outsourcing

Think Like a Startup to Boost Your Finances

Damian Davila — Fri, 28 Jul 2017 09:00:05 +0000

From tech giants like Facebook, Dropbox, and Instagram, to retailers like Harry's, Warby Parker, and CartFresh, companies who found success as startups seem to be all the rage in business news. But don't take startups as a business fad — there are plenty of personal finances lessons that the average Jane and Joe can learn from them.

1. Focusing on too many things can kill your finances

Spreading your financial goals too thin can often do more harm than good. Successful startup founders often find that a service that does one thing really well works better than a service that tries to do many things.

Venture capitalist and PayPal co-founder Peter Thiel advises all budding entrepreneurs to think hard and pursue a single idea that nobody else is doing. In an article for The Wall Street Journal, Thiel asked entrepreneurs, "What valuable company is nobody building?" The answer to this question is harder than it looks.

Personal finance lesson

Keep things simple. Focus on the biggest issue affecting your finances. For example, hone in on paying back a 401(k) loan or eliminating high-interest credit card debt.

2. Forgetting that cash is still king

Startups famously burn through cash for "growth," believing they will land yet another round of capital the next time around. That plan cannot only backfire, but become the death sentence of some startups. An example of this is server chip designer Calxeda. Despite raising $131 million in four rounds of financing, executives had to shut down operations in 2013 and declared, "We simply ran out of money."

Personal finance lesson

Plan ahead and be ready for periods in which you won't get a constant paycheck. Even when receiving payment from your employer, sometimes paychecks can bounce! Pay yourself first out of every paycheck and build an emergency fund to cover your basic expenses for three to six months.

3. Preparing to be wrong

"Pivot" is among the top three terms most used by startup founders. And for good reason: There are countless stories of million-dollar ideas that flopped but were able to turn into much more profitable ones after a well-timed adjustment.

Take Payal Kadakia, for example, who first founded Classtivity (a self-described "OpenTable for fitness classes") with a pay-per-class model. About two years into operations, Kadakia's service wasn't seeing the user traction that she was seeking. So, she pivoted Classtivity into ClassPass, a monthly $99 subscription that lets users go to any class at any participating gym. Once a struggling startup, ClassPass is now a $470 million business.

Personal finance lesson

If the plan isn't working at all, it's time to change the plan. Consider these facts:

50 percent to 70 percent of college students change their majors at least once and most will change majors at least three times before graduation.
American workers stay on the same job for a median of 4.2 years, according to MarketWatch.
The average person changes jobs 10 to 15 times (with an average 12 job changes), according to data from the U.S. Bureau of Labor Statistics.

Change is inevitable, so welcome it and make the most out of it. It may very well improve your financial situation.

4. Outsourcing nonessential activities

"Spend your calories on things you do well and the things that make you and your business valuable — and outsource things that aren't core to that mission," Jeff Haynie, co-founder and CEO of Appcelerator, wrote for Recode. From accounting to employee meal planning, startups are well known for outsourcing as much as possible to keep overhead costs down.

To improve your overall productivity, Matt DeCelles, co-founder of sunglass retailer William Painter, recommends mapping out all tasks and determining which ones may be better completed by another person. By focusing on core operational activities, DeCelles is able to make the most out of his day. (See also: 11 Time Saving Hacks From the World's Busiest People)

Personal finance lesson

Remember complaining about how you never seem to have time to balance your checkbook, organize your tax deductions, or get an additional quote for a home or car loan? Spending money on "help" to complete these tasks can save you a couple hundred dollars in the long run.

If you think that you need to be a high roller to hire somebody, think again. Leverage gig economy sites such as Fiverr, Elance, ODesk, Fancy Hands, or Zirtual to post your tasks, find talented freelancers, or hire a virtual assistant for as little as $5 to $10 per hour, depending on the type of task.

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This article is from Damian Davila of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

4 Ways Outsourcing Chores Can Save You Time and Money

Carrie Smith — Wed, 26 Aug 2015 11:00:20 +0000

We're busy people, with lives filled by family, work, errands, chores, and tons of other tasks that pull us in a million directions. Add all of this on top of being a self-employed business owner, and there are times when I find myself sacrificing sleep, or skipping meals, as a way to get more things checked off my list.

Two years ago I quit my day job to freelance full-time and have been in time-crunch mode ever since. As a way to become more productive, I've learned how to outsource work I don't have time for, or don't know how to do.

What if you delegated household chores so you could regain control? Here's how to outsource your life so you have more time and money.

1. Avoid Grocery Shopping

Grocery shopping is one of my least favorite chores to do each week. Unless you're a personal chef (like my husband), you probably hate going to the grocery store, too. Instead of wasting your time on this chore, why not have your groceries delivered? If you live in a big city, check out services like Peapod or AmazonFresh's food service.

Just order your regular grocery items that you purchase every week, such as milk, bread, toilet paper, and other consumables, and get them delivered right to your door. No driving through traffic, or weaving in-and-out of the busy produce section.

The great thing about these services is that you can find the best prices, use coupons, and take advantage of weekly discounts, just as you would if you were going the traditional grocery shopping route.

Time saved per week: One hour or more (depending on how long you usually take to meal plan and drive to your local store).

Average monthly cost: Cost of groceries plus delivery and tip (plus $99 a year for Amazon Prime).

