61 – Outsourcing on the Cheap: Tom talks Outsourcing

Episode 061 – Outsourcing or how I get some work for $1.70 an hour with no payroll taxes.
Episode 060 Heather Havenwood She is the SexyBoss and a prolific marketer. You ‘ll see insights into how she runs her business.
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Main event
Why should you outsource?
There are lots of reason and one is of course the price. I’ve paid as little as $1.70 per hour and the most $2.50 per hour. Another big benefit was getting out of payroll taxes and benefits. This can add 30% or more to your costs. It also lets you keep you and your other employees focused on more productive things that only you and they can do. In many cases depending where you are located, you could order work at the close of business in your time zone and it’s just the beginning of the day in your outsourcer’s time zone. So basically, you order some work and it’s waiting for you when you get to work the next morning.
One thing I will warn you about are brokers. I’ve not met one yet that wasn’t simply a money hungry exploiter. First of all, I don’t mind their business model which is running big warehouses where they host sometimes hundreds of people doing outsource work. They mark up the hourly rate and provide you an outsourcer. My problem with them is that they’ll say and do anything to get your account and then lie about the abilities of the people doing your work. I had one guy begging me to try his service and he knew I could promote the heck out of it if it was good. He gave me his absolutely best people and they still sucked. He gave me five different people and they all sucked. I can only imagine the people he was giving to the customers that didn’t have the reach I have. I suggest hiring direct which you can do from various websites where potential outsourcers list themselves and their abilities. They’re pretty honest people and I’ve found their claims of what they can do are way more accurate than the broker’s claims. I’ll tell you about a webinar you can watch a little later where you can find these websites.
Let’s talk for a moment about “delegation” vs “outsourcing”. To me delegation is giving tasks or duties I may or may not be able to do myself to somebody in my company. Outsourcing is giving a task again that I may or may not be able to do myself to an outside company. That’s what we’re talking about today.
I will make one nasty remark about delegation before we continue. I think the concept of delegation has been the ruin of many small companies. You have these holier than thou consultants and speakers telling you that you should only do what you’re good at and delegate everything else. This is ridiculous advice unless you are filthy rich and don’t care if you overspend for everything in your business.
Most people that take that advice delegate themselves right into the poor house. My idea is that if what you are good at is making you broke, maybe you should rethink that idea and gain some skills in areas you aren’t good at.
Delegating everything that needs done in a small business or startup is ungodly expensive. Plus, since you don’t understand all the things you’re delegating, you will most certainly spend way more than you should because the people you’re delegating to will know you’re clueless and many will take advantage of you.
You should only delegate things that you know what’s involved in doing them, how long it should take and how much it should cost overall with payroll, time and productivity losses of the employee doing the task. Yes, I know some tasks are too complicated to learn the details, but you can always check around and talk to trusted advisors that aren’t profiting from the task to give you the Cliff’s notes of the scope of the project and how much it should cost.
An example would be programming for an app. I don’t know how to even begin programming an app. I have people I could call that could tell me what is involved in my app idea and I could research it online long before I talked to an app developer to get prices. That way I would know if the price quoted was way out of line.
VIRTUAL ASSISTANTS
One other thing I’ll address before I get into actual outsourcing is the idea of a “Virtual Assistant” AKA VA. Virtual Assistants Can be good, but in my mind way too much money.
I don’ t want to step on toes because I’m sure many are very professional and honest virtual assistants out there but to me It’s just too darn much money. You could have three to five geeks working for you building you a worldwide presence for the cost of one virtual assistant. Also, many of them charge by the hour. Do you really think they are going to keep super accurate control of the hours actually spent on your stuff?
Let’s be realistic. What if the school calls about their kid being sick or in trouble? What if their friend calls suggesting they have lunch? To make a living they most certainly have other clients and everything gets intermixed. Are you their most important client when there are conflicting deadlines? I’m just saying, you most likely will not get the value. If their child gets sick at school and they drop your deadline work to go to the school, I totally understand that, but you can’t have your business interrupted like that. Yes, I know I’m going to get yelled at by professional Virtual assistants, but my job is to help you be profitable and I just don’t think they are the way to go. Plus, one other thing. I can guarantee not one of them in the US anyway will let you put a full-time webcam over their shoulder that you can monitor while they are supposed to be working for you.
