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Wearing all the hats while running your business can be a very costly mistake. Not only will this increase the likelihood of burning out, but most likely will end up costing you a lot of potential money and growth. To solve this problem, we can easily outsource certain areas of our business to other businesses that can not only perform the tasks better, but can do them quicker and at a lower cost. If that sounds interesting, then let's dive in!
Things to Consider
Before diving into areas we can actually easily outsource and how to outsource those areas, let's first consider certain things about outsourcing. These things are important to reflect upon in order not to make costly mistakes.
Understand What's Worth Your Time
First, understand what your personal time is worth. This is important. It's very easy, especially while starting, to try and do all the work yourself to save money. In reality, this is costing you a lot of money since your time is a valuable asset.
To do this, figure out your hourly rate. But wait! You're an entrepreneur now, so you no longer get paid by the hour... How exciting! So this is going to be an estimation. How much would the work you could accomplish in an hour generate in revenue? This is your personal hourly rate.
The first things to consider outsourcing are things that can be done for cheaper than it would cost you (in time) to perform the task. Once, you understand this you understand the value in outsourcing. Remember, one key distinguisher between an employee and an entrepreneur is an entrepreneur will trade money to earn time, rather than time to earn money.
Furthermore, note that outsourcing can have potential legality issues. This really is the case when dealing with customers private information. Regardless if the outsourced partner is to blame for leaking private information, your business will ultimately be the one held guilty, as the information first came through you. This leads us onto the next point of choosing your partnering company carefully.
Reputation of Partner Company
What's the secret on how to outsource effectively? Carefully consider companies to outsource with. The reputation of the partner company is very important. Oftentimes, you get what you pay for and very rarely is the cheapest option the best option. However, sometimes when starting out the cheapest option is the best option as it still allows you to focus on more big picture things.
Easily Outsourceable Functions
I've put together a short list here for ya containing functions of most businesses that are easy, and beneficial to outsource. These really are essential functions to any business, large or small, that oftentimes take a very specific skill that other companies have already honed in on and are willing to provide their services for you. Let this list get the creative juices flowing on how to outsource functions of your business to really bring it to the next level.
Accounting is one of the most common areas of a business to outsource. Why? Because it takes a lot of time and effort to learn, and there already plenty of companies out there that will handle it for you. Though, because I think having a basic grip on accounting is an extremely valuable skill, I would argue it's important to get the basics of accounting down first, and outsource once your small business starts to successfully grow. Check out this post to get a grip on the basics of accounting for a small business.
Marketing is another great skill to personally have. When your business begins taking off. Outsourcing this function can save you an immense amount of time, and money. Marketing is a lot of experimentation at the start. Why not leave all that experimentation in the hands of others who have already done it?
Are you not particularly tech savvy? Or even if you are how long does it take you? Keeping up with the technology of our day and age is a lot of work. Furthermore, when tech fails, troubleshooting the cause can cost you countless hours. These are the reasons IT is the most outsourced area of a business.
If you are running a small business that doesn't do much online stuff I wouldn't bother with this one. However, if you business has a lot of online customers, outsourcing the online customer service is a fantastic idea. Especially when it comes to the online realm, customer service can be overwhelming.
Consider outsourcing your online customer service. Whether this is replying to emails, or providing basic assistance, using an existing companies customer service help will save you immense time, and countless dollars. The caveat here is that customer service is a essential part to any successful business. Who you decide to outsource this to can greatly impact how your customers view your business. I would recommend only choosing the best of the best here, and only once your clientele gets too vast for you to handle.
Furthermore, on the production side of things, getting your products manufactured can be deemed as almost essential to outsource when starting up. Unless your business specializes in hand crafted goods, setting up a whole manufacturing facility is in most cases unrealistic. Not to mention exceptionally expensive. This is definitely something I would recommend outsourcing!
Lastly, though shipping may seem like an easy enough task to handle right now, as your business grows it can reach the point where handling shipping on your own is a massive time suck. If your shipping is not on point, you will end up having to limit the amount of orders you take simply because there is no way you can ship more. As exciting as it is to get to that point, it's something that needs to be properly dealt with. Instead of hiring employees to do the work consider outsourcing it to other companies or businesses that specialize in dropshipping.
Catch you on the flip,
P.S. If you are wanting to, or have ever wanted to start a business, but are lost on where to start, click here and check this out