2. Look Stylish on a Budget

Retail therapy is a great way to unwind, score some fashionable finds, and hang out with friends, but it's not always great for your budget. Limit your regular shopping trips by outsourcing your clothing needs using services like Stitch Fix or ShoeDazzle.

A box is delivered straight to your front door that includes styles based on your personal taste. You only pay for the items you like and want to keep, otherwise you simply return any unworn clothing or shoes.

The upside is you get customized picks, from designers and professional stylists, without ever leaving the house. You'll also be able to avoid any impulse buys or unwanted purchases simply by choosing the bare essentials.

Time saved per week: One hour or more (depending on how long you usually shop).

Average monthly cost: $55 for clothing and shoes (plus $20 processing fee applied to purchase).

3. Get Help With Daily Errands

Odd jobs around the house constantly seem to stack up. From cleaning the car, to mowing the yard, to cleaning out the gutters, a resource like Task Rabbit can help. No task is too big or too small.

If you need a ride to the airport, furniture delivered on a certain day, help walking the dog, or deep housecleaning, you can use this service to find the right person. You can even pay someone to stand in line for you at the DMV! This service is currently available in 19 cities and counting, so save yourself time by outsourcing your daily errands.

Time saved per week: Two hours or more (depending on chore).

Average monthly cost: Cost of errand billed hourly.

4. Hire a Bookkeeper or Household Manager

As the breadwinner for my small family, I don't always have time to prepare reports, pay taxes, and manage the affairs of our household. If you're in the same position, you know the importance of these tasks, and how vital it is that the bills are paid on time, but you also want to spend your time with your family and friends.

One way to solve this is to hire a part-time bookkeeper or household manager. For $125 a month I work with a virtual bookkeeper who helps manage my bills, bank accounts, schedules appointments, and deals with other household projects. This allows me to spend my time at a yoga class, or going on a date with my husband.

Time saved per week: Two hours or more (depending on chore).

Average monthly cost: $100 or more depending on tasks.

You Really Can Save Time and Money With Outsourcing

Life's too short to spend a lot of time on doing household chores or trying to DIY tasks that are too complicated. Thanks to a rise in outsourcing services, you can delegate any kind of chore you don't have time to do. This will allow you time to do more important things, like spending quality time with your kids, or enjoying a weekend with friends.

Have you tried outsourcing chores? What's another way to save time and money each week?

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This article is from Carrie Smith of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

25 Questions to Ask Before You Outsource HR

Kate Lister — Fri, 12 Aug 2011 19:19:30 +0000

Link:

http://www.openforum.com/articles/25-questions-to-ask-before-you-outsource-hr

When you decided to start a business, it probably wasn’t the fun of keeping up with the latest employment regulations, tax issues, and OSHA requirements that lit your fire. Nevertheless, if you have even a single employee, you’re stuck with all that and more. You’re not alone and fortunately, where there is opportunity there are generally entrepreneurs with a solution. Enter the world of professional employer organizations (PEOs). For the folks who run these companies, HR is their passion.

Professional Employer Organizations

In a nutshell, a PEO acts as a co-employer and assumes many of the HR administrative functions that frustrate small business owners. These can include:

Payroll
Benefit administration (including healthcare)
Workers compensation
Recruiting
Background checks for new employees
Development of employee manuals
Safety management
Training (particularly in HR-related matters)
Drug screening
Employment assistance programs
Employment practices liability insurance

My first-hand experience with PEOs came 15 years ago when I was running a vintage airplane ride business in San Diego. The business was, er, taking off, but the payroll and other compliance issues were dragging it – or at least, me down. Just figuring out which posters I was supposed to have on what walls was enough to bring on migraine. A company called Employers-Resource was my salvation.

Co-Employment

As a co-employer, the PEO becomes the employer of record for tax purposes. They do all the payroll administration and reporting under their own tax identification numbers. Their fees run between 3% and 15% of payroll.

For some businesses, particularly new ones, an experienced PEO can offer big savings in Workers Compensation by virtue of their group rates. Group health insurance rates can be lower too, but it pays to check around. Some PEOs, due to their particular client base, may actually experience higher insurance rates.

But efore you wash your hands of all that annoying HR administrative stuff, it’s important to note that using a PEO doesn’t mean you’re entirely off the hook. If the PEO fails to pay the taxes for your employees, you’re still liable. Similarly, they are no get-out-of-jail-free cards for any violation of employee rights, wage, or similar disputes.

What to Ask a Prospective PEO

According to the National Association of Professional Employer Organizations, while the industry is relatively young – less than 30 years old – there are more than 700 PEOs across the U.S. So how do you pick a good one? Here are some questions to get you started on your search:

Does the PEO offer all the services you need or are likely to need in the near future?
How does each specific service work?
What options will you have for supplying payroll data? Email, fax, phone, website, hand delivery?
Do they offer performance guarantees and what do they cover?
What documentation will you receive regarding payroll, claims, filings, etc.? How often will you receive it? Will you have online access?
What hours will they be available by phone, email, or instant chat? What is their standard for returning phone calls?
What options will you have for reaching them in an emergency such as an on-the-job injury?
What assurances will you receive that all tax and other liabilities are being met?
What are their upfront and ongoing fees and how are they determined?
Will they charge you an average tax rate based on all their clients or will it be calculated for your organization? The former can result in a higher tax rate.
What rates will they be quoting for worker’s compensation? Health insurance? Etc.? How do they compare to what you could get on your own?
How long have they been with their workers compensation and health insurance carriers?
Do they have experience with similar size companies in your industry?
Are they licensed and operating in all the states where your employees reside, not just where they work?
Will they assist you in the event of an audit?
What is their customer retention rate?
How long have they been in business?
Are their financial statements audited by a CPA?
Who is their third-party benefits administrator?
How are their benefit liabilities funded?
What insurance do they carry and what protections does it provide you?
What makes them better than other PEOs?
How are employee or company disputes handled?
What is their track record on lawsuits?
What are their cancellation terms? To what extent will they cooperate with supplying information to a new PEO?

