January 20, 2014
Last year, I took my wife to Mexico for our first non-family vacation in years. You don’t care about my personal life, and I’m not trying to show off to fellow workaholic entrepreneurs. But this is the point: I was able to break away only after gradually outsourcing certain tasks and watching our company grow much faster because of it.
When starting a business, entrepreneurs act like they’re superhuman — fulfilling multiple roles in a company because they can’t afford to hire anyone else to do them. But even when they become profitable, some founders still struggle to relinquish low-level tasks. We seem to enjoy the control and busyness of doing it all.
The problem is that doing it all doesn’t do anything to advance a business. To create a successful company, entrepreneurs must focus on strategy, not tasks — teaching, not doing.
While it may be tough to cut the cord at first, trust that your company needs you in the conference room more than in an Excel spreadsheet. When I began outsourcing some of the more menial tasks I’d been handling, I was able to focus my time on sales and the delivery of my company’s services. Our revenue doubled in a year.
Ready to start clearing your personal to-do list and generating more profits? Let’s look at what you should outsource.
What to Outsource
There are a number of areas that lend themselves to outsourcing, which will save you and your team valuable time and money.
- Accounting: Most companies need a leader who understands financials and can shape pricing and strategy. However, accounting is very much about the details, and the majority of that workload should be outsourced to a specialized individual or firm. My company works with an outside firm that comes in 20 hours a week to work on the monthly, quarterly, and annual reports, and the arrangement has worked well for us.
- Lead Gen/Inside Sales: Generating new business is crucial for your company’s survival. You may have a brilliant marketing team and great enterprise sales reps, but someone’s got to be on top of outbound efforts in your target markets. Besides, it takes time and money to build a solid internal team, and lead gen roles typically see high turnover rates.
- Human Resources: Operating as the CEO and head of HR might have worked when you were just getting the company off the ground, but as your team grows, so do your human resources requirements. In addition to compiling the appropriate paperwork and seeing that employees’ needs are met, you’ll also want to make sure the company is compliant with standards such as the Equal Employment Opportunity Commission (EEOC) and Family and Medical Leave Act (FMLA). When you reach the size where these standards apply, don’t navigate the bureaucracy as an amateur. Hire HR professionals to create a program that benefits your employees and protects your company.
- IT/Help Desk: Your IT needs (computers, phones, email accounts) will grow along with your business, and more equipment means more issues and troubleshooting. Have an outside IT company manage these vital (but menial) tasks so you can focus on building products, services, and your client base.
The Benefits of Outsourcing
Outsourcing eliminates the need for you to be a jack-of-all-trades and brings a host of other benefits. An outsourced partner will:
- Save you time. Strategy, training, and processes all take time, and they all suffer when you’re chasing activity instead of productivity.
- Allow your team to focus. Some busywork is essential to running your business, but it’s not essential that you or your staff be the ones to handle it. Outsourcing allows you to devote your energy to the company’s core competencies and big-picture items.
- Bring their expertise. Any outsource shop should be better at what it does than you are because it’s that company’s core competency.
- Take on seasonal work. Some of the best jobs to outsource are seasonal, such as filing taxes. When the workload doubles, if you’ve outsourced, the outside company can worry about additional hiring and task management.
Who You Should Hire
It can be daunting to choose the right companies when first outsourcing your work, but it doesn’t have to be. Ask other companies who they use to get a sense of who the real pros are.
You should be careful about what you outsource. Remember to offload what you do badly, not what you do well. Keep in mind what your customers are buying from you, and outsource the non-essentials. For example, if your product or service runs on your own servers, but the customer is not buying your solution for your servers, outsource that function to a company such as Amazon. There’s no need to spend time on something that isn’t vital to what you’re selling.
Appropriate outsourcing allows you to run your company better. With fewer low-level tasks to deal with, you have more time to train in-house staff members to replace you in certain functions and execute on your vision.
Startups may require superhuman efforts to become successful, but at the end of the day, you’re only one person, and you serve your company better when you’re focused on the big picture. Plus, a trip to the beach every once in a while is great for gaining perspective.
Guest author Tim Edwards is the CEO of NSR, a holding company that acquires underperforming or undervalued businesses, provides capital for fast-growing or high-potential startups, and creates holistic teams focused on strategy and execution in sales, operations, finance, and human resources. Tim is an entrepreneurial thought leader and an expert at acquiring, building, and turning around businesses.
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