Outsource or Not? 7 Criteria to Help you Decide

Whether you own a company (online or offline) or whether you work on your own as a freelancer there is always a time when you have to decide if you will undertake a particular part of a project or task you need to complete. In other words, you need to decide if you will outsource or not. Here is a list of 7 criteria to help you decide:

  • The particular task(s) isn’t your core competence and is not a main part of your business. The task will not generate any profits and is not a source of competitive advantage. Example: you own an online store which generates its income selling products and you want to rank higher in the search engines. You should consider outsourcing Search engine optimization (SEO) to a specialized company or individual.
  • The task is repetitive or routine that wastes your time and keeps you from doing what you are supposed to do. For example if you are running a small business you should consider outsourcing your accounting to a professional accountant.
  • The task is only a one-time need or repeats in regular intervals. For example, you want to have a complete redesign of your website. Learning web design would not really be an option so outsourcing would be the solution.
  • It’s cheaper to hire someone to do it rather than doing it yourself. There is a very serious pitfall to this: most people don’t value their time correctly. Most will prefer to spend 10 hours submitting their websites to directories for SEO instead of paying someone $50 to do it. Is your time worth $5 an hour? Think about how much you could do to promote your business in those 10 hours, especially if you are not that familiar with SEO. You are better off hiring someone who has the right tools and expertise to carry out your task faster and more effectively.
  • The task could be done by you or your employees cheaper but takes up resources that could be better used elsewhere. This is a tricky one: there are only 8 hours in a working day for most businesses and during those hours you and your employees need to do your everyday tasks: sell, promote, innovate, manage and take care of your customers. If a task comes up that will keep you from carrying out your core work, you are better off outsourcing it, even if it costs more than doing it in-house.  Otherwise you might be hurting your business by neglecting important tasks and details.
  • The skill needed to carry out the task is so specialized that it does not make sense to have a regular employee or you do it. There are so many little things that can come up and you simply cannot afford to have a regular employee specialized for each task just in case….For example, if you are running a 2 person business servicing home PCs and someone comes along asking you to fix his powerful server, you might be better off outsourcing it to someone else.
  • The task is one that people don’t like doing. A very simple example: if you don’t like cleaning your house then you hire a cleaner to do it for you!

In a nutshell, you should keep at things you like and at what you do best.

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