Why Entrepreneurs Rely on Business Process Outsourcing

I love outsourcing. As an independent marketer, all of my projects are, technically, being outsourced! Most of my clients hire me to market their businesses for them, at least until they’ve grown to need a full-time CMO.

As for my own little agency, I’m delighted to outsource the part of my business that involves math — namely, taxes and accounting. And this isn’t unusual. Last year, The Economist dedicated a whole issue to this new pay-by-the-drink economy that brings together “people who have money but no time and people who have time but no money.”

If the phrase “business process outsourcing” (or BPO) makes you feel squeamish, I get it. It’s often associated with sending jobs en masse to other countries. But here’s the thing: If you want to grow your business, I strongly suggest you learn to love BPO.

Given that 98 percent of U.S. businesses have fewer than 20 employees, you can’t possibly meet all of your business needs in-house. If you want to compete with the big guns, you need to follow their lead.

And that means outsourcing the tasks that are not part of your core business model.

So what kinds of choices do real-life business owners make about what to outsource — and what have they learned in the process?
 

Get expert coverage for essential functions

Chandeep Singh Khosa heads his own five-man team of Drupal website development and management from London.

He outsources his bookkeeping, but he doesn’t stop there. He also outsources extra Web development tasks to people he’s met in person at Drupal community events.

What’s his motivation?

“I did it so I can focus on being a dad and still have fast response to client requests,” he said, “in addition to covering my busy periods and supplying expertise I don’t have myself.”

Maya Middlemiss runs her own UK market research firm from a small Spanish village, managing a remote team of 12 full-time employees and a range of freelancers distributed across three countries. She says her freelancers are “like part-time members of the team.”

“Because we’ve always worked remotely and our work is very much project driven, it makes sense to outsource work in many cases,” she said.

“For example, it makes no sense for us to have accountancy and IT support as full-time employees, when we can work with experts in these fields on a retained basis,” Maya said.

She sees this kind of business process outsourcing as a way of getting the most bang for the buck: “I’d rather have a more experienced person on the job, for a higher hourly rate, just for the hours we need. That might vary month by month.”

If you have high-priority tasks that you need experts to manage — but not full-time — then business process outsourcing could be calling your name.
 

How to find the right freelancers

Matteo Lombardi is a Madrid-based eCommerce consultant. His clients seek him out for outsourced projects — and he outsources plenty of tasks as well.

In fact, he outsources “all that I can think of, when outsourcing takes me less time than doing it myself,” he said. Really, this is the essential rule of outsourcing.

After paying more than $100,000 to freelancers, mostly through freelance work sites like Upwork and Outsourcely, he has honed and refined his personal system for identifying excellent freelancers from these sources.

Most people, he says, rely on interviews to make decisions about whether or not to hire a freelancer. His approach is different.

“I rely on reading reviews of the freelancer very carefully,” he explained. “I’m watching for clues to how good they are, how committed to delivery of great work they are, and how good their communication skills are. The more complex the job, the more you want someone with great communication.”

But Matteo isn’t looking for cheap labor.

“My main advice is to find people that are amazing at one thing, and define the job in extreme detail,” he said. “I hire seasoned freelancers, instead of trying to go cheap with the new ones. As they are not yet proven, they might disappoint you, while a freelancer with 4.9 stars and 40-plus reviews will not likely let you down.”

You don’t need to limit yourself to the large sites with online reviews — but if you’re not sure where to start, they can be a good place to start scouting.
 

How to plan for business process outsourcing

I couldn’t possibly write a post about outsourcing without consulting my outsourcing gurus at SourceSeek. They’re a consulting company that helps companies find the right offshore software teams to work with.

The founders had worked with hundreds of outsourced developers to fill gaps in their developer experience by the time they started SourceSeek. Now they have a large team of freelancers they call upon for content marketing, software vendor screening, onboarding, and bookkeeping.

“Outsourcing [our own processes] has enabled us to keep the company extremely small but handle lots of clients with ease,” co-founder John Lema said.

John’s advice for your business process outsourcing is simple — but not easy.

“When you start working out outsourced resources, think about how much support, training, and direction they will really need,” he said. “Then double that.”

Yes, you read that right. Double it.

“Your success is dependent upon theirs, so treat them like partners and help them settle in,” he said. “Provide them with exquisitely prepared documentation, frequent checkpoints, and all the tools and knowledge they will need to succeed for you. After the initial investment of time and effort, your return on investment can be fantastic.”
 

Getting started

With access to a global workforce of specialists, the days of trying to do it all yourself are over.

“Work is different now, more fluid and flexible,” said Maya. “And at the end of the day, it’s all about the people involved.”

And in many cases, she pointed out, freelancers prefer a flexible arrangement. Like me, they aren’t looking for full-time work. Rather, they enjoy the flexibility and freedom of working independently.

Identify the tasks that are ripe for outsourcing. Find experienced people who are likely to deliver. And then set out your expectations clearly at the beginning and throughout the process. All of this frees you up to grow your business.