Outsourcing is a term that’s sometimes associated with job losses because large corporations “export” jobs to countries with much lower labor costs than the US. But, those of us who run small and home businesses have a different perspective on outsourcing.
For us, outsourcing work is a beneficial strategy that lets us be more productive and, at the same time, provides income to other small businesses.
Benefits of Outsourcing
Outsourcing work to freelancers and other small businesses lets us pull together the resources to manage and grow our businesses when we need help on an occasional basis. It lets us handle temporary work overloads, reduce fixed costs, speed products to market, simplify distribution, provide more or better service to our customers and compete with our deeper-pocketed competitors.
Outsourcing work to other small companies let us hire people on an as-needed basis for tasks we’re not good at, or don’t like doing. Among the types of office tasks that are often outsourced are graphic design, website development, social media management, SEO, and writing copy for blogs or articles. But office work isn’t all that’s outsourced. Businesses of all types outsource work to other small businesses.
Outsourcing benefits small businesses in another way as well. Taking on the outsourced work of other companies is a good way to bring in business for your own specialty. In fact, in certain fields, such as home improvements, contractors will often outsource jobs to other contractors such as plumbers or electricians, or people to install flooring or cabinets.
RELATED: 24 Tasks to Outsource to Freelancers
As beneficial as outsourcing can be to small businesses, there are a lot of pitfalls. The biggest one is that responsibility for the finished work falls ultimately to the business that is hired to do the work. If the person or business you outsource part of a job to doesn’t do the work or does it poorly, the customer will blame you, not them. After all, it was you they hired. You are responsible for the finished work. If you’re outsourcing some of your own tasks (say, building a website for your business), shoddy or delayed work will interfere with your own goals.
How To Outsource Successfully
So, how do you proceed? What can you do to avoid the pitfalls and get good results when you outsource work? Here 21 things you need to do to get the best results when you outsource work to service providers, independent contractors or freelancers or consultants.
- Think through the scope of the project. Be specific. What needs to be done now. What could be put off to later? What might need to be put in place now to allow you to move on to the next phase of development?
- Identify the skills, experience and resources you’ll expect the contractor you hire to have to complete the project successfully.
- Know the results you want to achieve and be able to communicate them clearly to the business or person you retain to do the work. For instance, if you’re hiring someone to write an eBook to use as a lead magnet, be clear about how many words the eBook should be, what points you want covered in it, whether or not you need the text formatted, whether the writer will have to locate graphics to use in the eBook, and any other details that are important to the success of the project.
- Choose service providers with care. Evaluate them as carefully as you would an employee. Ask about their experience doing the specific type of work you want done. (Someone who can write a great eBook about email marketing may not have the expertise to write a giveaway on how to choose the right lawn care products. Ask for resumes, references, and examples of similar jobs they’ve completed.
- Be sure the people you outsource work to hold any required licenses or certifications for doing the work.
- Don’t let cost be the deciding factor. The service provider who charges the least may not be the best choice. They may not have the expertise or may take longer to complete the work (or do it less professionally) than a higher-priced seasoned pro.
- Use a formal statement of work for big projects you plan to subcontract out. For smaller tasks, clearly outline in writing what is expected of each contractor.
- Rely on contracts, not memory to be sure work is done as you expected.
- Understand how long it should take to complete the work. (Ask others in your industry if you’re not sure.) Then, set a realistic timetable for achieving results.
- Include the date the work should be completed in your contract. If the project involves multiple steps, include complete-by dates for each step of the project.
- Monitor performance and time–but don’t micromanage. Contractors don’t like micromanagement any more than employees do.
- Be open to suggestions from freelancers or independent contractors about better ways to get work done. They may see pitfalls or timesavers you don’t because they’ve done similar work for other customers in the past.
- Communicate frequently and politely with your contractors and service providers.
- Never “point fingers” or let anyone on your team do so either. If your website is running slow and your web programmer is blaming the data center and the data center people think it’s the web programmer, you’re the one who’s going to suffer unless they can communicate politely with each other to find the underlying problem.
- Insist on all service providers and vendors documenting their work. It’s your business. You’ve got to be able to run it whether any one contractor is involved or not.
- If you’re having original work created for you (writing, computer code, etc.), be sure your contract gives you all copyrights in the work. You need unrestricted license to use and modify work you’ve had done for you whether you continue to use the vendor or not.
- If you’re licensing a product or service from a third party (instead of having someone create it for you from scratch) be sure you understand all the terms of the license.
- Have your lawyer insert appropriate clauses in your contracts to protect you from any wrongdoing on the part of contractors you hire.
- Find multiple vendors or contractors for work you need done. You need to know your business can continue even if something happens to a service provider.
- Give vendors or contractors you’ve never worked with before small projects to start. Increase the difficulty and scope as you see they can handle the work to your satisfaction.
- Offer feedback and praise. Employees aren’t the only people who like to hear that you appreciate their efforts. Your contractors appreciate that kind of feedback too.