“Outsourcing” is the practise of hiring freelancers and therefore the two are inextricably linked and to understand one you should study both sides of the equation. In the earlier articles Suzie Larcombe showed you how to follow in her footsteps and create a successful business working from home, using the internet to “freelance” her services.
In these next few articles I aim to show you how to use outsourcing to make money either for work done or as a middleman. How to use the Internet as a shop window to make sales and or buy from others.
Outsourcing has existed for many 100’s of years. Countries have imported cheaper products & food stuffs from all over the world for centuries and nowadays we have a truly global economy. Your car may have been made in Japan. The kids toys in China. The clothes on your back from India, shoes from Italy. The food on your table from any where on the planet.
Since the start of the industrial revolution many companies would “buy in” parts to be used in the assembly of the final product, a good example of this was a car manufacturer. One company rarely made all the parts for a car but they would assemble the main body of the vehicle in their own premises but would buy the brakes from one company, the tyres from another.
Similarly in the last 50 years or so the sub contracting of labour became an accepted business practise.
Now in the 21st Century with the Internet and improved communications outsourcing simply takes this further in that you now have access to a worldwide range of suppliers, which also gives much greater flexibility than employing permanent staff & often with a more competitive price. At the end of the day, in current markets, the final price is often the all important thing.
You may inadvertently already be employing outsourced workers! Many companies in the established western economies charge their normal fees and then subcontract the work to an Asian contractor, especially in the web designing & programming field. It’s a perfect business model. No permanent staff, but when you have work at say $50 an hour, subcontract it at $25 and make money as the middle man
Some people used to say “I don’t want to outsource because I don’t want to export jobs” however the situation is actually that there is nothing to stop workers in your own country offering their services .
I currently “employ” people from Britain, USA, France, Australia, Canada and India. I actually employ more people from the richer developed countries than from the Third World so it’s not all about the cheapest, cheapest is not best.
A few years ago outsourcing had very negative press. There were genuine complaints about jobs being exported abroad, problems of “call centres,” for example in India. Lots of banks moved their call centres offshore and then promptly have now moved them back again.
In Britain there were a lot of these and I remember buying a computer from Dell whilst living in Spain and it got lost and I spent three weeks talking to a lovely lady in India about where the heck the computer had gone. She could do absolutely nothing for me and it was infuriating.
However outsourcing can be brilliant and things have improved and you just need to know what to do and how to go about it.
In the next articles I am going to show you the positive aspects of using outsourcing both from the perspective of a supplier and a buyer. If you have a skill to sell or you have an existing business and from time to time you need to outsource staff, perhaps if you have won a new contract?
For someone wishing to create a new company it can be THE best method.
You can employ an entire “virtual workforce.” If the business struggles initially then you simply cut back on the number of contractors until things pick up. If the business ultimately fails it’s a lot easier, less expensive and less stressful to close it down and walk away.
I have written an article entitled “Outsourcing for Ruthless Capitalists,” For over 20 years I employed people in the UK and to be perfectly honest with all the legislation and the labour laws I just got to the point I was sick of it. I was sick of the hassle and for me outsourcing is capitalism in its purest form.
I no longer have to put up with people letting me down, not turning in for work, their child is ill, the dog has died, they have to go to the dentist, they’re off sick. I don’t have to pay them sick pay; I don’t have to pay them holiday pay. Contractors are responsible for all of this, the same as every self employed person in the world.
If somebody has worked for you for a number of years and suddenly the performance is very poor and you can’t help them get back into working at a more productive level it is very difficult this day and age to sack people. Outsourcing is brilliant, if someone’s performance dips and you can’t between you resolve the situation , then simply move on to the next one.
I also look from the perspective of those of you looking for work. Times have changed now so where before people were concerned about jobs disappearing from your country there is nothing to stop you now advertising your services via outsourcing.
The old criticism that you couldn’t possibly compete with somebody in India is not always relevant. Not everybody wants to deal with somebody for whom English is not necessarily their first language, or is in a different time zone and perhaps the standard of work will not be as good as yours.
In one of the following articles entitled “Outsourcing to Find New Customers,” one of my contractors, Kai, explains how he started offering his services as a writer and how he went from being rated 30.000th to 1st in just six months, so it can be done.
Outsource Your life
How much of your work and time you decide to outsource will obviously be a personal choice. In an article in the “Mindset” module entitled “New Age Thinking” I tell you about one of the best books I have read in recent years “The 4 Hour Working Week,” by Tim Ferris & I strongly recommend that you read it.
Tim Ferris had built his own business and was making decent money but had fallen into the usual self employed trap, namely he was working 70 hours a week and stressed to the eyeballs.
His solution? Outsource EVERYTHING. Your goal is to work just those 4 hours a week.
It may sound preposterous but he tells you exactly how he did it and for me the most important thing to take on board is the mindset. A good friend of mine, Gosta, bought the book on my recommendation. In the last year he has managed to persuade his employer to initially allow him to work one day a week from home and now 12 months later he has just signed an agreement where he can work full time from his new home on a remote island in Sweden!
This strategy is explained clearly in the book. Gosta’s girlfriend (who is now a freelance writer working form home) has written an explanation of what they did and how they succeeded in creating their dream life and you can read that here: Living The Dream
How to Pay Contractors
The big fear for many people is money. How do you go about employing somebody from outer Mongolia? How are you going to pay them? How do you know that they are trustworthy and that the work will be of a decent standard and as I said the important bit how do you pay them?
You don’t want to hand money over and never hear from them again and that I think is what puts most people off outsourcing. Elance & the other providers take care of all this for you and in the following articles and videos I am going to show you how to use it and the positive side of using an outsource company like Elance.
Author: Marc Walton