When To Outsource - What Entrepreneurs Don’t Need to Learn to Succeed
There are many types of entrepreneurs: the serial entrepreneur, the first-time entrepreneur, the entrepreneur with a business degree, and the entrepreneur with zero business acumen. Regardless of which type you are, it’s impossible to master and manage every business function on your own. If you’re planning on succeeding in business, you’ll need to pick your battles carefully.
Luckily, small business owners don’t have to run a business solo (even if they’re solopreneurs). Through a mix of outsourcing partners and automation tools, modern entrepreneurs are well equipped to choose what they can and should work on versus what work to send elsewhere. Now, the most difficult part is relinquishing control and knowing when to send work out to an expert.
What is outsourcing?
Outsourcing is a common business practice, in which key business functions are given to a partner outside of the company to manage as opposed to managed in-house. This is a particularly common practice for companies that are very new or very small and do not have the capacity to hire an employee to complete the work. By utilizing outside resources, small businesses free themselves of typical obligations to employees (such as benefits) and might end up paying less in fees than they would in wages.
This is also a common practice for projects or work that is either one-off or irregular. For example, you would never hire a new employee to create business cards for you. Instead, this is a perfect task for a freelancer. Seasonal tasks, like taxes, are also good candidates for outsourcing, since the employee you would hire in-house would only have a temporary workload. Similarly, the return on learning these tasks yourself is low, since their repetition is so infrequent that you may have to re-teach yourself every time.
Commonly outsourced business functions
Most business functions can be outsourced, since the true value of a small business owner is more conceptual and visionary. However, there are functions that are more commonly outsourced than others:
If you’re not design-oriented, it may be difficult to develop the keen eye needed when creating your company’s brand and marketing collateral. Instead, you can work with a firm that specializes in branding and marketing materials for your specific market, or with a freelancer that will be able to translate your vision into a beautiful design.
Don’t confuse design and marketing. When you receive the deliverables from your design partner or finish creating them in-house, you’ll still need to send these out to the world. Advertising and social media are two examples. If you haven’t been previously exposed to marketing trends or are unsure of where to start, you can work with a partner to develop a strategy or have the partner fully execute you marketing campaigns for you.
Website Design & Development
Too many entrepreneurs waste their time teaching themselves the basics of web design and development. Unless this is an area where you have prior experience or a task you particularly enjoy, outsource your website design and development to a team that can quickly and easily produce work that would cost more in your time that it does in their fees.
Given how crucial clean records and financial analyses are to the management of a successful business, it’s surprising that more entrepreneurs don’t outsource this function. Your financial partners can take much of the workload off of the business owner and provide insights that you may not have the prior business experience to glean on your own.
Alternatives to outsourcing
Outsourcing isn’t always the best option for small business. In some cases, it can be a good idea to implement a tool, to hire for the task, or to learn the skill yourself.
When it’s a good idea to use technology
The advancement of small business technology in recent years has enabled entrepreneurs to keep more and more business functions in-house. It’s easy to find tools that automate your social media marketing, provide templates for your design, and even do your bookkeeping for you. When choosing whether to use technology for a particular business function, consider whether you have the expertise and time to double check that the tools are working. These tools are designed to make your life a little easier, but not take the work off of your plate completely. Will you still be able to keep up with the management of each of these tools, or do you need someone else on your side?
When it’s a good idea to hire someone
Hiring is a big decision, but can be a crucial step in scaling your company. If you’re considering hiring a team member to manage a business function, make sure that you are choosing the function that will unlock the next stage of your company. Marketing tends to be the business function that companies hire for first, since this is an ongoing and time-consuming effort. For tech companies, you may want to consider bringing a CTO in-house that can manage the ongoing projects from your multiple outsourced partners, while the founder focuses primarily on business development, sales, marketing, etc.
Regardless of which business function you hire for, make sure you’re aware of your goals for this role and how the individual will contribute to the next phase of your company.
When it’s a good idea to learn and manage the function in-house
Don’t try to learn about or master every business function. Instead, consider learning and managing the functions that you enjoy the most or have prior experience in. For all others, small business owners only need to learn enough to manage expectations with outsourced partners or employees.
How to hire an outsourcing partner
You may choose to work with a business services firm or with a freelancer on your outsourced business functions. Regardless of which you choose, there are several best practices to help you get the most out of the engagement.
- Know the scope of the work you expect before beginning your search.
- Ask friends and colleagues for referrals who have worked directly with the outsource partner before.
- Use well-known platforms like freelance sites or ratings and reviews platforms to learn about the partner’s prior experience.
- Review the partner’s portfolio of work to determine whether they have relevant experience.
- Be clear in your initial conversations about what you expect from the engagement.
- Set clear deadlines and document all expectations and deliverables.
- Never agree to a partnership until you are certain of their commitment and each party’s roles in the engagement.
- Have a contract that incorporates all the above so there can be no dispute about what was expected and when.
- Address issues with outsource partners as soon as they come up.