How to Increase Profits By Outsourcing

Cody McLain


Increasing your profits through outsourcing often elicits imagery of cost-cutting and poor quality work, but it’s nothing short of simply increasing your profits by taking advantage of geographic...

Increasing your profits through outsourcing often elicits imagery of cost-cutting and poor quality work, but it’s nothing short of simply increasing your profits by taking advantage of geographic arbitrage. Literally, taking advantage of timezones and currency differences!

When entrepreneurs initially stumble on the concept of “geographic arbitration” they mistakenly believe that it means packing all their bags and leaving city life in favor of somewhere less expensive like Thailand or Mauritius, and sometimes, somewhere less developed like India.

While those are beautiful destinations in their own way, anyone that appreciates where they live and doesn’t want to sacrifice it in order to live well, will probably not be attracted to this archaic idea of taking advantage of geographic arbitrage.

What if there was a way to earn in dollars and spend in a smaller currency?

There is. It’s called Automation.

“Automation…” you think to yourself.

Everyone has an idea about what it means, and a lot of these ideas are contradictory, so who should you believe?

Another school of thought relates automation to better managing humans, which isn’t what we’re referring to. The automation which takes advantage geographic arbitrage is about setting up systems, and not so much about people. Tim Ferriss refers to this as “self-correcting business architecture“.

Just like when Wayne Huizenga copied Mickey D’s organizational chart, when architecture is designed correctly, it will take the founder completely out of the management equation, with intervention only necessary in order to set a new precedent.

Automation then means to create a business that doesn’t bother us.

If your mobile phone is constantly pinging you with new tasks that need to be completed and interruptions including the various minutiae that makes up a lot of entrepreneurs’ daily lives, then you are the perfect candidate for this sort of automation.

We’ll start with the basics…

Profitable Outsourcing: Get Out of The Way

Individuals into New Age religions often talk about, “getting out of your own way,” and this is somewhat similar.

Profitable outsourcing, aka Automation, means designing your organization so that you had no emails or phone calls to answer. It doesn’t have to be a large organization, either.

Through a small team of three virtual assistants, one assistant to act as their leader, and the other two being the backup, you’ll surprise yourself at how well your business can run without you.

Make a simple FAQ (if this, then that) type of document for the onboarding of your team and then allow your second-in-command to be responsible for onboarding the next team member.

You should only give your input when something unprecedented happens. Once you’ve found a solution for that instance, it goes into the handbook and you’re once again removed from the cogs.

Check in with your team once a day, for no more than 3 hours and the rest of your day belongs to you. You can do whatever you want with this time; start a new business, hire a ghostwriter and write a book, participate in a MOOC, etc or travel.

This isn’t an overly simplistic way of looking at things.

Here’s a breakdown.

RULE 1: Specialists are your savior

Amateurs contract outsourcing from one-stop-shops and then wonder why things go belly-up. When outsourcing, in order to take advantage of geographic arbitrage, contract work from outsourcing companies that specialize. That means that whenever a contractor leaves or doesn’t perform up to your standards, you are able to replace them without shuttering your business.

Trained groups of people are easier to onboard and can manage themselves, plus you can replace them as and when you need to do so.

RULE 2: No contractor is an island

Besides being able to communicate with you, ensure that all your contractors that you’ve outsourced are able to communicate amongst themselves, in order to solve certain problems.

No this will not result in a coup or uprising. You can limit the permissions you give them, and decisions that require expenditure should be made with your permission.

If you’re serious about becoming profitable through automation, you need to remove yourself from the equation and replace yourself with tools and infrastructure. This is the only way to scale your business. Scaling, in the broad sense, means increasing revenues without a disproportionate increase in expenses.

RULE 3: Use your team wisely

Limit which contractors are responsible for certain tasks, i.e. order fulfillment and email responses. Based on the FAQ answers you’ve put together before hiring your team, email answers should largely be copy-paste and be quick.

RULE 4: Give yourself the experience that your customer would have

Don’t just blindly start paying your service providers and hope that they’ll do right by you.

Get a list of 800 numbers that they already have for their current clients and then use those numbers to test their fulfillment time. Call each of those numbers three times a day.

Once in the morning, again in the afternoon and finally in the evening. If the wait time is longer than 15 seconds, or the phone rings more than four times, don’t waste your time!

As with any system, this method of taking advantage of geographic arbitrage can be applied no matter which industry you are in.

Automation has already been put to the test by some of the biggest organizations in the world. Now, it’s possible for you to take advantage of the trail that they’ve blazed before you even start your business.

Be smart and start increasing your profits using outsourcing, today.