Excellent Post. I think this topic is a constant struggle for small business owners. When I had a full time office manager, it was wonderful. When she left, I did not want to go through the hassle of rehiring and retraining, so I took on many of the tasks and started outsourcing more.

I just started working with a client that offers virtual assistants that do many of these things and I am looking forward to trying them out.

The link on my name goes to their site for this post.

Yeah, yeah. I know. I’m certainly at that level. I’ve just been avoiding outsourcing. Perhaps I’m a little controlling. But times they are a changin’. I’m interviewing virtual assistants right now. And I’ve found a need for a transcriber. So, here I go.

The important thing to remember about outsourcing is that it is part of a bigger picture of working “On” the business rather than “In” the business. Therefore, the goal is to always be working in the highest capacity and to make that shift as quickly as possible. At first, you may have to do everything, but outsourcing can be seen as an incremental process that leads from the place of you doing everything, to the place of the business being able to run independently of its owner.

Always a challenge to figure out the best timing. But it is especially important when you are starting to build some momentum, then as Ben says, you either outsource or you lose momentum or wear yourself out.

Many small business people seem to struggle with the intangibles vs tangibles. The ROI of outsourcing can be difficult to quantify. But the money it takes to outsource is very easy to see.

The challenge becomes weighing a difficult to see benefit against an easy to see cost. I think that’s what stops most folks from outsourcing.

It’s short sighted, sure. But it’s what they can see.

In the last 3 months, I’ve been in “startup mode”…taking something I’ve done for more than a decade and doing it in a more formal capacity (Web site, blog, marketing, etc.).

Outsourcing has been a no-brainer for me, even though most of the things are tasks that I could do with moderate ease (with the exception of a custom design for my blog). I farmed out graphic design work to two friends; in the time they did their thing, I started and finished a freelance article. I needed some budget and expense tracking spreadsheets created, so I’ve farmed that out to my father (a retired accountant). In the time it will take him to do those spreadsheets, I’ll have another article started and finished. I’ll finish quite a bit more while someone redesigns my blog.

Starting up and running a business is hard enough without dragging yourself down with the tasks that you don’t like to do or that aren’t in your realm of expertise. If you’re only going to do something once in a while (like Web design), why learn it well enough to do yourself, only to forget most of it when you upload your site?

That’s one of the beauties of self-employment — being able to delegate the stuff you don’t like to do and keep everything that you enjoy doing. 🙂

Thx for the tip.I will put it in Blogg Buzz

Outsourcing is something I really need to do more of. I did outsource some last year, but I am not at the level of doing so for peak performance yet.

Thanks for the reminder.

Overall outsourcing is viewed by many organisations as a strong business tactic that ultimately
is a superior economical approach to developing products and services.

Great advice. I find myself doing a lot of the web promotion and design my self. It has taken away from other adverting methods, but since it is my first time it is always good to tackle it head on. I agree with you on the outsourcing as soon as possible statement. Also, communication is key when it comes to successful outsourcing!

Cola Tax & Solutions – Tax & Bookkeeping Service

Consider Tips of Outsourcing

1. Clearly define the scope and schedule for your project
This might seem obvious, but any successful outsourced project always starts with a clear statement of what you are hoping to accomplish. Define your project requirements up front. Service providers need accurate, complete information to present you with realistic proposals and to quote you a reasonable price. Be specific about the deliverables you expect the vendor provide. Give vendors as much information as you can about what you need delivered and the way in which you need the work done. Also, be clear and realistic about your schedule requirements – project schedules can have a huge impact on project costs.

2. Evaluate a service provider like you’d hire a full-time employee
When you’re evaluating proposals from service providers, don’t be afraid to ask questions. Just like hiring a full-time employee, selecting a vendor is a very subjective experience. Check their references and ask for feedback from other clients who have used their services. Engage in a dialog – if you have any concerns about a vendor’s specific capabilities, voice your concerns. Don’t just stew about it and hope for the best.

