How Outsourcing Can Create A BreakThrough In Your Business

posted on Feb 11 by Tim Conley in the Entrepreneurship, Marketing Mindset, Productivity category

Do the following and you could be here.

In the last week I had conversations with two prospective clients and I shifted their mindset so they could see how to create a breakthrough in their businesses.

The first prospect was interested in doing Internet marketing for his business, but before I would go any further with this topic I needed to know more about his business and what he was doing to get customers now.

In the process of telling me his story he complained that he was just buried in work and his business just wasn’t growing–it was feast or famine. I asked the most logical question when someone is having ups and downs, which is “Who is doing the labor in your business?” He said he was doing everything.

He then told me that he had been fired from his previous job because he kept making too much in commission checks as a salesman. Next logical question, “If you’re such a good salesman, why are you wasting your time laboring in your business when you could be making more sales to pay people to labor in your business?”

I’m glad to say the lightbulb went on in his head. His breakthrough was realizing that as a business owner he should work on his strengths and his most high-dollar activities. When he closes a sale, he can make thousands of dollars, which gives him the money necessary to hire people to do the labor in his business such as all the administrative work.

His business will see dramatic growth after this breakthrough.

Prospect #2 was telling me her business story and I mentioned that I outsource different tasks and jobs overseas where I can hire an expert for less than a novice in the US. To make the idea real to her, I said that when I had my pool company my office manager was in another state.

Her question, “How does one manage an office from another state?” Here’s the questions that I asked her and you can ask yourself:

Of the administrative tasks that your company needs accomplished must be done in a physical format?

What administrative tasks require a person at a particular location?

What tasks are you requiring someone do at a location and in a physical format that actually could be done electronically?

My pool company had to have actual labor performed at the customer’s home where the pool was located. However, there were no other tasks in the pool company that required people to be in Arizona. Bookkeeper and CPA were in Illinois. Office manager was in Florida. I was frequently on vacation. A business is a machine that works for you not the other way around.

I explained to her that she could hire an assistant from the Philippines who was fluent in English and had a college degree in Accounting or Business Administration for $5 per hour and could eliminate nearly all of her office tasks so she could concentrate on what she should be doing–marketing the solutions her company provides.

For those thinking that she would be taking jobs away from Americans, let me say this–WRONG. She had a similar concern, but here is how it works out.

An assistant in the Arizona will cost about $20 per hour including taxes and other expenses. This person will most likely not have a bachelor’s degree in business or accounting or a degree of any kind. Weekly cost is $800.

If she hires a Philippine assistant for $5 per hour her weekly cost will be $200 per hour giving a difference of $600. With the savings she can hire a laborer for her construction crew at a cost of $480 per week. The $120 per week could go towards the bottom line or reinvested into equipment to make her crew more productive.

With the new laborer out in the field, the skilled craftsmen can become more productive because they don’t have waste their time on low-dollar value, but important tasks such as site cleanup. Now the skilled craftsmen who cost as much as $30-40 per hour are getting the job done faster allowing her company to take on more projects, which means she can hire more people to work on the job sites.

All this from learning to use outsourcing appropriately.

Prospect #2′s breakthrough is much like that of prospect #1. High-dollar value activities are being put off or not done at all because low-dollar value tasks are being given priority. What is worse is they were assuming they had to do these low value tasks. This assumption was hindering their business growth.

In one week Prospect #1 has spent more time selling, which he is good at, and outsourcing tasks to subcontractors. He has already seen a sizable increase in his business and he is optimistic about being able to keep this trend going.

Since I just met with Prospect #2 yesterday, I’ll have to fill you in if she starts to implement outsourcing in her business.

Identify your high-dollar value tasks and your low-dollar value tasks that you are doing or should be doing and give the tasks to the appropriate person. Eventually, you’ll hire yourself out of job and your company will become a real business where you give it direction and vision and, best of all, you collect a check.

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