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Hire vs Outsource

Hire vs Outsource

Hiring employees is a big step for a small business. It might be the first milestone on your way to dominating the market, but it is also a big responsibility. Making the right choice between hiring and outsource is crucial to your business success.

When you started your business, you may have envisioned yourself in a plush office with a staff of assistants or running a giant production facility that employs skilled tradespeople. But in the beginning, it was just you. You had all the ideas and did all the jobs. Now, between building a website, fielding customer service calls, and designing a new product line, there is no time to sleep.

It is time to bring more people into this venture, but how? Hiring is a big commitment. Are you financially ready for this long term? Outsourcing can be expensive. Can your profit margin support an independent contractor?

If you are asking yourself questions like this, you have good business instincts. Intentional business growth is sustainable. The other kind…not so much. I’ve worked with clients who woke up one day and realized they had a business structure. Somehow, they did not see this coming.

When I ask why one task is outsourced and another is handled by an employee, the answer is a silent shrug. That is a sign of a business that grew by accident. You want to make a plan and grow your business intentionally for maximum value.

Here are some steps to making a decision about hiring versus outsourcing:

Document the tasks in your business
Since you currently do everything, this will be easy. Make a list of every task you accomplish in a day and a week, then group the tasks into jobs. There may be several tasks you complete throughout the week that are for marketing, for example. Divide your business into jobs that serve your customers and jobs that run your business. Designing new products would be the former, while paying the rent on your facility falls into the latter category.

Give yourself a job
Looking at your list of jobs, decide which ones you are best at. These are probably the tasks most closely related to your industry. Things like accounting, marketing and customer service might fall outside your area of expertise. Make the distinction between what you like to do and what you are good at, since they may be different.

Identify proprietary information
By proprietary I mean a recipe that is unique to your business. You may have a special way of baking your products or services that makes them unique. Maybe you use an unusual combination of ingredients. Go back to your tasks list and identify which tasks require knowing at least part of your brand’s special recipe.

Imagine the future
Take some time to grow your business in your mind. If you continue on your current path, what will these jobs look like in three years? Paying the bills, one of your core functions right now, may include preparing payroll, buying additional supplies, making business loan installments, and keeping up with insurance premiums on vehicles. Other jobs, like promoting your website, could look very much the same in three years. Mentally, put yourself in each job in your business and imagine how it could grow and change in the next three years.

For most businesses, there is a simple formula for deciding to hire or outsource. Jobs that will not fundamentally change can easily be outsourced. The volume of the work may increase over time, but the substance of it will not.

Tasks that require knowledge of your proprietary recipe should not be outsourced. You want to keep your secrets in house as much as possible. Hire someone to do these tasks, so you have more control over how they use this information.

Finally, choosing which jobs you continue to do yourself and which ones you hand off to some else, employee or contractor, is key. Keep in mind which tasks you are really good at, even if they are not the jobs you prefer to spend your time on.

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