3. Look for specific experience fit
Ideally, the service provider you select will have specific experience with the type of project that you’re undertaking. You don’t want to be somebody’s “guinea pig.” This is especially crucial when outsourcing complex technical projects such as software development. For example, if you’re looking for someone to develop an application for the Palm PDA, make sure they’ve actually completed commercial projects on that platform for other satisfied customers. This advice holds true for other types of projects as well. If you need a business plan for opening a retail store, you’ll get best results if the consultant you hire has verifiable experience in the retail sector.

4. Don’t choose a vendor based solely on price
Though it might be tempting, never select a vendor based solely on price. Experienced buyers who have outsourced many projects and evaluated hundreds of proposals almost always recommend discarding the highest-priced and lowest-priced bid. Buyers report that their most successful projects are the ones where they felt the vendor offered a balance of good value and quality results.

5. Review portfolios and samples
Examine the vendor’s previous work (their “portfolio”) and make sure that their previous work meets your expectations for quality and style. If you’ve evaluated a vendor’s portfolio, references and previous experience and are still unsure of their capabilities, consider asking them to do a quick mock-up or provide a basic outline of a work plan. A service provider who really wants to win your business might be able to give you a rough concept so you can better understand their approach to solving your problem. But never cross the line between asking for a mock-up and insisting that a vendor provide you with finished work “on spec.” No qualified professional expects to work for free.

6. Start small
When engaging with a service provider for the first time, start with a project that is relatively small and simple in scope.
This will give you a better idea of the provider’s style and capabilities before you entrust a “mission critical” project to them.

7. Tie payment to clearly defined project milestones
Just as you should be clear about project scope, make sure that you define a work plan for your outsourced project with clearly defined milestones. Having scheduled checkpoints where you review the status of the project as it works toward completion—is an easy way to ensure that you meet your final deadline and that the final product meets your standards. Tie the vendor’s payment to these milestones. A good guideline for IT and software development projects is to pay no more than 20% to 30% of the total project price up front, with the rest of the payments awarded based on the completion of 3 or 4 milestones.

8. Negotiate ownership of work up front
For any type of outsourced project, make sure that you are clear about who owns the resulting work product and any important components of that product. Make sure the service provider understands how you intend to use the deliverables that they are agreeing to provide. For example, the development of a custom software application for your personal use would be substantially different from the development an application that you intend to package and re-sell.

9. Don’t forget about support after the project is complete
For technology projects, it’s a good idea to specify a warranty or support clause so that you are assured of some amount of continuing support from the vendor after the project is complete. It’s much easer to negotiate a support clause before the service provider begins work, rather than after the completion of the project. Even creative or business services can benefit from a support clause. Suppose you need some changes to a business plan based on feedback that you get from potential investors. Or maybe you find that you need that snazzy new logo delivered in a new type of file format. Specifying some amount of free support or negotiating discounted prices for future modifications can save you time, money and headaches later on.

10. Get it in writing
During the course of a service engagement, the scope of the project, deliverables or even the agreed upon price may change. Make sure that you clearly communicate any schedule, scope or payment changes to your service provider and get confirmation from them – in writing – that they understand and agree to the changes. Similarly, keep a record of any agreement changes requested by the service provider and whether you accept or reject those modifications. Save copies of any email exchanges that you have.
You can access top-notch expertise any time you need it without the overhead of hiring full-time staff. By staying focused on your core competencies and hiring expert freelancers for your other needs, you can compete with the delivery capabilities of larger organizations while maintaining your independence.

Another item to consider outsourcing is custom application development.

The tools and processes your business uses to achieve success are unique. Employing proprietary software specifically designed to support and enhance these unique processes is the next most logical step toward the sophistication that positions your company ahead of the competition.

Critical to the successful implementation of this software is selecting the right web development company; a company that can truly understand the flow of your business and can design and implement the proper supporting software in a logical and cost effective way.