6 Questions To Ask Yourself When Deciding To Outsource

 

Building or scaling a business is a task that often requires lots of work, and lots of time. Part of building a business is finding ways to grow. Whether it be the personnel you employ, the contractors you have, or the infrastructure you’ve built, growing a business encompasses all of these things.

Part of scaling a business is  deciding when to outsource and when to delegate work to others. With this comes lots of questions and areas to think about: which tasks to outsource, which you feel comfortable outsourcing, what you can afford to outsource, and how will it enable you to grow or scale faster.

Can Another Person Do This Task?

When it comes to outsourcing, the tasks you are considering are an important element of the equation. Certain tasks you might not be able to outsource based on the skills you might possess and the training or experience you might have. Each task  has its own decision, independent of others. Meaning, one task you might need to do, while others you can find another person to complete them.

Thinking through what’s required to complete XYZ tasks, along with the type of information and experiences a person may need to have, is part of figuring out if another person can do this task. If the task in question doesn’t require a particular skill set, knowledge, experience, or information, then it might be a task that you can outsource.

Can You Afford It?

When outsourcing work to other contractors, employees, assistants, or people, you must consider the financial component that comes with it. You are effectively hiring another person or software to complete tasks you currently complete. Tasks that are basic in nature will cost less to outsource than a task requiring a highly skilled type of person, like a software engineer.

Analyzing the financial state your company is in, the type of resources you have available, how your corporate finances look, and the type of income on the way  is important to determining if you can afford to outsource. If you’re light on cash, with few income opportunities, then it’s going to be tough to consider outsourcing tasks. If you’re flush with cash, have an abundance of it, or have a strong and steady stream of income coming in, then outsourcing is a real possibility for you.

The next part of the outsourcing equation is figuring out how much a task will cost by reaching out to people that can either provide the outsourcing or have experience outsourcing similar tasks. Based on the frequency of the task, the time it’ll take to complete, and the specialization, you’ll be able to get an idea of how much you’ll have to spend to figure out if it’s worth it for you to outsource the tasks, or if it pays to continue completing them on your own.

Will This Help Me Scale? Will It Enable More Results & Productivity?

Outsourcing often enables companies to grow and scale. Certain tasks, while important to a business’s success, are incredibly time consuming. Outsourcing allows someone else to complete those tasks and frees you up to invest your time on tasks that might be more important, or tasks that only you can complete. Whether you’re utilizing your own financial resources or private equity vs venture capital, if you can utilize the freed up time to find more ways to grow your business, how to scale it, or how to generate more revenue, outsourcing might be worth analyzing.

What Will The Effects & Results Of Outsourcing Be?

The effects of outsourcing are different for each team, company, and person. Certain decisions to outsource can increase productivity, maintain the level of results, or enhance the effectiveness at a company. Right now you or another person in your organization may be completing a certain task that is fueling the company to grow. Those results may be incredibly important and vital to the organizations success., But another person might have an onboarding process or a different time it takes for them to produce similar results. Evaluating what the change in results or production will be, and how it will affect the company is important to consider.

There are a few different ways you can navigate this type of risk.

You can:

1) try outsourcing while you’re still working and producing results on the same task to maintain the results you’ve been generating;

2)  outsource for a trial period or a specified amount of time to see how it goes;

3) allocate a certain amount of capital you’re willing to invest to see how the outsourcing goes, and then decide; or

4) invest more into training the people you’re thinking about outsourcing to so they can better understand what you’re looking for.

What Will The Onboarding Process Be Like?

Leading to our next point, with new employees, new hires, new contractors, or new assistants, there is typically an onboarding process to get them producing the type of results or work you’re looking for. That means walking them through, step by step, what you’re looking to have them to do, any information or data they might need in order to complete each task, and the type operational framework behind each task. While the tasks you are considering may seem simple or trivial to you, to someone completely new who doesn’t have the experience you have, there may be a learning curve to fully onboard and complete the task for the company.

As the business owner, or the person outsourcing the task, it’s important to keep onboarding time and cost in mind. It might take a few days, weeks, or months for the person completing the task you’re outsourcing to be producing at the level you’re looking for.

How Do You Plan To Outsource?

Part of outsourcing a task depends on the assignment type, the duration you’re looking to outsource for, and the type of skillset you’re looking for. Certain software’s offer you the opportunity to automate tasks. Contractors are people who work for you completing one task or a specific assignment.  Assistants are people who work in a wide variety of tasks, completing whatever ad hoc tasks you need completed. Employees come with a different set of rules, regulations, and laws that are hired to work for your company and complete work in a particular capacity. Each one comes with a different blend of positives and negatives. Depending on the type of software available, the type of experience you have with contractors or assistants, and the productivity or results you’re looking for, the best way to outsource will vary.

Conclusion

Outsourcing is something companies consider when deciding how to scale their business, or to find different ways to grow. Outsourcing allows companies to continue generating results from a particular task and frees up time to invest or spend elsewhere. Certain tasks only the founder or business owner can complete while others can be outsourced to others to complete. Building off that, with the decision to outsource, comes a financial component, considering the skills someone might need and the duration of the outsourcing.

Each outsourced task will come with different levels of productivity, results, and affect the company in different ways. With new employees, assistants, or contractors, there is an onboarding process where they need to learn how to complete each task, what you want them to do, and the type of results you’re looking for them to produce. The way you choose to outsource (whether it’s an assistant, a contractor, or an employee) depends on the type of task you’re looking to outsource, its responsibilities, the duration of the project, and the frequency associated with it. All in all, when it comes to outsourcing a potential task, a potential project, or a potential element of your business, it’s important to consider, analyze, and evaluate a variety of different questions before you move forward.

Howard

Howie Bick is the founder of The Analyst Handbook. The Analyst Handbook is a collection of 16 guides created to help current and aspiring Analysts advance their careers. Prior to founding The Analyst Handbook, Howie was a financial analyst.

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