Outsourcing Isn't Cheating - Why Solopreneurs Should Consider It

For whatever reason, solopreneurs often think that working with contractors, or outsourcing, is cheating in some way, and that if they delegate tasks to others it implies that they aren't a true solopreneur and can't handle the life of a one-person business owner.

False. Nothing could be further from the truth. In fact, most successful solopreneurs do outsource. 

Chances are there are a lot of things you can do for your business, but you can't (or shouldn't) do all of them at once. Your brain needs to adjust and multitasking isn't as productive as you may think.

Tune in to this episode to:

• Get a better understanding of the benefits of outsourcing
• Learn the four dimensions that you should use to determine whether a process should be outsourced or not
• Review other considerations to think about before working with other contractors
• Understand when outsourcing may not be the best path to take

And so much more!

Resources Mentioned In The Show

• Download the Hire A Pro or No spreadsheet

Want to share your experiences and learn from other one-person business? Be sure to join our community! It's free :)

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Episode Transcription

Joe Rando (00:00):

Okay. So let's go through the reasons. The first is you can be more efficient when you outsource certain aspects of your work, right? I know for me, I can do a bunch of different things. I can write, I can make really involved spreadsheets, I can even code. I can develop new business ideas, but I can't do all these things at the same time. My brain needs to adjust. If I'm in writing mode, my spreadsheet skills are less than peak.

Intro (00:25):

Bigger. Doesn't always mean better. Welcome to the One-Person Business podcast, where people who are flying solo in business, come for specific tips and advice to find success. As a company of one, here are your hosts, Joe Rando, and Ries.

Carly Ries (00:45):

Welcome to the One-Person Business podcast. I'm one of your hosts, Carly Ries,

Joe Rando (00:49):

And I'm Joe Rando. As promised, we're continuing the process of deep diving into various topics around the solopreneur success cycle. We'll be doing this for many aspects and phases. Our goal is to help you go from start to finish, from deciding to create a One-Person Business to growing and perhaps selling it. As a reminder, the solopreneur success cycle consists of three phases of building a One-Person Business: Get started, Do, and then Adjust. Each step has multiple topics that we call skills associated with it. We're gonna use tags in the One-Person Business podcast webpage to help you find what you need so you can focus in on the things you want to learn about at that point. If this sounds a little complicated, it's not nearly as complicated as going into business and making mistakes. That gets really, really ugly.

Joe Rando (01:38):

Plus, companies with multiple people usually have experts in each category. You've decided to go on your own, so you need to know everything. We're bringing you experts organized around these topics to help you quickly learn what you need to know to be successful in your One-Person Business. Today we're gonna talk about outsourcing, which is both in the get started and adjust steps of the solopreneur success cycle. Basically this makes the last thing I said, not quite true. You don't have to know everything if you can hire a contractor to help you with the stuff that you either don't know or you're not good at, or you hate to do. So the question is why outsource and which aspects of your work should you outsource? You're a One-Person Business. Is outsourcing kind of cheating? Carly?

Carly Ries (02:24):

No. So outsourcing is not cheating. Get that out of your head. I understand why you might think that. I thought that at one point, but it's actually essential if you want to be successful as One-Person Business owner.

Joe Rando (02:36):

So there are a number of reasons you should outsource certain processes. Specifically processes that are not directly generating revenue for your business. In business speak, these are called cost centers. They're necessary for a business to run, but not directly contributing to revenue. So let's go through the reasons. The first is you can be more efficient when you outsource certain aspects of your work. I know for me, I can do a bunch of different things I can write. I can make really involved spreadsheets. I can even code. I can develop new business ideas, but I can't do all these things at the same time. My brain needs to adjust. If I'm in writing mode, my spreadsheet skills are less than peak. Carly, do you find this true for you?

Carly Ries (03:22):

Oh yeah. Especially with marketing, there are so many different directions that I could be pulled in. As a solopreneur, you may want to learn how to do a bunch of things that you can do yourself, but you need to ask if that is worth your time or if you should focus on what you already know, what you're already good at. One thing at a time like Joe just said, and then outsource the rest. It's not always worth it to learn everything.

Joe Rando (03:43):

Well said. So the next thing is, it can make it more enjoyable, right? There are many aspects of running a business and as a One-Person Business, all these initially fall on you, but there are some aspects that you're not going to like doing probably. Outsourcing these can make running your business much more enjoyable. When I first started my solo real estate development business, I did my own bookkeeping. This was a bad idea. I hated it. And despite three accounting classes during my college career, I was really never very good at it. The day I outsourced my bookkeeping was a fine day for me.

Carly Ries (04:21):

That kind of ties back into the whole efficiency thing. You typically get more done when you enjoy what you're doing so outsourcing what you don't like or aren't good at is just a win-win overall.

