Let me start by defining outsourcing. To outsource is to obtain goods or services from a source outside of the company. There are many companies nowadays who specialize on building brands around products that are not made or even designed by them. In this case, they would be outsourcing their product. Apple, for example, outsources all the manufacturing to the well known company Foxconn. However, you can now outsource a plethora of services, like virtual assistants, bookkeeping, marketing, branding, etc. It’s a whole new world! Are you singing? I’m singing.
In the winter of 2012, I found myself owning a tech repair shop, while going to grad school. Back then, iPhones were starting to run the smartphone industry. I had accidentally fallen into a great market. We were in need of a computer part, so we decided to call computer shops around us to see if we could find it locally. A few calls later, a part was located and I was on my way to buy it. On the way there, I made a mental note to look around and learn from a competitor to improve my business. That day marked my life. I remember walking into the store and looking around me. I noticed all the product on the shelves and how the owner came out to shake my hand. There were even island displays with computers for sale with prices and specs. The only thing was that it felt like the store was stuck in the 90’s. I left with my computer part and notes with an insight that would help build my company. My business could never stop growing and adapting with time.
Entrepreneurs are wild and fearless risk takers. They are the superheroes of the business world. However, super-entrepreneurs come with no cape, super powers, nor effortless washboard abs. Many super-entrepreneurs still need their sleep, have families, and are restricted by a budget. Oddly enough, contrary to Superman knowing kryptonite is his weakness, many super-entrepreneurs are unaware of any of their weaknesses. They think that they can rule the world by themselves. Throw anything at a entrepreneur and it can be done. In fact, thinking otherwise is as offensive to them as commenting on one’s weight gain. Bookkeeping, branding, marketing, payroll, retail space remodel, business cards… you name it, in their mind, they are experts at it all.
While there are many steps towards a successful business, it should be clear that starting and running a business is complex. A key step towards business success is to comprehend that it takes a team and not a single person to build an amazing venture. People are costly and small businesses are usually constrained by a budget. It is also important to understand early in business, owners/entrepreneurs can’t do it all either because of knowledge or because of lack of time. There will never be enough time in the world and you will have to learn how to work against that fact. While there might be exceptions to this rule based on previous individual experience such as – you were in the flooring business before opening a retail cupcake location and you can do the flooring, well that is completely justified. However, here are some reasons to think twice before embracing a task yourself, such as:
- Is there a business already dedicated to it?
- Is now the right time?
- Will the necessary time that I need to invest affect my family/social life?
- Will this project take time away from already started projects?
I am sure you get the idea by now. Unless you just are a hotshot with everything going on, like a growing number of clients coming in, all books are up to date, employees have no questions about processes, there are no pending clients waiting for a phone call from you, all your work is up to date, and your family has had enough time from you in the last 30 days, then you are THE man / woman. I feel like if this were the case, then you wouldn’t be reading this ;).
I am going to project for a second, bear with me. The man who owned the electronic store probably decided to open his business after being annoyed at his boss who he had worked for several years. He was tired of the boss not buying newer tools for him to work with, his work bench had not been updated since he first was hired, sometimes his payroll was late, the store displays were nonexistent, and the customer service was horrible. So after complaining to his wife and friends for years, it finally occurred to him he could do it himself! He was so excited he finally quit and start dreaming about becoming the next Best Buy. So he got to work right away. He bought that new work bench he always wanted, new displays for his store, plenty of inventory, and decided he would shake every customer’s hand. But ten years down the road and he had become the boss that he hated, stuck in his ways and time. The visuals hadn’t been updated since he moved into the building. The carpet was the same awful throw-up green that he told himself he would change eventually!
Did you see what happened there? He had now become his own boss, but stuck in time, probably frustrating employees, and he was making the mistakes his boss was making when he decided to quit. He might have improved a few things, but he surely did not become the next Best Buy. Hopefully, by now, you are more aligned to my original thought. Maybe now you are seeing that this particular business owner could have used outsourcing to maintain his business like he initially planned when opening his store. He could have brought quality people to his team who could have helped him move his business forward.
Outsourcing can be your best friend, if used right. By no means am I saying go and outsource everything you do. However, if you are a growing business, you need to begin with outsourcing, rather than hiring. Hiring the correct person takes time, training that person takes more time, and guiding that person until he or she is auto sufficient takes even more time. Most likely this will be your time, which needs to be invested wisely to make your business grow and live a balanced life.
Here are some more upsides for outsourcing:
- Low commitment – Most outsourcing services are short contracts or no contracts, meaning you can stop, if it doesn’t work out.
- No training necessary – They are already proficient at what they do, so there is no need for training.
- Networking- Like any other business engagement, if done correctly, they will network for you by telling their clients about your business. “I have a client who does this…”.
- Expert source – Remember these guys are experts in their industry and their job is to assist you in making your business a success.
- Hiring or not? – Outsourcing is a good way to find out if the position would be needed. If so, you can also define the position more clearly after developing it further.
The ultimate outsourcing rule of thumb should be “I am paying someone else (outsourcing) to help me focus on tasks that will make me more money”. In other words, hang up your cape and allow other experts to join your team to make your business the best it can be!
Written by : Israel Quintal
Founder of IQ Consulting Group, Brand Owner of STS Repair, and Franchise Owner of Tech Bar with a B.S. in Electrical and Electronics Engineering from the Merida Institute of Technology, M.S. in Biomedical Engineering from The University of Memphis, and has a Certificate in Entrepreneurship Essentials from Harvard Business School Online.