- You can't manage to do everything at all times, even if you're the most experienced and savvy business owner.
- Luckily, outsourcing work has become the helping hand of numerous business owners across the world.
- If you're asking yourself the questions of how to outsource, when and why, then you're in the right place. Keep on reading.
Admitting you can’t do it all alone or just don’t have the skillset for the task at hand is hard for most people but especially for business owners. It can seem like failure or throwing the towel in and that’s why so many business owners think outsourcing work is a dirty phrase. That could not be further from the truth.
Recognising that someone else could do a better job or that at least it frees you up to do other things you’re even better at is not failure. It’s empowerment. It’s leadership. It’s good business sense. It’s just plain intelligent. Outsourcing work is a strategic tool that can help improve productivity and boost your business’s profits if you know how and when to take advantage of it.
So when do you outsource and how to outsource? That part is both easy and hard. There are some things you shouldn’t outsource, at least not for the time being, such as customer service if you’re a small company because you need to keep that rapport, familiarity and customer knowledge in-house.
The best thing to do is put every task through a “profit, length, cost and skills analysis.” Sadly there’s no cool acronym to help you remember this unless you like the phonetic “plocksa”. I’ll stick with PLCS for short.
So, the PLCS analysis
- Profit: is this activity taking time away from my profit generating tasks/is it a core essential to making money?
- Length: is this a temporary requirement or something that only needs doing periodically?
- Cost: is it more expensive to do this in-house/is it cheaper on paper but wasting the time of someone who could be generating profits?
- Skills: is this something we are trained to do/do we have to pay to train someone up to do this/do we have the skills in-house already?
Many business functions can be outsourced from accounts, logistics, and training to PR, IT and customer service. When you outsource the right jobs you are free to invest your efforts into activities that will boost your bottom line.
There is a balance to be struck, which is why it’s worth taking a little more time to apply PLCS as you wouldn’t want to outsource. However, most companies could benefit from outsourcing IT or PR and marketing.
Why waste hours trying to fix computer issues that most managed services could sort out in minutes or would have nipped in the bud before you noticed it? If you value your time as highly as much as you should, the cost of a small dedicated service would be less than you’d lose doing it yourself.
Outsourcing pros and cons
Effective business outsourcing can positively impact on profits as you have more time to focus on core activities. Sometimes the outsourced work, being done by professionals, can actually be cost neutral or a money maker. Take PR and accounting, for example – the celery of the outsourcing world. Celery is one of those foods you burn more calories eating than it actually contains (so it’s a great weight loss food if you don’t load it up with pulled pork and cheese to take away that bland-kill-me-now-this-is-awful celery taste), and PR can actually help generate more income than the initial outsourcing costs. Good accounting can also be a cost neutral expenditure, too, in the right circumstances.
Sometimes you just need to bite the bullet and realise you’re a super business person not a super human and there’s only so much you can realistically do yourself. Think about how much not outsourcing work saves you. Are you confident it’s significantly more than you’d make if you concentrated those efforts on core tasks? Is even just a modest saving worth all the extra hours you’re putting in?
Instead of spreading yourself too thin you could be connecting with customers and growing your business. The knock-on implications of biting off more than you can chew starts with hits to your reputation as your quality drops or you aren’t dealing with customers quickly enough.
Something as simple as being tardy with a refund can force negative messages into the market. Feelings follow feelings, good or bad, and you want your customers to be talking about you in a good way.
Ask yourself “Do I expect others to use my business?” and the answer is, of course you do. You’re clearly good at what you do and expect to be providing services to others who can’t emulate you. You have to live by that too — if someone else can do it faster and better then you should know how to outsource tasks to them and get back to doing what you’re great at and growing your business.
Applied properly, with consideration, outsourcing work could completely transform your business.
Outsourcing isn’t for failures. Business outsourcing is for winners.
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