Naturally, you’ll also want to check a prospective PEO’s references with particular attention aimed at clients of a similar size and in similar industries.

The big players in the field include companies such as ADP Total Source, Administaff Inc., TriNet Group Inc., and Paychex. While they may offer the most comprehensive services, if you don’t need all of them, you may be paying for the extra overhead. Lots of smaller PEOs stand ready to take the HR burden off your shoulders, too.

You can start your search for a PEO on the Employer Services Assurance Corporation’s website.

This article is from Kate Lister of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

How to Save Money with Outsourcing

Annie Mueller — Fri, 05 Aug 2011 18:56:23 +0000

Link:

http://www.openforum.com/articles/how-to-save-money-with-outsourcing

Outsourcing can be a cost effective way to manage the myriad of tasks you have as a small business owner. Here are ways to outsource effectively.

The Best Business Functions to Outsource

If your business is simply not set up to do perform a specific business function, it's often more cost-effective to pay someone else than to set up your own system or gain the essential knowledge yourself.

It depends on a lot of factors, of course. How often you'll have to complete this task; how expensive set up is; how easy (or difficult) it is to outsource this task. Here are a couple of general principles:

If your business is not logistically set up to accomplish X business function, which must be done on a semi-regular basis but is very costly to do yourself, then you will probably save money by outsourcing.
If there is no one in your business with expertise on a particular business function or need, you'll get better quality by outsourcing and most likely save money over hiring a full-time employee to meet the need.
If there is some business function/need which your business cannot perform quickly/easily and or professionally, you'll often save money and improve quality by outsourcing.

A few common areas which might be cost-effective to outsource include:

writing
graphic design
website design
SEO research
research (scientific, market, etc.)
maintenance (of buildings, grounds, equipment, website, etc.)
manufacturing
packaging, shipping and/or order fulfillment
customer service (call center)
delivery
marketing and PR

The Best Methods of Outsourcing

If you're going to outsource well, you need to do it right. Here are ten simple rules to help you.

Know your own weaknesses/areas of need. Outsource those, not what you're good at doing.
Assign an adequate value to the task you're going to outsource, so you know how much you can invest in getting it done. Knowing the overall value in terms of dollars saved or potential dollars made gives you a good idea of the type of outsourcing budget you should have.
Find a reliable specialist. Don't just hire Joe Bob from down the road because this one time he designed business cards for his Uncle and everybody liked them. Get somebody who knows what they're doing. That's the whole point.
Create clear terms and use a contract. Don't assume things like deadlines, delivery dates, payment terms, or guarantees. Speaking of guarantees...
Ask for a guarantee.
Give specific directions. Do NOT assume your provider can read your mind.
Set deadlines.
Follow up and check in at predetermined milestones. This may not be necessary for small projects, but for most it's a good idea to have a couple of predetermined check-in points along the way. Otherwise you may end up at the end of the project with something that looks totally different than what you want.
Give feedback. Do so at each meeting you have, any check-in points. Make your feedback helpful and specific so the person or firm you hire can do something with your critique. General statements like, "it just doesn't feel right," or "this isn't what I pictured," really don't help.
Pay promptly. If you have found a provider you can trust, you want to be on their priority list. You'll lose that place if you mess around with payment. Trust me on this: as a person who does outsourced work regularly, I will take a job worth less if I know the client will pay promptly versus taking a job that might pay more but will require me to chase a client for full payment.

The Best Techniques for Saving Money on Outsourcing

Now, if you've figured out what you should outsource, and you're able to follow through with the right method of outsourcing, you can use these techniques to save even more money on outsourcing.

Outsource what is actually valuable to you. If your business does 90% of your marketing online, directing people back to a website, you can and should have a professionally built website. Invest the money and get that done. But when it comes to business cards, DIY.
Set up a scheduled payment plan. This can keep you from having to dole out a huge chunk of cash all at once. Ask for extended terms, make a deposit, pay a portion at completion, and the remainder 15 or 30 days after, if your provider will agree.
Negotiate. Really. Just ask for a better deal or an additional product.
Ask for a sample.
Ask for volume discounts.
Set up an ongoing contract. Many freelancers will give you better rates if they know they can count on continuing business. It saves them some time marketing and establishing new clients, and it saves you the time and effort of finding reliable specialists.
Guarantee an X amount of work. If you've not able to establish a contract, perhaps you can at least guarantee some dollar amount of work to your provider and get a discount.
Offer to trade. Bartering has been around a long time for good reason.
Build relationships.
Ask for referral discounts or credits.
Above all, be fair and direct in how you outsource. If you find people who are trustworthy, do excellent work, and deliver on time, you'll save more money in the long-term by using them for your outsourcing, even if you have to pay a little more initially. Quality work deserves fair pay, and as you build relationships and establish ongoing work, you'll be able to get high-quality work, and you'll be saving time, effort, and money at the same time.

