While many employees spend their free time daydreaming of becoming financially independent, the entrepreneur is working to make the dream a reality. That is why entrepreneurs are risk-takers by nature.
Entrepreneurs are willing to take that all-important first step of breaking free from the chains of the 9-to-5 grind and take command of their of their own destiny. Instead of driving someone else’s business, they go behind the wheel and follow the course they have charted for their own business success.
Yet, sometimes these very same attributes – ambition, drive, and dedication – can become an entrepreneur’s own worst enemies.
They end up taking on too many tasks most of which are administrative in nature. As a result, a big chunk of their waking hours are spent – rather, wasted – attending to functions that have no direct contribution to their bottom line.
The workday becomes unproductive. The essential tasks or the core functions of the business are left unattended. Goals are not met. Business targets become farther away today compared to yesterday.
By taking on non-essential tasks, the entrepreneur ends up working for his/her business instead of on his/her business. Ironically, the entrepreneur has become an employee of his/her own business.
Is there a way or a process the entrepreneur can use so he/she can focus on the main functions of the business without overlooking the administrative tasks?
The Solution: Outsource Tasks And/Or Services!
Ask yourself these questions:
- Would you rather spend 2 hours filtering your Inbox or working on a client’s project?
- Would you like it if your phone keeps ringing every 30 minutes while you are working on your client’s project?
- Would it be okay with you if the Internet provider cut its service because you unwittingly forgot to pay the latest invoice?
If you answered “No” to these questions, it is time for you to consider outsourcing tasks of your business.
Outsourcing is the process of delegating or transferring predetermined tasks or functions to a third-party service provider.
You can read more about the benefits of outsourcing in our article “How Outsourcing Tasks Can Save You Tons Of Money – And Build Your Business”. In the article, we presented an accounting of how much money you can save through outsourcing.
Essentially, outsourcing is the ideal strategy for entrepreneurs, especially those in the start-up stage, because it is a low-cost, high-value solution. From the article, you will come to understand that with outsourcing, costs are easily managed.
Outsourcing will present you with options that you can use to stretch your finances without compromising the quality of goods and services.
FTE Vs. Outsourced Talent: Which Is The Better Option?
Cost savings are possible because you are taking advantage of comparative advantages that are generated by outsourcing foremost of which is labor.
With outsourcing, you are not hiring full-time employees or FTEs. Instead, you are contracting the services of qualified people or agencies. This distinction between FTE and contracted services is very important!
Let’s compare the FTE and the outsourced talent:
| Particulars: | FTE: | Outsourced Talent: |
| Rate/Hour (Minimum) | $18 | $8 |
| Work Hours/Day | 8 | Flexible |
| Work Days/Week | 5 to 6 | Flexible |
| Paid Benefits: | Yes | No |
| Total Cost: | $27/hour | $8 |
As you can see, flexibility is the key differentiator between an outsourced talent and an FTE. When you contract services, you are not obligated by law to pay a minimum wage or designate the mandated work hours per week.
This makes it possible to be more financially flexible with the outsourced talent compared to hiring an FTE.
Here are some real-world examples:
- Contract the services of a virtual assistant who can manage your administrative tasks 10 hours a week.
- Outsource content writing services and pay the outsourced talent on a per word or per productive hour basis.
- Outsource web development/management services to Mountaintop Web Design and pay fixed charges on a monthly basis.
By agreeing on the conditions for payment, you are assured of higher productivity and better quality of work.
According to a study that was presented by productivity coach Steve Pavlina, the average American office worker only puts in 90 minutes of productive work every day.
That is 90 minutes out of 480 total work minutes every day or a productivity rating of only 19%! Yet, America remains the strongest economy in the world.
What happened to the remaining 390 minutes? According to Pavlina, those hours are spent surfing the Internet, taking extended water cooler/coffee breaks, napping, checking their cell phones, and reading the news.
Guess what? Those hours are paid. This means every time an FTE chit-chats with a another FTE about the latest Netflix movie, you are paying for those minutes.
By outsourcing, you are also increasing your level of productivity because now you can place greater focus on the main enterprise of your business.
A study presented by the Harvard Business Review showed that at most, people can only maintain 100% focus on a given task for 90 minutes. After completing the task, you have to rest the mind for at least 10 minutes.
