It’s never been easier to start your own business. With the range of financing options out there and free online tools available, pretty much anyone with a great idea and a solid head for business can take the first steps into entrepreneurship.
There are a lot of different tasks that entrepreneurs need to attend to when building a business, particularly at the beginning. There’s usually not much money for expanding staffing before funding is secured, and many entrepreneurs are forced to wear different hats, dabbling in bookkeeping, customer service, copywriting, design—the list goes on.
However, once this habit of putting in 16 hours a day and trying to do everything yourself becomes the new normal, it can be hard to step back and figure out when you should start outsourcing some tasks. Even if you don’t have funding yet, some tasks are easy and cheap to outsource, and it may help you reach your goals faster than trying to wear all the hats at once. Here’s what you need to know about smart outsourcing as an entrepreneur.
The benefits of outsourcing
As Fortune 500 Product Manager Andre Bourque explained in an article “When to outsource, and when to build your internal competencies” on the CIO website, “As an entrepreneur, you are a problem-solver. Don’t let that strength become a weakness by taking on too many processes that could be better addressed by outside experts who are more capable than you.”
For example, if you’re looking to better understanding your market and what makes them tick, it may be a smart idea to try and find a data analyst to help you develop an algorithm that can help you better understand your audience.
Netflix uses algorithms to find out what makes people tick and they’re remarkably good at it—75 percent of Netflix users’ activity is based on algorithm recommendations. But until you’ve grown your business enough to cover the cost of hiring someone on full-time, you’ll have to roll up your sleeves and do it yourself—but outsourcing can be a good third alternative.
It can be a great option for entrepreneurs when hiring full-time staff often simply isn’t an option for a fledgling company, especially if your business is bootstrapped. Payroll and benefits are expensive, and even if your employees are also wearing many hats. Hiring a short-term or skill-specific contractor can free you from some of the legal and tax-related obligations of hiring on your own in-house talent.
When you outsource to a freelancer or agency, another benefit is that you’ll usually be able to hire someone with specific expertise. Often when I advise entrepreneurs who are looking to expand their team, many are only interested in hiring someone who has a broad skill set to cover a lot of duties. Of course, this makes sense. You want to make the most of your resources. But what I learned when I started my first business is that you need to find a balance between multi-skilled workers and those that are experts in a single area.
What I’ve found is that with experts, you not only have someone that you can count on to produce, but you also have someone that is committed to researching the field and keeping with the latest trends. This isn’t always possible with individuals that take on a lot of different duties and spread themselves a bit thin.
The drawbacks of outsourcing
Of course, as with most things in life, there are some drawbacks to outsourcing. First, you have to be willing to give up some control. This might be difficult for you, depending on your personality. Delegating and trusting someone with any part of your business—especially someone you don’t know personally—is a risk. There’s no way around it.
Tonya Thomas, president of The Small Business Assistant, learned firsthand that letting go was the hardest part of delegating:
“At first I felt like I was the only person who could do the work efficiently; I wanted control over everything […] but I wanted my business to grow and in order to do that I had to let go and start delegating,” she says.
Outsourcing has its own costs, and it can be a big waste of time and money if you bring in the wrong person. Investing in your business is crucial for growth, but taking the first steps into outsourcing can be scary. The responsibility of choosing someone competent is all on you, a concept that can be intimidating—I’ll offer some tips on how to find the best candidates at the end of this article.
Keep in mind that outsourcing and even direct hiring won’t eliminate your workload in any particular area. Once you’ve hired one or more people, you’ll have to communicate with, cultivate, and help them prioritize and juggle the responsibilities—management takes time and effort.
When should you outsource?
There’s no magic formula for deciding when to outsource, but every entrepreneur knows when they’ve hit the edge of their limits. There’s only so much one person can do. Maybe it’s lack of time—you’re trying to work on a marketing plan, but the financials demand attention (time to hire a financial professional!).