That's not just smart outsourcing. That’s smart business.

This article is from Annie Mueller of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

10 Tricks for Cutting Training Costs

Thursday Bram — Fri, 18 Feb 2011 19:11:34 +0000

Link:

http://www.openforum.com/idea-hub/topics/managing/article/10-tricks-for-cutting-...

It may seem that the costs that go along with hiring a new employee mostly have to do with the cost of her salary or the work necessary to find her. But the costs of getting a new hire up to speed in your business are not insignificant — making it important keep a good grip on those costs wherever possible. These ten suggestions may be able to bring your training costs down for any new employee that you bring in.

1. Have a Plan in Place

Especially in smaller businesses that don't need to hire new employees regularly — or that are hiring their first one or two employees — training is just expected to happen. You get the new hire into the office and show her how to do everything that you do over the course of a couple of days. But that haphazard approach to training can be costly, at least in terms of the time you're spending on the project rather than on what you really need to be doing. Having a clear training plan lets you go through the process quickly and efficiently.

2. Put Your Employee Manual Online

The cost of printing a new employee manual for every new hire, along with updating it in the future, is one that can be avoided entirely. By using a tool such as Google Docs, you can provide everyone with the most up-to-date version of your employee manual available with no printing costs.

3. Provide Employees with Reference Manuals

Especially when you expect new employees to learn a complex tool or piece of software, it's useful to give them reference manuals. If employees have a clear guide to turn to, you don't have to provide them with absolutely perfect training. They don't have to get every detail right in the time you set aside for training because they can refer back to manuals when they have a question.

4. Stagger Training Days

Your new hires will need training far beyond what it takes to get them into the swing of things now. That makes delaying a little of their training possible, since you'll likely want to get your team members in the habit of thinking of how they can keep learning and improving their abilities to do their jobs. You will need to know exactly what your employees need to do their jobs immediately and what can be delayed, however.

5. Standardize Your Processes

It can be harder for small businesses to establish a standard way to handle every sort of task, but the more you can create a set of processes your employees can always follow, the faster you can get them trained. With a list of standard approaches in hand, new hires may even be able to reduce the number of questions they have to ask you to get up to speed, while still reducing errors or potential problems, because they can refer to your documentation.

6. Team Up with Other Employers

If there are other companies in the area that use the same software packages or tools that your company relies on, bringing in a trainer for that tool can become more cost-effective. Sharing a trainer can bring down the cost while still getting your employees ready to work with you. While you may not feel comfortable teaming up with your competition, there are likely businesses in other industries with at least a little overlap in their training needs.

7. Choose Lasting Training Materials

If you can find training materials that you'll be able to use long-term, you can eliminate costs that go along with either spending the time to train a new hire personally or to routinely buy new training materials every time you have bring in another employee. The biggest pitfall with training materials is with technical tools and software packages. If you update your tools, you may need to update your training materials as well. Taking that factor into choosing tools can help bring down overall costs.

8. Appoint Mentors for New Hires

A large part of training for new hires is really a matter of orientation, rather than adding to their skill sets. By having someone in the office that your new employee knows she can always turn to, you can reduce her dependence on learning how the office operates by rote and speeding up the process. A mentor can also answer questions as they come up, an important consideration in a business that doesn't have a full-time human resources staff to answer questions.

9. Consider Outsourcing Training

As long as your company's processes are fairly standard, you may be able to outsource at least parts of a new hire's training. While that approach can have a sizable upfront fee, it's likely less than you would spend piecemeal (in both time and money) to train your employee yourself. It's not necessarily the simplest option for every company (getting your approach to different tasks standardized can be costly, depending on your industry) but for some businesses, it's the right fit.

10. Return to Your Plans

Your business will change over time and what worked when you first started out may no longer be a good way to keep your training costs down as your company evolves. Taking a look at the strategies you use regularly can help you catch potential issues before they start tying up more of your money than really necessary in your training program. The same holds true for planning training beyond the initial orientation your employees need. For your employees to be able to move forward, take on new responsibilities and help your business to grow, you need to routinely revisit what you're doing to further educate them.

This article is from Thursday Bram of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Can You Save Money by Outsourcing?

Kate Lister — Thu, 04 Nov 2010 18:32:50 +0000

Link:

http://www.openforum.com/idea-hub/topics/money/article/can-you-save-money-by-out...

If the recession has taught companies anything, it's that cost-containment is key to survival. A survey conducted by Veritude in 2009 showed that only 3 percent of companies with more than 2,000 employees planned to return to their pre-recession staffing matrix.

Staffing companies, freelance job boards, and temporary help agencies are experiencing record growth as companies turn to outsourcing for a pay-as-you-go workforce.

When managed properly, outsourcing can:

Lower costs by saving on benefits, employer share of taxes, offices, and other organizational overhead
Reduce operating leverage by trading the fixed cost of an employee for the variable cost of a contractor
Expand the labor pool
Help keep pace with rapidly changing technology
Provide access to new ideas and perspectives
Increase accountability

Managed improperly, outsourcing can trigger a nightmare of investigations, costs, and penalties. This is particularly true if contract labor is used purely as a way to avoid paying employee taxes and providing benefits. Uncle Sam estimates that over 30 percent of companies are guilty of misclassifying employees as independent contractors. That's why the IRS, the Department of Labor and equivalent state agencies — all desperate for money — have kicked enforcement into high gear. [For more on worker misclassification see: IRS Wants its $7 Billion from Independent Contractor Misclassifications and visit IRS.gov.]

