When to Outsource Your Business – Signs to Look Out For

Cody McLain


A company that's properly outsourced is the closest to the ideal of automation as you can get, here are tips to get you ready to outsource your business. Automation, which...

A company that’s properly outsourced is the closest to the ideal of automation as you can get, here are tips to get you ready to outsource your business.

Automation, which is the end-goal of outsourcing, looks a little bit like this:

You, as the owner of the business, might wake up on any given Monday and check your emails for a maximum of 1 hour after spending the morning in the hotel dining hall, enjoying breakfast.

Your virtual assistant from the Philippines may have done a full 2-day’s worth of research on your behalf and had sent you a Google spreadsheet with the data. You want to increase your team to include some business processes that your VA can’t do all by themselves. They’ve got a few suggestions for you and are setting up meetings.

In another email folder, your VA has been hard at work coordinating fulfillment with your account manager in Austin, Texas. They’ve resolved issues that may have arisen with shipping to South Korea and Botswana, and now your fulfillment manager is sorting out your state tax, sales tax and helping you file. A quick glance at an email notification from your bank confirms that Sid and the team at your credit card processor deposited, even more, cash this month

You close your mail and RSVP to said meetings. You’ll  be Skyping with various Business Process Outsourcing companies based in the Philippines. Now you’re back in your hotel room getting ready for a meeting with an investor that likes your business idea. You want to scale your business, the funds will soon be available after all, and you’re still not having to be chained to your desk.

Automating your business through outsourcing has literally changed how you do business.

Getting your own Virtual Assistant was the departure point between the old you that believed that “things only work when you do them yourself,” and the new you that knows that you can give others orders and be the boss instead of being bossed around. Having a VA trains you to handle remote management like a boss!

Being the boss, in the wise words of Tim Ferriss,

“Isn’t time-consuming. It’s low-cost and it’s low-risk.”

Handing things over to your VA is an acid-ratio test for entrepreneurship. If you can handle another person taking things off your hands is a litmus test for you directly managing (and sometimes chastising) other people.

What exactly are the criteria for knowing that your organization is ready to be outsourced?

1. Are you prepared to eliminate the minutiae of your life and let someone else replace you?

That’s essentially what outsourcing is; Productive Replacement.

If you find yourself overwhelmed by the amount of work that you need to get done in an average work-day, would like to raise additional funding for your business and cannot, or are still in the throes of working for someone else, you simply cannot build a company that way.

2. You must be ready to kick your business’ earnings into the next gear

If your business is making money and growing steadily, you have to be aware that those earnings will eventually peak and then nosedive. That’s the business cycle. When you outsource, you take advantage of time zones and currency exchanges (this phenomenon is referred to as geographic arbitrage) in order to scale your business. Outsourcing enables you to essentially prolong your revenue increases.

Here’s the key to outsourcing:

Just because something is cheaply done by you, doesn’t necessarily mean that you would want to do it. If you value your time, it’ll stand to reason for you that it makes more sense doing the tasks that are worth $100 per hour, than those worth $10 to $15 an hour. The former is what separates a profitable company from one stuck in a lower gear. $10 to $15 per hour is how much the average VA earns, so why would you inundate yourself with that minutiae?

What if you’re working a 9 to 5 and are noticing that your business is growing faster than you can handle? Could you outsource both your business processes as well as the tasks that are handed down to you by your boss?

Yes. A resounding yes!

If you’re not outsourcing essential tasks that are non-sensitive, there’s no reason why anyone else (besides your credit card company) should know. Assigning personal tasks is much easier in the beginning, but to truly free up time, wouldn’t it be nice to show up to the office knowing that you’re going to be solution implementing, instead of problem-solving?

If you’re ready to get outsourced, then you’re in the right place, but you need to know this before jumping into the deep end.

Cessation and Delegation

In legal terms, cessation means to transfer your rights to a third party and delegation means to transfer your responsibilities to a third party.

A lot of outsourcing enthusiasts love talking about delegation. They call it a step in the right direction on the journey of task reduction and automation. One thing that these individuals don’t do is, however, realize that they cannot have task delegation without cessation.

Whenever you let your team know what you need them to do, be aware that you’re no longer able to work on that task. You have to let it completely go because you have transferred the rights to someone else. Those rights will only be transferred back to you once the work is complete and the third party receives compensation.

Therefore, you have to be willing to create a system that lets you know exactly what you will be delegating. Your money is on the line, so you need to get clear about what you’re going to get someone do on your behalf.

Tip 1: Eliminate before anything else

To avoid wasting precious time and resources, consider which tasks are the most profitable to do yourself, the most profitable to give to someone else and which tasks can be completely eliminated.  Wasting your outsourced team’s time will only end up wasting your money.

For example, A lot of first-time outsourcers say, “Oh, I get my VA to read all my emails, filter and then forward them to me when I need to respond, but there’s AI for that!” If your mail service provider is Gmail, for instance, and you select any message that you no longer want to receive, Gmail gives you the option to filter similar messages so that you no longer receive them. Email clutter automatically eliminated! For the other stuff, there are autoresponders with FAQs for potential customers and automatic mail forwarding to teams that you’re outsourcing.

Commit this adage to memory: In the world of outsourcing, elimination is better than automation.

Another ineffective use of outsourcing, that a lot of entrepreneurs seem to fall victim to, is delegating silly tasks to their outsourced team. Things like “setting up meetings”. You can eliminate that easily with apps. Better yet, you can completely eliminate the need for meetings entirely by having weekly email round-ups with your team.

If you can see yourself following and refining your these rules as you apply them to your company, you’re definitely ready to get outsourced.

Remember: The key is to create your own rules on how you want your organization to run, and how it can actually run, before adding a team.