Outsourcing or hiring? Which is the best way to go for business owners? Honestly, in my opinion, the better question would be when and what to outsource? Outsourcing refers to a company contracting a 3rd party to execute specific functions, which means growth for both parties/ companies. It is the basis of effective management. It is important to take note that, all routine duties that businesses accomplish can be eliminated and delegated to a team of professionals to achieve the desired result. Effective outsourcing is perhaps the most powerful high-leverage activity there is. This is not just working smart. It is building a management system to replace yourself, the business owner.

The goal here is to free up your time and focus on greater things. Many business owners refuse to outsource to firms because they feel it is too much time and effort, and they could do the same job more efficiently by themselves. I for sure have been a victim of this syndrome of doing more to feel important while actually accomplishing less. I believe it’s about time entrepreneurs’ focus on demonstrating results rather than showing dedication. Transferring responsibility to other skilled and trained people enables you to lend your energy to other productive activities.

It is important to take baby steps towards paying others to work for you. Most entrepreneurs begin with the cheapest tools available and doing things themselves to get up and running with the little operating cash they may have. They get caught up with business operations to the extent that they forget when it is time for them to replace themselves with something more scalable. The truth is, there’s always someone who is more skilled than you out there, and it may seem like you’re bleeding cash in the short term by paying them, but the reality is that you’re actually saving and generating more cash in the long run, by leveraging their expertise. Entrepreneurs’ have conditioned their minds to one-on-one supervision, not knowing that that’s the role of a manager and not them as the entrepreneur. As the founder of a business, one holds the strategic vision of the company. And that should be their main role. To dream and relay the direction, and let others take you there. But if you get caught up in the donkey work, it is quite possible to lose the chance to be ambitious. How many people is it possible to supervise or manage efficiently when you have to be involved in every move they make? There’s a much better way, a more effective way, and that is to outsource some of the responsibilities to a professional team.

Most people confuse complex situations with the difficulty, but most situations are simple, and probably just emotionally difficult to act upon. Great outsourcing is focused on results and not methods. It may take more time in the beginning, but it’s time well invested. Outsourcing involves a clear, up-front mutual understanding and commitment regarding expectation in the following five areas:

a) DESIRED RESULT

Create a clear, mutual understanding of what needs to be accomplished, focusing on the results, not the method. Visualize the desired result. Share with the firm what the results will look like, and timelines.

b) GUIDELINES

Identify the parameters within which the firm should operate. Be honest and open by pointing potential failure paths and all information you may possibly have regarding your particular industry and regulations that are in place.

c) BUDGET

It is important to understand the stakes before taking any logistics. Outsourcing is relatively cheaper than hiring a full-time employee. Knowing what works for your business is key.

d) ACCOUNTABILITY

Discuss and set up the key performance indicators that will be used in evaluating the desired results, to ensure parties are aware of what is expected of them.

e) CONSEQUENCES

Specify what will happen, both good and bad, as a result of the evaluation. This should be clearly stated in the service level agreement before signing.

For your finance, accountancy and payroll requirements, we at Vinestalk are ready to be your outsourced partners.