Should you outsource? 5 questions to answer first

Ever considered outsourcing? It's a subject I've spoken to many clients and workshop students about at length. 

For most small businesses, there will come a time when the cost of doing something you're not familiar with, or that seems overly tedious, outweighs the cost of paying someone else to do it. 

Yet, regardless of a potential cost benefit, for most of us there's also a bit of an internal struggle as the fear of giving up total control over the business can be difficult. 

So, how do you know when you need to outsource and what can you expect from the process? I've done a fair bit of research around this subject for clients and also, more recently, for my own business. Here's five questions I think every small biz owner should confidently answer well before signing off on any outside help. 

1. How much is your time worth? 

This is the most important thing to figure out and one many of us never set aside time to do.

Say, you earn $200,000 per year and you work around 40 hours a week. That means your hourly rate (before tax and any other payments) is approx. $96 ($200,000 / 2080).

If you are spending six hours a week on admin tasks such as submitting repeat invoices, scheduling social media and other tasks, you are, in effect, costing the business $576. 

Oh gosh, you say, I should totally be outsourcing this! Slow your roll my friend, it's not always that simple.

Now, consider whether you're learning anything while doing these tasks. If you are, how much is this knowledge worth? 

For some business owners spending time to understand how a scheduling tool like Hootsuite or an analytics platform like Google Analytics can help their business is a long-term investment. Review the pros and cons of any tasks you could outsource against what your time is worth. 

2. What exactly do you need someone to do? 

The next step is to work out the tasks you would want to outsource.

Are they weekly, daily, monthly or a mix of all three? Are the tasks all set up and ready to go, or do you need to invest some time in creating process documents, tutorial videos, password lists or manuals to assist the person you outsource to?

Often, this can be another time vacuum biz owners haven't accounted for. Perhaps you set aside time for the next three months to get the process documents in an easily digestible format before outsourcing.

Understand which tasks you will outsource and create all the necessary items to ensure someone outside the business can easily pick these up and roll with them (costing you less time and money in the long-run). 

3. Are your timelines realistic? 

What we expect of ourselves within the space of an hour or two can be vastly different to what we expect of someone else (especially when you're paying them!).  

Ask yourself how quickly you expect someone external to complete the tasks you have set. Are you being realistic with these time frames? What are you basing these on? Have you accounted any time for this person to understand the basics of your business?

Map out a simple spectrum/axis marking one end "slow" and one end "fast". Now mark a rough time frame against each side (i.e. 4 hours) and question how much of the spectrum you would be willing to accept. At what point does outsourcing become too great a cost to you? 

4. What's your budget? 

How much are you willing to spend paying someone else to help you?

Take the first example above (six hours of admin at $96 per hour). If you're costing the business $576, you may decide you can afford half of this per week ($288) to pay someone else. Then look at your tasks and timelines.

Given most Virtual Assistants (VAs) or basic admin resources will cost anywhere from $25 - $75 per hour (in Australia, at least) are you allocating enough money to get all the tasks done in the time period you want?

Figure out a budget you can afford and that suits the needs (tasks and time) you have identified for your business. (It's during this step that you may well identify you're not ready, just yet, to outsource tasks.) 

5. How will I measure success? 

I've heard that many horror stories about people losing money when outsourcing.

Usually the biggest issue is that there was never any sort of KPI or success metric put in place by the business owner prior to hiring someone.

Review the list of tasks you have come up. How will you measure success? Will it be that all work was completed on time and budget? Will it be that someone else is taking on the creative brainstorming and their ideas are consistently fantastic? Will their work result in quicker payments or greater traffic to your website?

Whatever your tasks, ensure each has a clearly defined metric for success attached and discuss this with anyone you bring on. It will make life easier for all parties. 

Outsourcing can be a brilliant move for small business owners, allowing you more time to work ON the business (rather than just IN it). But, choose wisely, as not all VAs or external admin are made equal. Ask for referrals (and actually check them!) and don't be afraid to set a trial month or trial tasks to ensure they meet your requirements. 

Now that you’ve answered these questions, do you need to find a VA? Consider advertising in your local FB business page, FB business groups or even on your local kinder or primary school noticeboard (if allowed). I've found some brilliant VAs for clients who are highly skilled parents looking for flexible / casual work they can do remotely while raising young families / on maternity leave. 

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Fiona Killackey