Joe Rando (04:32):

Definitely. The last thing is that outsourcing can be very cost effective if you do it right. You can save time that can now be used for creating value. Instead of doing your own bookkeeping or whatever else it is, you can be spending time producing whatever it is that you sell or working on projects that you get paid for. So these are three reasons. To be more efficient, make it more enjoyable and to be more cost effective. Next I want to talk about the dimensions that you should be thinking about in terms of determining whether a particular function should be outsourced. To my eye, there are four dimensions to that. In no particular order, they are the actual importance of this particular function for your business; your skill at this particular function relative to a professional; the time commitment required to get this particular function done every month;

Joe Rando (05:31):

And lastly the cost for a pro versus you. Let's start with importance. What do I mean there? Importance means how important is the function to the core of your business. As you'll see, if a process is important to your business, the most competent person should do it. This can be used as a measure of how much revenue the process generates, if any, but it can also relate to critical things like tax returns where messing it up can be a big deal. If it's important and you are the best, you should definitely do it. If you can hire someone better without breaking the bank, that's definitely the way to go. Next you need to consider your skill versus a pro. Are you better at it than them? Are they better at it than you? Are you the same? Whether or not to outsource something that you are best at, will be a function of how important it is.

Joe Rando (06:21):

If it's important, you need to do it. If it's not, then a pro might make more sense. If the pro is better at it, then if it's important, it's probably best to outsource. You're seeing a pattern here I hope. Next, the time commitment is a big consideration. For processes that aren't directly generating revenue, the decision to outsource can be a function of how much time the process requires. If it doesn't take much time, it's more likely to be worth doing yourself. If it is a time consuming process and not important, then outsourcing it makes a lot of sense since your time is better spent generating revenue. The last consideration here is the cost of a pro versus your opportunity cost. Opportunity cost is how much revenue you won't be able to generate because you're spending time doing this instead. If the pro is cheaper than your time, then that is in favor of hiring the pro.

Joe Rando (07:14):

If not, then it leans toward you're doing it. Now let's look at some other considerations when things get a little bit on the edge here. Sometimes, it's not a hundred percent clear which way to go. Particularly when you're getting started. You might want to think through some of these things. The first is the need to conserve funds. If there isn't enough cash flow to afford outsourcing, then you need to do it at least until the cash flow situation improves. That's a definite consideration early on to a lot of One-Person Businesses. The next is perhaps there's not enough work. If you have time that you've allocated to your business, but you're not using it, then using it to run your business makes sense so you can better use that time. If you don't have enough customers, maybe there is enough money coming in, but you have this free time, then why pay somebody when you can do it yourself for now. You'll learn some things

Joe Rando (08:07):

and as the business grows and you need that time, hand it off to a pro. Another factor, sometimes you love doing something in your business that on paper should be outsourced, but you're running a One-Person Business to live the life that you want to live. So if you love doing something and you won't screw it up, then do it. For example, I love doing accounting and taxes. Okay. I just lied about that. But if I did love doing accounting and taxes, then I should probably do it if long as I'm not gonna make a mess of it. Next consideration, especially times in the early days when you don't know the answers to the questions that we've already posed here. In that case, it's probably best to try doing it yourself until you have a better understanding of the nature of the process.

Joe Rando (08:54):

I hope that makes sense. If you're not sure to outsource or not, give it a try, see where it's at and then take it from there. So, there are a lot of factors here and it's not a hundred percent obvious which way you should go. What we've done here is we've created a tool , a spreadsheet, Excel spreadsheet called Hire A Pro or No. It lets you enter aspects of your business and rate them on the four dimensions. Then it gives you a recommendation based on the scores that you give to each of those categories. This can be a really useful little tool just to point you in the right direction. It doesn't always say do it, or don't do it. Sometimes it says maybe, or probably, but then you can take these other factors into account to see whether or not it's something you want to consider. Feel free to download that. Do let us know what you think about it if you have a chance, either on the community or just shoot us an email.

Carly Ries (09:47):

That will actually be in the show notes of this episode. That is where you can download it. Joe, I think that was very well said. That actually wraps up another episode of the One-Person Business podcast. Listeners, if you like what you hear, be sure to visit LifeStarr.com/podcast where you can listen to previous shows, subscribe, or you can find us anywhere you listen to your episodes. We'll see you next time.

Closing (10:15):

You may be going solo in business, but that doesn't mean you're alone. In fact, millions of people are in your shoes, running a One-Person Business and figuring it out as they go. So why not connect with them and learn from each other's successes and failures . At LifeStarr, we're creating a One-Person Business community where you can go to meet and get advice from other solopreneurs. Be sure to join in on the conversations at community.lifestarr.com.