!
Niall, I had to respond again when I read Seth Godin’s blog post today. To me, this is why I have been reluctant to outsource. Not that I give my “lemonade” for free (read the post and it will make sense), but you get the idea.
http://sethgodin.typepad.com/seths_blog/2010/01/the-lesson-from-two-lemonade-stands.html
Very well made points as usual, he always has a different spin on things
Outsourcing cleaning equals a return on investment! 4 hour work week Tim Ferriss. Well said Niall.
Keep meaning to red the Tim Ferriss book but haven’t gotten around to it yet. As somebody said on Twitter the other day though he spends about 100 hours a week alone promoting it!
As one well known businessman once said – surround yourself with smart people and then take the credit. Outsourcing is key to modern business, companies can no longer be a one stop shop – even google had to outsource the hardware manufacturing for their nexus one phone.
You scratch my back and I’ll scratch yours. The non-profit sector is all about delegating- outsourcing- uber sourcing because resources are limited and well, creativity applied to problem solving counts. But non-profits aren’t the only ones that have to stay on a budget these days. Outsourcing is a great way for companies, large and small, to get a lot done for less but only if it is done well. There are a lot of gotchas to outsourcing. The saavy business person should be aware of how to outsource the smart way. This other article calls it outsourcing 2.O http://it.toolbox.com/blogs/future-of-work/outsourcing-20-36359
Great Insights Niall! I really had second opinions about whether it is the right moment to dive into outsourcing. Your post in fact helped me to realize that some of the notions i held true were mere myths. Thanks a lot buddy!