OUTSOURCING
OK let’s get to outsourcing and BTW I have a great webinar on this at https://www.TomAntionWebinars.com I think it’s the last webinar before the comment section.
The only place I would outsource to and I believe is the best is the Philippines
Here’s why: They speak better English than I do. They are generally very honest people. They don’t want to steal your business in fact if they mention to their friends that they are thinking of starting a business, their friends tell them they’re crazy. However, they think it’s really cool to have a foreign boss. The skill level can be extremely high and the prices extremely low.
CULTURAL DIFFERENCES
The downside is that you must know the cultural differences or you will fail miserably like I did before I learned them. It’s really worth it to take the time to watch that webinar at https://www.TomAntionWebinars.com It’s by a guy that knows the culture and he describes many of the cultural differences that will make or break you. I’ll give you a few of them here.
The 13th month. In December it is customary to give the employee who has worked for you a year an additional month’s pay. If they worked for you half a year, then an additional half a month’s pay. When you are considering hiring a person you say something like, “I know about the 13th month. You just remind me when it’s due.” This allays one of the Filipino worker’s worst fears…..When getting hired by a foreign boss, they are afraid they won’t get paid. You bringing up the 13th month makes them feel you are ok with money.
Another thing you face in Asian countries is the concept of “FACE”. Frequently an Asian person does not want to say they can’t do something. There have been many instances where an otherwise excellent Filipino worker just disappeared with no notice. I learned that the employer gave them a task they didn’t know how to do and they were so embarrassed to admit it, so they just disappeared.
To overcome this you have to promise them you will teach them to do anything you want them to do or if it’s something technical you don’t know how to do, you must constantly reinforce the fact you expect them to ask you questions so you can teach them how you want things done and that you welcome questions and you really must nurture them so they never feel embarrassed and disappear on you. There are lots more things you’ll learn on the webinar. That’s at https://www.TomAntionWebinars.com
OUTSOURCING SUCCESS
There are lots of things to consider before outsourcing work. The first is which tasks you want to outsource. I’ve outsourced lots of bulk writing. I say “bulk” writing because I may have needed a bunch of blog posts and it was easier for me to farm them out than for me to rough them out myself. I still carefully read each one because even though they speak great English, it’s just not exactly the same as most US / UK / Canada people would say things.
I feel comfortable outsourcing writing (although in the beginning I would use a plagiarism checker like Grammarly before I would totally trust that they were composing original material.) I would also give them small jobs to start to be sure I am happy with their work before I depended on them for a big project. I have no trouble outsourcing graphics work and research work. I wouldn’t give anyone access to my server until they had proven themselves over a long time although I would give them web work that they would send me and we put it up here on this end or some of them might have a server they can put it on while I’m reviewing their work. I wouldn’t be opposed to have a test site available to them that if they destroyed it accidentally, it would be no big deal.
I personally would not give them access to any funds or bookkeeping stuff. It’s not a good idea to let people in faraway lands have a look at your finances. You don’t want them telling one of their underworld buddies where to look and how much they’ll find if they decide to hack you.
Just don’t put out work that would have major consequences if they screwed it up, because you will not be able to travel there or hire a lawyer there to recover damages. Heck you can barely do that in the same country.
CHOOSE A PLATFORM
Next, you want to decide how you will work with them. Skype is a common way. Lately Zoom.us has gotten great reviews. All of them let you share screens so you can see what they’re doing and they can see what you want them to see on your computer. You also have join.me and teamviewer.com
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GIVE CLEAR INSTRUCTIONS and BE PATIENT
This might be hard for some of you impatient bosses out there and you might have to curb your super-fast mind and bossiness in exchange for a loyal, low-priced worker. You have to be EXTREMELY CLEAR on what you want. You have to give examples. You have to speak slowly and make sure they understand what you are talking about. Remember: They don’t want to say they don’t understand. That’s their nature. You must spoon feed them and keep reconfirming they understand….and not just because they say they do. They need to demonstrate they understand your instructions. You have to be very kind and patient. Any hint of meanness or dressing them down because they don’t understand means you’ll have to start over because they WILL disappear. Now this is worth it in the long run to spoon feed them a little bit in the beginning especially if it’s a repetitive task because they may crank that task out for you for years to come. So, it’s worth a little time in the beginning to help make sure they know how to do it.