Assuming an 8-hour work schedule, this means that by outsourcing tasks, you can target 4 to 5 tasks to accomplish every day. That is 360 minutes out of 480 minutes per day or a productivity rating of 75%!
In contrast, a fully-paid FTE who can tender only 90 minutes of productive time per day will possibly only accomplish 1 task per day.
Which Tasks Should You Outsource?
Hopefully, at this point, we have convinced you of how outsourcing can build your business. The question we will answer in this section is which tasks you should outsource.
In the future, we will present a more detailed and comprehensive article on how to take a strategic approach to outsourcing that can scale up your business. For now, we will show you how to identify the tasks that you should outsource in order to streamline costs and increase productivity.
You will need to answer these questions:
- Which tasks are non-essential or not directly related to my business’ main enterprise?
- Which tasks will require a higher level of expertise and greater experience?
- Which tasks are repetitive in nature?
- Which tasks do I have the tendency to overlook or forget?
- Which tasks do I greatly dislike doing?
From there, you will probably come up with the same or similar tasks that we have outlined below:
1. Administrative Tasks
For many entrepreneurs, administrative tasks are the necessary evils of running a business. These tasks are categorized as non-essentials, meaning they are not directly related to your business’ main enterprise. However, they play an essential role because administrative tasks keep your business organized and running.
Examples of administrative tasks that you should outsource:
- E-mail Filtering
- Calendar Management
- Appointment Setting
- Phone Handling
- Preparing Reports
- Limited Research
- Database or CRM Management
- Bookings and Reservations
- Preparation of Limited Communication
2. Technical/Specialized Skills
Your business may need to introduce new products and services that require greater skill, a higher level of expertise, and longer tenure. These are skills that you cannot become proficient at simply by watching YouTube videos or reading a “For Dummies” instructional. Otherwise, the quality of work will suffer.
Examples of technical/specialized skills that you should outsource:
- Website Design/Management
- Digital Marketing
- Search Engine Optimization
- Search Engine Marketing
- Content Writing
- Graphic Design
- Software App Development
- Transcription Services
3. Customer Support Services
Many businesses stunt their growth because they are only focused on new market development. In so doing, they neglect their current market base or end users of their products or services.
Don’t forget your current end users. They are already your customers. The cost of maintaining them is lower than creating new markets for your products and services. And the returns are much higher because your current end users already made the decision to choose you over the competition.
Having great customer service assures your existing end users that their needs and concerns are always met and addressed right away.
Examples of Customer Support Services that you should outsource:
- Inbound Phone Support
- Technical Support Services
- Email Support
- After-Sales Surveys or Outbound Call Support
- Chat Support
- Content Moderation Services
4. Back-Office Functions
It’s called the back-office because the people who work here are not seen but otherwise play a valuable role in running your business. You can outsource these tasks to qualified third-party service providers and still get great results.
Examples of back-office functions that you should outsource:
- General Accounting
- Payroll Preparation
- Employee Benefits Administration
- Human Resources Management – Recruitment, interviews, testing, evaluation, and selection
Conclusion
To better understand the value of outsourcing, let’s delve into the mind of the entrepreneur.
Entrepreneurs or to be more specific, small to medium scale business owners, are limited by their resources. Even the most successful ones do not have the benefit of liquidity compared to large scale businesses. This is, of course, part of the growth process.
As a small business owner, the immediate challenge is to maintain liquidity before achieving profitability. Effective cash flow management is very important. Thus, an entrepreneur strives to keep operations as lean as possible.
Instead of hiring employees to help him/her run the show, they take on most, if not all of the tasks of the business.
Ask any entrepreneur and they will tell there is nothing they can’t do. Like a superhero, an entrepreneur will take on any challenge and believe they can win it. The reality is, victories are only short-term.
Over the long-run, the number of unproductive workdays has accumulated to a point that the business starts to suffer.
Your best option is to outsource specific tasks or functions. Not only will outsourcing services greatly reduce the costs of running a business but the strategy will help you increase productivity without compromising the quality of work.
If you enjoyed this article and know people who would greatly benefit from it, please feel free to share!
And if you would like to know how Mountaintop can help you get started on your own outsourcing solution, please do not hesitate to give us a call. You can consult with us for 30 minutes free of charge.
