Entrepreneur Tips

8 Outsourcing Do’s and Don’ts Every Entrepreneur Needs to Know

I know. I know.

As an entrepreneur, it can be very easy to want to handle every task on your own. Your startup is your baby, and you want to make sure it’s well taken care of.

Of course, that means dedicating time to every single, little thing that pops up. Unfortunately, there’s not enough time in the day for you to handle it all, and you’d probably burn out within a few months if you tried to tackle it all on your own. Thankfully, technology and changes in the business landscape have made outsourcing an ideal solution – at least in certain scenarios.

Entrepreneurs and business owners all across the globe have benefited greatly from outsourcing jobs to freelancers and contractors.

When done correctly, outsourcing can:

  • Lower overhead costs and wages paid
  • Improve productivity and work efficiency
  • Allow you to focus on building up core areas of your company
  • Help you to accomplish highly technical jobs
  • Allow your in-house employees to focus on more meaningful tasks
  • Upscale on a faster time scale

But this is all under the assumption that you are outsourcing the right way. In case you didn’t know, yes, there are some mistakes that you can make in the hiring process and while figuring out how to implement your outsourcing partners effectively.

As a business owner and digital marketer myself, I’ve had plenty of opportunities to learn how to do outsourcing. With that being said, I’d like to share with you a few of my favorite outsourcing do’s and don’ts that every business owner and entrepreneur needs to know.

The Do’s and Don’ts You Need to Know

Outsourcing Do’s Outsourcing Don’ts
Do manage effectively: It is absolutely essential that you adequately manage your outsourcing partners. While you never want to micromanage, it’s still important that you have guidelines, expectations, schedules, due dates, and important details about the job ironed out. Don’t go with the first provider you run across: In your excitement to get the ball rolling, you might be tempted to jump the gun and choose the first outsourcing partner you run across. No! Stop! Look around, do your research, check for reputation, quality of work, look at different options, and then choose.
Do research your outsourcing partner: It’s easy to go online, Google “contractor” or “freelancer”, and go with the first choice. Bad idea! You need to do your research and talk to multiple potential partners to make sure you get the most qualified contractor, as well as the biggest bang for your buck. Don’t outsource core staff members: You need a core team that understands your company’s culture, has the expertise to handle important tasks, and can manage all the other moving pieces. And you need them to be available when you need them. Outsourced team members don’t work great in this scenario.
Do use your outsource partner for time-consuming tasks: That’s what they are there for. To help you handle the task that aren’t necessarily challenging but which take an unnecessary amount of time to complete. From data entry to general administrative tasks, save yourself some time and use your contractor. Don’t get cost-effective mixed with cheapest: Yes, you’ll want to save on costs when possible but that doesn’t mean you should go with the cheapest choice just because it’s the cheapest. The truth is you generally get what you pay for, so be wary of getting these two ideas crossed in your head.
Do use tools when searching: The Internet is an amazing place with plenty of niche areas that can help you find the specific type of worker you are looking for. Use freelance boards, want ads, social media networks (e.g. LinkedIn), and staffing agencies (when necessary) to find that perfect candidate. Don’t leave your outsourced worker(s) completely alone: One of the beauties of outsourcing is generally having to worry less about micromanaging, but that doesn’t mean you should completely avoid telling them details about a project, client, or task. Be specific, let them know important information, and check in occasionally on important projects. It could save you (both) a lot in the long run.
Do prepare for all the legal challenges that can arise: You’ll want to make sure that you don’t risk losing any important data or intellectual property to a contractor. Have them sign documentation that gives you the rights to the work and a non-compete agreement if necessary. Don’t micromanage or hire someone you need to micromanage: As mentioned in our tip above, you’ll need to be able to keep your outsourced workers informed about the task at hand, but you shouldn’t be micromanaging their every move – nor should you need to. If they aren’t capable of getting a job done without seeking your guidance and input every couple of hours then you might need to go with someone else.
Do know how hiring a contractor affects your tax bill: If you’re not careful, a contractor can fall into the “employee” zone which can, in turn, lead to tax misclassification that can lead to some tax problems down the road. Don’t try and cheat the IRS by “contracting” a full-time employee: This one can be kind of tough, employee misclassification can happen accidentally, which is scary enough. But you should avoid doing so purposely as the IRS and other government agencies can penalize you greatly for doing so.
Do negotiate on price for services: This is one of the beauties of outsourcing; you have some say in what you are capable of paying. If necessary, go with a different provider Don’t think outsourced workers and service providers are going to be loyal: You need to recognize that they are a business as well, and if a bigger (better paying) client comes around, they might just dump you on a dime.
Do keep your full-time staff in the loop, and let them handle important tasks: Outsourcing can make your full-time staff members a little nervous – and resentful. Help them to understand the role of the contractor, and allow them to handle important tasks. Don’t forget how important your outsourcing partner can be: So, contrary to what we just said above, working with the right (loyal) outsourcing partner can be absolutely vital to your success, and by highlighting your willingness to continue working with them, you can actually grow both teams together. The more work you get, the more they can help you; it’s a win-win.

he truth is that outsourcing can have just as many challenges as benefits. But if you approach the situation with the right understanding, plan, and control, you can definitely help your company take it to the next level.

Don’t forget to continue visiting me here for the best in entrepreneurial and digital marketing support, and if you need any support with your digital marketing plan, contact me today at 956-566-4998.

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