Outsourcing is one of the wisest business decisions you may ever make. It helps you complete projects and tasks that don’t affect your primary income. So for example, if you’re a service provider your primary income comes from the service you provide, your time with your clients. Tasks like invoicing and product creation while they are important and do affect your bottom line, they don’t have a direct effect on your profits.
Here are five steps to outsource successfully.
Step #1 Determine your hourly value. For example, if you work 40 hours per week and your annual net profits are 50,000. Then you’re making about $24/hour assuming you work 52 weeks a year. The calculation is profits divided by number of hours worked. You can use the same equation for annual net profits divided by annual hours worked or weekly/monthly profits divided by hours worked each week or month. Knowing this figure will help you determine what tasks make sense to outsource. If it costs you more to outsource than your hourly value then it may be a task you continue doing yourself.
Step #2 List items you want to outsource and determine if it’s worth the expense. Look at the most time consuming tasks as ideal candidates for outsourcing.
Step #3. Find and interview candidates for the task. A great place to start is with the people you know and respect. Do any clients or associates know someone who might be interested in the job? You’re outsourcing so you’re not responsible for taxes or benefits. Compare rates, experience, and references.
Step #4. Once you have a candidate in mind, sign a contract with them outlining the expectations, rates, and privacy terms. You may also want to consider hiring them on a trial basis just to make sure the person and your established systems work for both of you.
Step #5 Follow through. Once you have outsourced a task or two, take some time to evaluate the process. Is it as productive and efficient as it can be? Is the contractor the right person for the job?
Finally, make sure you’re using your new found free time productively. If your outsourcing goal is to make more money, then the time you now have available should be spent on those profitable tasks. If your goal was to work a little less and play a little more then make sure you’re using your free time to have fun.
Your point 1 is actually quite debatable! You have a certain hourly rate because you do not outsource tasks and if you were able to get out of the daily rut and focus on strategy or knowledge building to do more advanced tasks then you can actually start earning more per hour (it may be the lack of outsourcing that’s holding you back). You really need to do a more in depth evaluation and judge if outsourcing can help you improve your hourly revenue – if the answer is yes then outsourcing at the same rate as what you are earning right now may actually make sense!