Estimates of the size of the contingent workforce vary, but according to Freelancers Union, one-third of workers — 42.6 million people — now work independently as freelancers, consultants, independent contractors, temps, part-timers, and self-employed entrepreneurs — and their numbers continue to rise.

"Cash-strapped American companies are taking advantage of the situation," said senior CNBC editor Marc Koba in an article titled Freelance Nation: Slump Spurs Growth of Contract Workers. "More than 90 percent of US firms use contract talent, with spending on them doubling in the past six years, to more than $120 billion."

"The trend toward outsourcing is here to stay," say Allison O'Kelly, CEO of Mom Corps. "Coming out of a recession, you typically see an increase in temporary labor. That said, even prior to the recession, companies were already shifting to more of a skeleton generalist staff augmented by outsourced specialists. The recession helped to accelerate this change."

Driving the other side of the equation, workers are being drawn to non-traditional employment because it offers them more flexibility and control over their lives.

Displaced workers have found a new home as self-employed freelancers — making the old joke that "consultant" is a synonym for "unemployed" no longer true. Recent surveys by vWorker and Upwork, two of the nation's largest freelance job boards, show that the majority of contractors — many of whom have joined those ranks after being downsized — don't intend to go back to the cubicle. Only 9 percent of freelancers surveyed by vWorker who started doing so because they were laid off say they want to return to a traditional job. They like their new-found freedom.

So, can you save money with contractors? Contrary to popular belief, in spite of the 30-40 percent you save on employer taxes and employee overhead, outsourcing won't typically save money on a straight dollar per hour basis unless you're willing go offshore. That's because unless a contractor's rate includes that overhead plus the cost of running their business, they won't be around very long.

But remember, outsourcing is about more than just saving money. vWorker's recent survey of its 140,000+ buyers (the companies that hire their 300,000+ freelance members) shows why they outsource:

50 percent do so because it's economical
45 percent say it allows them to better focus in-house staff on higher priority tasks
48 percent lack the skills to perform the outsourced functions in-house
36 percent say it's quicker than the traditional hiring route
34 percent indicate all of above are factors

So the next time you're faced with the decision of whether to hire someone as an employee or a contractor, ask yourself:

Can I afford and do I have enough work to justify a full time person doing this kind of work?
Do I want the additional burden of having to hire, train, and manage an employee?
Can I afford to risk a poor hiring decision?

Finally, make sure your decision to hire someone as a contractor passes muster with the IRS and all the federal and state employment laws. You're not paranoid if they really are out to get you.

This article is from Kate Lister of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

When to Outsource for Your Small Business

Nora Dunn — Fri, 18 Sep 2009 02:38:33 +0000

Link:

http://www.openforum.com/idea-hub/topics/money/article/when-to-outsource-for-you...

As a crucial growth step in any business—and in varying degrees throughout the business development process—outsourcing becomes a necessity. The big bucks are made not on one person’s efforts alone, but the efforts of many. Today we will look at the inherent characteristics of outsourcing, hiring employees (and the difference between the two), and how you can increase your profits—both emotional and financial—with outsourcing.

As a business owner—the king (or queen) of your castle, the master of your domain, and the ruler of all things to do with your company—you have it all. You also do it all, and sometimes you also try to be "it all" to everybody too.

You manage the core function of your business—keeping customers happy and product moving. But you also wrestle with the day to day operations of managing any business—accounting, taxes, marketing, technology, business development, etc. Then you perform a similar juggling act at home; after family time, cooking, housework, repairs, and maintenance, sometimes sleep can seem more of a luxury than a necessity. This is around the time you should really consider outsourcing.

The Difference Between Outsourcing and Hiring Employees

Hiring an employee is actually the first step towards outsourcing. In so doing, you are outsourcing obligations that you formerly met yourself, and overseeing their maintenance. The trouble is just that; you are overseeing their maintenance. You are providing office space and supplies, equipment, and eventually an employee (or even a department of employees) to manage your other employees. Many a business owner has found themselves entrenched in a world of employee management, far away from the source of their business inspiration, and drowning in negotiating ever-larger lease spaces and buying new office equipment to keep a small army operational.

Although this may be a slanted view of what it is to have employees, it also demonstrates the difference between outsourcing and hiring employees. Many of the headaches associated with having employees are eliminated by outsourcing.

Advantages of Outsourcing

The wages can be less than an employee’s. Although this is not always true, dollar for dollar outsourcing (after you take into account costs such as payroll taxes and benefits) is usually less expensive, especially if you are willing and able to outsource the work to somebody in another country with a lower cost of living.
You save on office expenses. Not having on-site employees means smaller office space and fewer supplies required.
You can take advantage of the time difference and speed up the delivery of your end product. If you happen to outsource to somebody in an overseas country, you can send them an assignment in the evening, and awake to a complete report in the morning.
You have more time to focus on the business, rather than being entrenched in operations.
If things aren’t working out, you don’t have to worry about regulations for firing your help or negotiating severance packages.
Per the above point, outsourcing is also great for finite or indefinite projects that are tricky to hire for.
Tax incentives: If you outsource overseas, some counties offer tax breaks for moving your business operations off-shore.

