My New Rule for Outsourcing
No Comments »Much recently has been made of outsourcing, geoarbitrage and such, and I’ve had my ins-and-outs with it. I’ve come up with one new simple rule about outsourcing for entrepreneurs that I’m going to try to stick with:
If at all possible, only outsource things you can’t possibly do. If you’re going to outsource something you can do, if at all possible, make sure you can cover it with NET PROFIT.
Hey, we’re entrepreneurs here not a big-conglomo-corporation. We are starting businesses with nothing and scratching things together to see what clicks. It may or may not work. You may win, you will lose (some), and you might wind up being able to pay for what you spend. We are likely funding these efforts through money we make on other businesses or a day-job. The more money you spend on things you could do for free is more money that your new fledgling business will have to earn to pay it all back.
It will suck for a while as you may have to increase your area of expertise and you may not like it or be good at it. I am decent with numbers but inexperienced at accounting – but I don’t pay a book-keeper. It’s probably $400/month I’m saving. I do however pay an expert accountant to file and manage tax returns. There’s a difference – I can scratch together enough reasonable skill to enter everything into QuickBooks, but it’s unlikely I can give enough time to learn tax regulations to successfully file my own corporate taxes.
It does take time away from the wheelhouse of creativity and it does sap momentum. But we’re building on nothing but our own skill and labor here. So take my advice – until you can cover your outsourcing needs, be it virtual assistants or software developers, only spend on what you absolutely can’t do. Otherwise, only hire what you can cover out of NET PROFIT.