Whether you own a small or large business, chances are very good that you can benefit from outsourcing some of your business functions to outside vendors. Ideally, you want to be in a position where you are working on your business, rather than in your business.
Running and operating a business positioned for growth requires many different key functions. For starters, you must handle accounting, administration, customer service, as well as sales and marketing. Many new small business owners attempt to tackle all of these functions on their own, and find that they work long hours and can begin to burn out quickly. By outsourcing some of your routine tasks, you can leverage your time to spend on the functions that you do best in order to grow your business.
When trying to determine whether outsourcing will benefit your company, you need to determine how much money your time is worth. A simple way to figure this out is to estimate how much money you would like to make in a year, and divide that into productive work hours. Most of us are only productive about 2-3 hours a day. For example, if you’d like to make $200,000 this year, and you work 3 productive hours each day, 5 days a week, then your time is worth roughly $260 an hour. With this scenario, you could benefit from outsourcing any function that you can pay someone to do for less than $260 an hour.
In order to outsource effectively, you must understand your own business and processes. Take some time to write down job descriptions for different functions, as well as the processes you use in your business to accomplish certain tasks (like how you enter your invoices and receipts, how you generate new leads and clients, etc.). As part of this exercise, include clear expectations of what you hope to accomplish. A clear vision and business plan is key to setting up clear expectations. Once you have written down the job descriptions, you’ll have a better idea of what you would like to outsource first.
There’s no hard and fast rule as to which job functions you should outsource first, but many business owners like to hand off the functions that they enjoy the least. If you really dislike customer service, you may want to find a customer service rep first.
You have many options when looking for companies or services that will handle your outsourcing needs. Check with others in your industry to see who they use to outsource their functions. Many outsourcing firms not only specialize in certain functions (like customer service), but also in certain industries (like real estate). You can use freelancers, virtual assistants, or any number of outsourcing firms.
Many business owners hesitate to outsource some of their functions because they want to have complete control over their business, or they believe that it will be too difficult to train someone to do what they need. If you fall into this category, you may want to try outsourcing some very simple, routine tasks to get started. It will be well worth the effort!
When choosing an outsourcing firm, or freelancer, make sure you set clear expectations up front. Share your vision about how you see that function growing your business, and offer incentives for work well done, or work done under budget, or before a deadline.
In addition, take time to properly document how the work should be performed. This can be done easily with screen capture video software, and/or written processes and procedures.
Taking the time to properly train and motivate your outsourced personnel will benefit your business greatly. By now, you will see that outsourcing some of your business functions will help free up your time to work on your business, rather than in your business.