Disadvantages of Outsourcing

You have less control—or at least it seems this way. With little to no ability to stand over your helper’s shoulder, you must be explicit in your directives. Otherwise, you may end up having to do (or pay for somebody else to do) the project over again due to misinterpretations or miscommunications.
Sometimes you get what you pay for. I outsourced an online stock photography project last year, hoping for (what I thought was) some straightforward post-processing and administrative help. Unfortunately I chose one of the lower bids, and indeed I got what I paid for; in fact I got much less than what I paid for.
You may have to go through a few people before you find a good fit. As with hiring employees, the process of outsourcing can be one of trial and error. If you outsource online, you don’t often have a chance to communicate much beyond email for the interview process. Experts recommend that you try to interview your outsourcing candidates over the phone when possible.
If you don’t do your research, you won’t get what you need. As alluded to above, my own initial outsourcing experience left a bad taste in my mouth. Upon further research though, I discovered what the market charges for the services I wanted, and by low-balling the project, I got burned. It helps to know the going rates for what you want done, so you can make wise decisions.

Commonly Outsourced Jobs

Information Technology
Human Resources
Facilities Management
Real Estate Management
Accounting
Customer Support
Call Center
Market Research
Manufacturing
Web Development
Content Writing
Ghost Writing
Engineering

Resources for Outsourcing

How to Find and Hire a Virtual Assistant for Your Small Business — 10 tips for finding, vetting, and hiring a virtual assistant.
9 Tips for Working with a Virtual Assistant — What to do once you've hired a virtual assistant.
International Virtual Assistants Association — Use them to find virtual assistants all over the world.
Your Man in India — A resource mentioned in The 4-Hour Workweek (a bestselling book about outsourcing to improve your quality of life) by Tim Ferriss. Poking around this site will lead you to Get Friday, where you can hire a virtual assistant to take care of any number of tasks.
Upwork — Locate virtual assistants (both individuals and companies) all over the world that will help you simplify your life on many levels. Post a job or search for a candidate by the task you wish them to complete.
The Outsourcing Institute — A professional association dedicated solely to outsourcing.
Outsourcing.org — A directory providing information and free tools for suppliers and buyers of outsourcing services

This article is from Nora Dunn of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

9 Tips for Working With a Virtual Assistant

Greg Go — Thu, 20 Aug 2009 02:32:12 +0000

Link:

http://www.openforum.com/idea-hub/topics/money/article/9-tips-for-working-with-a...

Last week, we talked about how to go about finding, vetting and hiring a virtual assistant. Today, we'll talk about what to do once you've hired a virtual assistant.

When people say "virtual assistant," they might mean different things. For the purpose of this article, we're talking about remote administrative help, and assume the following three things:

They work remotely. Your VA will not be sitting next to you in your office or someplace near. All your communication will be online or on the phone, and you may never meet your VA face-to-face even if you work with them for years. A remote working relationship has its own quirky challenges.
They're global. That is, they don't live and work in the same state or country as you. The customs, laws and standard business practices they know may be different from the ones affecting you.
They're generalists, and not domain experts. For the purpose of this article, we'll assume your VA is not a domain or industry expert. They provide administrative help, not specific consulting.

Now that we're on the same page about what a VA is and isn't, let's get to work!

9 tips for working with your virtual assistant

1. Establish your workflow early.

Do you expect your VA to be available at certain hours of the day, everyday? Or can they mostly work on longer tasks and just give weekly updates? Set expectations for when you want to be online and available to reduce the frustration from not being able to reach your VA when you need them the most.

Discuss your potential task list with your VA. Hopefully, you already did this during the vetting and hiring phase, but it helps to go through the list again with your VA after you've hired them. If you're hiring a firm, the VA assigned to you may not be the same person you talked to while interviewing the firm. By giving your VA an idea of the work coming down the pipe, they can better prepare for it. When you're dealing with a firm, that might mean getting sub-VAs that specialize in the tasks on your list.

Ask them to send you a weekly (or daily or monthly, depending on the number of hours you've booked) breakdown of tasks they've done and how long it took each task.

Preferred communication. Your VA will be able to handle whatever communications medium you prefer. It may be by phone or IM or email. While you're at it, tell them how you prefer to be reached, at what times and for which problems. You don't want to have your VA sending you an email when they should have called about a question on a time-sensitive project, and conversely, you don't want them calling you at all hours of the night for trivial questions.

2. Try different tasks in the beginning to gauge your VAs strengths and weaknesses.

During the vetting and hiring phase, hopefully you found a VA that specializes in the tasks you will be assigning. However, and this is especially true of microbusinesses that have few people doing a large variety of work, you may have a range of tasks that require different skillsets. For example, sending you email and responding to responses requires people skills, whereas data entry requires being very detail oriented.

When you first start working with your VA, don't be afraid to try different tasks. You may find that your VA can accomplish more than you hoped for. If that's the case, you may assign this VA higher level tasks that require some thinking, and choose to hire a lower cost VA to do the data entry work.

3. Give very detailed instructions.

When writing instructions, assume nothing and be as specific as possible. At least until you know your VA's ability to "read between the lines" and/or "anticipate your needs," make sure your instructions contain step-by-step explanations. Do not assume that your VA will be able to infer anything. They work on many types of tasks across all industries, so unless you hired a specialized VA, don't assume they can fill in even the smallest holes in your instructions.