Or, maybe you’ve made some mistakes that cost your business customers or money. Maybe you’ve realized that you simply don’t personally have the deep skills you need in a certain area; mastering new skills can be a slow process and may not be the best use of your time. Sometimes, it’s better just to hire someone.
But when you first start thinking about outsourcing, don’t overlook the power of digital tools. Automation software can take care of necessities like email follow-ups for a fee, freeing up your time and focus for more important work—but especially for small businesses, beware of the illusion of “set it and forget it.” Automation is only as good as the person who is overseeing and monitoring automated processes.
Consider starting small—gradually outsourcing tasks will be less financially painful, and you’ll learn how to hire smarter as you go. Even just hiring a virtual assistant or personal assistant can take a few things off your plate and give you the opportunity for faster growth!
The best tasks to outsource
As the founder of your business, only you can make the decision as to what to outsource, based on your skillset (and weaknesses). Be honest with yourself. If you’re a web developer, you probably don’t need another one on your team just yet. If you’re a writer, you can save some cash on copy for now.
But there are some roles that are easier to outsource than others, such as:
- Web development/maintenance
- Graphic design
- Social media
Even something as simple as an email can be a good task to outsource. Nick Friedman at College Hunks Hauling Junk hired a virtual admin to sort through his email and prioritize it, allowing him to respond more efficiently.
Pro tip: Don’t just settle for the cheapest option
Let’s get one thing straight: settling for the cheapest option just because it’s lower cost won’t serve you in the long run. I’ve consulted a number of startups that had initially used the cheapest person they could find to ensure that their site was mobile-friendly.
I told each one that this was a terrible idea, as mobile would soon outrank desktop for consumer-driven traffic. At the time, because mobile shopping wasn’t huge, quite a few of them laughed at me. Some listened. And guess what? As of 2017, mobile commerce (m-commerce) is considered one of the leading industries. In fact, smartphones are projected to capture $129.44 billion of all retail by 2020.
And to be honest, some of the same entrepreneurs that laughed at me ended up coming back for a second round of advice years later. Learn from their mistakes—be sure you’ve weighed the costs against the benefits when you’re making staffing decisions.
Pro tip: Find the right tools and people
Now, you’re probably wondering, how do you find talented people to help you build your business? Well, it’s best to use a few different strategies, rather than relying on just one method. That way, you’ll have new leads all the time and you’ll be able to choose what works best for you.
Here are some tips:
- Leverage your network. Talk to friends and family and see if they know anyone who would be interested in taking on some projects. Join Facebook and LinkedIn groups for entrepreneurs and ask for recommendations—people who have been in your situation will often have great advice.
- At networking events, keep your ear to the ground and ask for referrals—personal recommendations will help you find the best of the best.
- Look in the right places. Don’t go on Fiverr hoping to find a skilled professional who will be invested in your business. Instead, post on a skills-specific job board and network on social media.
- Do a little research on the going rate for the services you’re seeking before you post. Quality freelancers know their worth and won’t accept a project for less than a fair price.
- Ask for work samples. Don’t be so concerned about whether or not someone has a fancy portfolio—as long as they have solid examples of their work, you’ll get a good indication of how they’ll perform for your business.
- Require a (paid) test project to set your parameters and see if your candidate can meet your expectations and follow directions before entrusting them with a larger project.
- Listen to the questions candidates ask. Someone who cares about adding value to your business will have just as many questions for you as you have for them. Just try to have a conversation and use it as a way to see if your business and the candidate are a good fit.
- Last but not least, just do some digging online! Free and paid organizational tools, bookkeeping and time tracking software, websites of agencies and freelancers who can help you—they’re all out there. All you need to do is look!
Hiring outside help can give your small business a big boost if you approach it thoughtfully. Remember to document your expectations, especially if you’re outsourcing a particular project. Make sure everyone is on the same page about the scope of the work and the expected end result.
Most of all, be honest with yourself about your skillset—being self-aware enough to know when it’s time to bring in someone with expertise that you don’t have will put you ahead of the game in the long run.