5 Ways Outsourcing Can Kill Your Business (hint: don’t hire anyone until you read this!)

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1. You haven’t got a working profitable business

profitable-businessThis is a mistake a lot of people make. They read about how great outsourcing is and how they can employ someone full time for $500 a month in (typically) The Philippines, and get all excited about how this could change their life and build their business. And it can.

But they have forgotten something rather important – they don’t actually have a functioning business yet! You would be amazed at how many people employ someone and then, when the person starts work, they don’t know what to give them to do.

This new member of staff is not going to wave a magic wand and make you money – there is a lot of prep needed before this. You must have a system that earns your business revenue and makes you money, and that can be followed by someone else. It cannot be something that only exists in your head (if at all).

The usual outcome on this situation is that you then have to spend almost all your own time doing 1 on 1 training with your new team member and even less gets done in your business than before!

This brings me nicely on to point two, the danger of not having business processes documented.

2. You Don’t Have ‘Standard Operating Procedures’

process-checklistThis is crucial, no matter what you might call it. Sam Carpenter, in his excellent book “The System”, called them SOPs. Others might call them checklists or templates or any manner of things.

But as long as the instructions to complete a task are laid out in a logical way that another person could use to get the job done, then that is the important thing.

These can be in many formats:

  • a simple written text document; such as MS Word or Google Docs
  • a mindmap
  • a checklist
  • an instructional video, such as a screen capture training

My personal favorite is a combination of written instructions form a Google Doc and a video showing the task being completed at the same time. This level of detail lowers the chances of mistakes being made and increases efficiency greatly.

There are great tools for shooting screen capture videos now, such as Jing and screencast-o-matic which are either free or sub $20 per year. If you can show on a screen how a task like a site submission or emailing potential affiliates is done, then you can be assured it will have the maximum chance of being done correctly.

3. You Haven’t “Practised” Outsourcing First Before Diving In To A Full Time VA Appointment

fiverr-logo-new-150x150Take my advice – practice small scale task outsourcing before you start employing someone full time for $500 plus a month. It is crucial to make sure that you have some experience of the “back and forward” of team and task management.

One way to practise that I recommend is by hiring people on Fiverr.com for micro tasks such as distributing a press release, designing a header graphic or turning a PowerPoint presentation into a video.

Even though these are very simple tasks, you still need to tell the contractor exactly what you need and what you expect the outcome to look like e.g. by showing them the type of design or “look and feel” of a website you like.

The most important thing to get right is the initial set of instructions, also known as the ‘brief’ that you send to your worker but there is also the getting used to questions and how and when they are likely to come. It is all about practising communication in this environment, and we will cover more about this area in part 4 below.

And than after Fiverr the next places to go and practise are sites such as Upwork (formerly oDesk) and Freelancer.com where you can get the experience of posting slightly bigger jobs of $50 and upwards. And this type of job ensures you will get a taste of what’s involved in more “serious” outsourcing – larger projects where your communication skills will be properly tested.

4. You Haven’t Mastered The Art Of Business Communication (Especially Clarity, Expectations And Daily Reporting)

communication-skillsThis is a key to success, and for many people it is hardest skill of all to develop. You must be able to communicate exactly what you want on a project and you must be able to trust your worker to deliver it. This is more important in projects where you are hiring from the likes of Upwork than it is from Fiverr, as there is more margin for error in complex jobs with more than one basic element to it. Three main tips here:

Check the attention to detail of your hire right at the start of the process by putting a ‘secret’ word or phrase in the job brief and ask them to respond using the secret phrase. This gets rid of those replying with automated messages and helps make sure the applicant has read and understood your job brief rather than just giving it a cursory glance and applying. Some people – often totally unqualified – just apply for everything and anything and this simply wastes your time, so weed them out right at the start.

Show the worker the end goal – what are you expecting to receive on completion of the project? It could be a list of product features, or a sample of some similar software, or a book that is similar to what you are looking for. It could be any format so long as there is little scope for misunderstanding.

Make sure you get a daily report by your worker on the project so you can check progress. Again be upfront on this at the start, and make sure it is logged in the job brief at Upwork etc as part of the deliverables. This means that if any performance issues arise, the site can rule that you have valid reasons to refuse to pay or if you need to cancel a job then the evidence of non-compliance is on your side.

5. You Haven’t Understood The Realities Of Different Cultures And Working Conditions

internet-cafe-asiaThis is very important, especially for your scheduling and your sanity! If like me, and most of our readers, you have spent all your life in North America or Europe, or down in Australia and New Zealand, then you are lucky enough to be used to great working conditions. But that is not the same all over the world.

In places like South East Asia, where much of the world’s cheaper employees and many outsourcers live, there are many challenges with electricity supply, internet connections and extreme weather conditions on a daily basis.

So several times a month you may find your team member or outsourcer ‘disappears’ offline for a few days; but it is important to remember that in most cases it is a power outage or internet connection causing this and not the worker being unreliable.

The other thing to be aware of is the culture of the country your worker is based in. I have over the years had many frustrating experience with workers from India. Don’t get me wrong, I love Indians. Most of them do great work and I have several Indian friends and former colleagues, but there is an Indian cultural thing that means they never want to say ‘No’. They always want to please – which is a great attribute in many ways – but this leads them to say ‘Yes’ to things that they just cannot do in time!

So when I have asked “Can I have that PPC report tomorrow?” and it doesn’t arrive again then you can understand that I would be a bit annoyed, to put it mildly, especially when I have promised it to a client.

So the main takeaway here is to give yourself plenty of time for work to arrive. Do not make tight last minute deadlines and make promises to clients that involve tight deadlines when the work is being completed overseas because chances are they will not be able to “pull it out of the bag” at the last minute the way you can.

Finally, another important local issue to be aware of is the custom of the “13th month” in Thailand where the expectation is that you pay an extra month’s salary after a year’s employment has been completed. If you don’t, then you are likely to have some seriously demotivated Filipinos on your hands.

But if you do pay the 13th month, then you will have some very grateful workers on your team; and you will have helped some people who have a lot less than you do. And that’s worth even more in life’s Karma exchange.

But, done correctly, outsourcing is an amazing way to run your business, and once you start properly – with our advice! – you will never look back.

I’ve also documented How To Avoid The Top 5 Mistakes You Are Probably Making In Your Business Right Now” in my report called “Outsourcing Hacks”, and it’s available now – along with this article – in a new PDF report at the link below:

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