ONE OFF JOBS
If you don’t have full time and ongoing work, you can skip all the cultural stuff and go straight to freelancer sites like Upwork (used to be elance.com) or even fiverr.com I’ve had great luck at fiverr and some people haven’t. I kinda think the ones that had bad luck didn’t play the fiverr.com system right. You don’t go into it thinking your first 5 bucks spent will be a home run job. Yes, I’ve had plenty of those, but I don’t expect that. I expect I’m going to have to hire several different people to get my job done. Heck …..and I’m not exaggerating. I could probably hire hundred different people to do a job and not pay as much as one professional firm to do the job here in the USA. If you’re willing to pay a little more for graphics 99 designs lets you describe your job and then tell how much you’re willing to pay. The more you’re willing to pay, the more people that will send you graphic samples of your idea and you can pic the one you like best and that person get’s the money.
You don’t automatically want to choose the lowest bid either. You need to look at the overall picture and always check if the person has lots of reviews for similar work.
Whenever you are working on a project make sure you stay in communication with the person and whenever possible look at interim parts of the project so you don’t wait till it’s all finished to find out it wasn’t what you wanted.
The ownership of the work should be decided in writing and before the project starts. You should stipulate that the work is “Work for Hire” and make them sign an agreement so they know they do not get royalties or any ghost writing or graphics credits. You can find sample “Work for Hire” forms online, but I do need to suggest you have an attorney create it or review what you found online. Just make sure they know the only rights they have to the work is the agreed upon amount of money you pay them.
PAYMENTS
Many of the online services handle this so that both parties are protected. It’s kind of a mini escrow service, where you deposit money which is held by the site until you are happy with the work. They then release the money to the freelancer. Sometimes the freelancer will offer to go off the system and work for you directly. They are doing this to get rid of fees at the freelance site and also it could be to get out of the protections the site has for you. That means they can turn out poor or zero work and you have no recourse through the freelance site.
Also, as a sidebar when buying any larger ticket or more expensive items online be very wary if someone offers to use an escrow service where they give you the link to it. It could be a very legitimate looking service that is totally fake and under their control. You send the money to the escrow service and your money, the escrow service and the vendor disappear and open up under other names to repeat the scam.
Sometimes you will be required to pay part of the total fee let’s say 1/3 when they are half way done, 1/3 when they are done and the final 1/3 if you request any revisions. There is nothing inherently wrong with this so long as you have a copy of the work as they go so if they don’t finish it, you don’t get stuck with nothing to show for your 1/3 down.
POST PROJECT SUPPORT
It’s very common that you will have questions or concerns after a project is technically complete. Once a freelancer gets their money, frequently they are on to the next project and forget all about you. Unless you paid for after the project support, they don’t really have an obligation to help you. One thing you can do when picking a freelancer is look through their reviews and see if you notice any comments of how helpful the person was after the sale. That person should get extra points with you when you are trying to choose the best person for your project.
PROJECT MANAGEMENT SOFTWARE
For larger projects and multiple members on a team you may want to use a project management software and teach all the team members how to use it. I don’t really have a recommendation because I don’t do large project requiring multiple team members. I suggest you just Google the term “Project Management Software” and look for legitimate reviews on Google and YouTube.
CONCLUSION
So, for a cheap price and little bit of a learning curve on cultural differences you can get help that could really help your business.
Remember to check out the webinar on outsourcing at https://www.TomAntionWebinars.com
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This has been Episode 061 one of my Monday trainings. Every Monday I do a training on some topic that has either made me or saved me lots of money. On Wednesdays and Fridays, I do interviews with other successful entrepreneurs.
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