Welcome to the second in my two-part series about outsourcing. In Part One we learned about the different tasks you could consider outsourcing to an outside company or individual. Now we’re going to look at how to work out if it’s worth outsourcing.
There are three reasons why you might choose to outsource a task:
- You’re so busy, you don’t have time to perform the task effectively, or at all
- The task is not one of your specialities (OK: you’re not very good at it)
- It’s more costly in terms of time and income to do the job yourself than to pay someone else to do it
Let’s look at these in turn.
You’re too busy to do the task yourself
Your company’s doing so well that you’re flooded with orders and work, you’re making those widgets till they’re coming out of your ears … but your filing system’s a mess. Call someone in to sort out what you don’t have time to do. You’ll profit in terms of having good systems that can be run easily, and not wasting time sorting through a mess to find a vital piece of paperwork. Or you’re a journalist with too many deadlines and you haven’t got time to transcribe all your tapes – send them off to someone else!
You’re not very good at the task
Maybe you’re great at making widgets but you clam up on the phone when you’re making sales calls to get more clients. Or you create beautiful websites but panic when a client asks you to write or check content for them. Or you work with your hands, add up invoices in your head, but need to create some leaflets and are not sure of your spelling. This is when calling in an expert in their field will help you concentrate on building your expertise – and income – in your own field, and make sure you’re representing yourself as well as you can.
It would actually cost MORE to do it yourself
Remember that method of justifying buying an expensive coat by breaking it down into cost per wear (price of coat divided by number of times you’ll wear it. Now it costs 50p – hooray!)? Well this works a bit like that. Say I have a very simple tax return to do and it only takes half an hour. Say I charge my clients £20 per hour. Doing my tax return will cost me £10 in terms of lost potential revenue for that half hour (and I know it’s so simple that an accountant wouldn’t be able to get my tax any lower). I doubt I’ll be able to get an accountant to do this for £10. So it’s not worth me outsourcing it. But if I had a big complicated business, with VAT and all sorts of deductions, and it took me 10 hours to battle through it, then that £200 in lost potential revenue (plus any tax savings I’m missing by not being an expert) could probably pay for an accountant to do it properly. Similarly, if it’s going to take you 10 hours to type up a 1 hour interview tape that I could do for you for £45, it’s worth outsourcing to me and saving time and money.
In summary: if it’s more expensive to do it yourself, or you don’t have the time or skills to do it, consider outsourcing!