Show an example of the finished task if possible. Or give them an example to follow. When assigning a task that involves filling in a spreadsheet, I like to give them the spreadsheet with one or two rows already filled out.

Marked up screenshots are a great way to explain a task. The Firefox plugin FireShot makes it really easy to create a screenshot and add annotations to it.

If the task is more involved, you can also use a video screencast. Fellow OPEN Forum contributors Mashable has a list of great screencasting software (I like CamStudio) and a very comprehensive guide to making video tutorials.

4. Communicate using the appropriate tools.

A good VA will be able to use your preferred communications medium, whether it's voice calls, instant messanging, video conference, email, or carrier pigeon.

Keep in mind that speaking is about 7 times faster than writing, and about 4 times faster than typing. So once you have a good workflow going with your VA, and you're confident they understand your needs so you can have less detailed instructions, try to integrate faster communication methods into your workflow. However, for longer project-like tasks, written instructions are better so your VA can reference it.

I like to use email as the primary medium. It's good for giving initial instructions and getting delivery of work. For more immediately communication, we'll use IM and sometimes voice calls (using Skype makes international calls free). IM is especially good for asking quick questions while doing the task.

5. When you assign the task, ask the VA to verify that they understand the task.

For example, you can add one or more of the following into your instructions:

Tell me exactly what you're going to do to accomplish this task. (Basically, ask them to explain the task back to you.)
What is your estimate for how long this task will take?
Is anything I said unclear at all? Do you have ANY questions?

What you're looking for is verification that your VA understands the goals of the task and your instructions for accomplishing it. By asking for this verification up-front, it lessens the chance your VA will waste the time you've paid for doing the wrong thing.

The key: make sure your VA acknowledges and understands the task before they start working on it.

6. Check in on the task about 10-20% of the way in.

If you expect a task to take 10 hours, ask the VA to come back after 1-2 hours with their progress. This will allow you to:

check their work to make sure their interpretation of the task jives with your expectations,
update instructions to streamline the task, or
cancel the task if it turns out to be a bad idea.

7. Allocate two to three times more time for the task.

If you can do the task in an hour, expect your remote assistant to take 2-3 hours.

In the beginning, when you guys are just getting used to each other, it might take 3-4 hours. Once you've gotten into a good working relationship, and have found the perfect assistant for the set of tasks you tend to assign, it may only take the 1-2 hours.

But regardless, they will never be as fast as you. Even if you hired locally, the smartest college student you pay minimum wage won't be able to complete your tasks to your specs at your speed. So don't expect miracles.

8. Significant savings comes with volume (and trial and error).

The first month you work with your virtual assistant, it might actually take you more time to accomplish the task. By the time you write up instructions, vet candidates, get used to working with the remote employee, send back work with more instructions, and spend your time fixing mistakes in the final product, it might take considerably more time than if you had done the task yourself.

Some folks will try hiring a VA and give up quickly. Their rationale is "if it takes them as much or more time as me, I'll just do it myself!" But experienced small business owners will take the long-view and realize that even if the VA is not as fast as them, outsourcing low-level work frees them up to accomplish higher-level (higher profit) work.

The benefits of outsourcing come once you've found a good remote employee that is well suited to the type of tasks you assign, and when you've learned how to efficiently communicate and work with your virtual assistant.

The takeaway: keep the long-term benefits in mind, and don't give up after the first few tasks. The first 100 hours of working with a remote employee is going to feel like an expensive waste. But if you stick it out, you'll see significant cost savings over the next 10,000+ hours.

9. Learn from other people's experiences.

The Four-Hour Workweek - Tim Ferris' book and site has done more to grow the virtual assistant industry than anymore else in recent memory. Follow Tim's blog to learn about his lifestyle of automating as much work as he can, so he can travel the world and live the life he wants. Especially useful links:

The Holy Grail: How to Outsource the Inbox and Never Check Email Again describes the processes Tim uses to have his VAs be his frontline email corresponder.
The Art of Letting Bad Things Happen - When you trust someone else to do the work you know you can do really well, some bad things will happen. As Tim says, "oftentimes, in order to do the big things, you have to let the small bad things happen." And as the owner, you're the only one who can do The Big Things, so it's necessary to let some small things slide.

Ultimate Virtual Assistant Guide (Productivity 501) - A comprehensive look at the author's experiment in hiring a remote virtual assistant. Mark looked at Upwork and other freelance marketplaces, big Indian VA firms (like Brickwork India and GetFriday), and eventually settled on a local personal assistant. Great tips and research in this article. Definitely worth a bookmark.

Outsourcing Your Life (Wise Bread) - This article by OPEN Forum contributor Nora Dunn explains how even a full-time world traveller like her can use VAs to lighten the load and enjoy life more. It's not just for business!

This article is from Greg Go of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Outsourcing Your Life, and Creating New Businesses

Nora Dunn — Tue, 27 May 2008 11:56:24 +0000

How much is your time worth? If you get paid $25/hour for example, you work long hard hours on a salary (read: no overtime pay), and you have a family that is starting to forget what you look like, then how much is your time worth?

In order to gain an hour or two of family time, get out of the office at a decent hour, and save your health, is it worth $12/hour to hire landscapers? $15/hour to organize a terrific birthday party for your child? Or $10/hour to have somebody apply for visas for your next big vacation?

If you own a business and are doing nothing but running around putting out fires, how much more money could that business make if there were no fires to put out? Or rather, if somebody else could put them out for you and free you up to start averaging $50, $75, or $200/hour?

Welcome to the wonderful world of outsourcing.

Tim Ferriss describes this concept beautifully in The 4-Hour Workweek.

In fact, you can read a clip from the book here; a humorous and compelling case study for outsourcing your life.

I have read about this concept before. This is not news. I have hired cleaners, delegated taxes to experts (who can complete them in a fraction of the time it takes me and still manage to save me more money), and hired help whenever I could find a way to do so.

But when I read the book, and more specifically the passage above, I began to realize that it doesn't matter what you do for a living; there is always a way to outsource, make a profit in the end, and have more time to live life.

You can outsource your life to enjoy a fuller existence and more profitable career. But you can also create new businesses using outsourcing as the platform. Let's explore both.

Outsourcing Your Life

When I sold my business to travel full-time and write for a living, I figured I was in it on my own. Shy of sending my taxes to an accountant, what can I possibly outsource? And why on earth should I need to? For goodness sake, I travel full-time; how taxing can that be?!

Shortly thereafter, I learned that it doesn't matter what you do, or where you do it. There is always a way to find yourself too busy if you aren't careful. Time that was previously filled with client meetings, drafting financial plans, and driving all over the city became filled with visa applications, press work, destination research for articles, actually writing and editing, working part-time in trade for accommodation, internet research and posting… you get the point.

I am traveling, yet I seem to spend more time at WiFi hotspots than I do actually seeing the world.

So I started to look at how I could outsource my life. Here are just a few ways:

Article Research: Some articles I wish to write require a lot of research. Since it costs me (in both time and money) to do internet research on the road, I tend to shy away from these projects. If I can get a stack of research done for a small fee, and turn that research into one or many paying articles, I will have a healthy profit and somebody else to have done the grunt work which normally slows me down — or rather, stops me from starting.
Website design: I don't have the patience or time to learn how to design and maintain a website, but if I get somebody else on the task…
Blog postings: I regularly contribute to a number of blogs. And sometimes, it takes me almost as long to post the articles (especially if I'm in a place with a pitiful connection) as it does to write them. My virtual assistant can post it, take care of the html code, and attach reasonable tags. In fact, they can probably do it considerably more efficiently and effectively than I.
Travel Research: Instead of buying a travel guide and sifting through information I don't need, or searching on the internet for what I do need, I can have a tidy little report sent to me by my assistant on exactly the things I want to know about my next destination. And there's a potential cost savings in not having to purchase the guidebook too.
Travel Visas: If you have ever applied for a visa in certain countries with rigorous visa processes, you'll understand why this may be worth outsourcing. It saves both time and headaches.
Income Optimization: My virtual assistant can consolidate all my online income sources and report some of the specific activities I monitor on a regular basis through avenues like Feedburner, Analytics, and even other avenues I have a desire but no time to monitor.
Increase Traffic: Anybody who makes money online knows there is but one golden rule to making money — thou shalt increase traffic. If my assistant can spend the time required to drive traffic to certain portals, my income can increase exponentially.
Personal Tasks: It's a bit of a stretch past my comfort zone, but I could even outsource the monthly payment of my bills (online), and accounting. I do, however, draw the line at having them correspond with my family and friends for me!

There are a number of dos and don'ts to outsourcing your life and working with virtual assistants, so I will leave it to The 4-Hour Workweek to explain them, as the author does a bang-up job.

Let's start to think even bigger.

Creating New Businesses

I just managed to find ways outsource most of the things that hold me down and keep me from traveling with a clear mind and lighter pack.

But what about outsourcing as a business?

It’s pure art in the making.

Artists by nature are rarely business-minded people. Entrepreneurial talent and artistic talent utilize different parts of the brain. I wonder if it is one of the reasons you see talented artists (be they visual artists, musicians, or — ahem — writers) who aren't "making it big" like you believe they should.

What if you could pave the way for these artists? To develop a team of virtual assistants, versed in everything it takes to market that mural, or book that gig? And what if you could connect those artists with your talented virtual assistants? The artists become your clients. You then manage their marketing activity via your virtual assistants.

What's in it for the artist? A well-organized marketing plan, and possibly the big career break they could otherwise spend a life searching for.

What's in it for you? A cut of the profits for finding the artist, taking them on as a client, and outsourcing the marketing management. It's not cheating; there's still work involved in bringing a team of virtual assistants up to speed (an initial research task which you would be out of pocket for up front), and in soliciting and managing your artistic clients. But once you get even a few clients on board, what a wonderful form of relatively passive income this could be. Heck — you could even outsource the research on how to find potential clients, and get your virtual assistant to make the prospecting calls and book meetings for you. This leaves you free to work on another outsourcing business. Or drink pina coladas. Your choice.

This is just one business idea on how to maximize the power of outsourcing. If you take a look at your own profession with fresh eyes, you may find a few ways to do something similar yourself. Heck — you may even want to outsource your own job.

So… how much is your time worth?

Here are some outsourcing resources to get you started:

International Virtual Assistants Association — use them to find virtual assistants all over the world.
Your Man In India — a tool mentioned in The 4-Hour Workweek. Poking around there will lead you to Get Friday, where you can hire a virtual assistant to take care of any number of tasks.
Upwork — another portal for outsourcing and locating virtual assistants who can help you simplify your life. You can search for appropriate companies by the task you wish them to complete.

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This article is from Nora Dunn of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread: