The Comprehensive Guide to Outsourcing Your Business

The Comprehensive Guide to Outsourcing Your Business

Outsourcing your business will open new doors of success. You can hire and fire people from your home irrespective of what type of business you own. You don’t have to manage and do everything yourself.

Not anymore.

This guide to outsourcing your business will show you why it is the right time for virtual outsourcing, how to do it, how to build and manage a virtual team, and how to grow your business exponentially.

Let’s begin.

Understanding the Need of Virtual Outsourcing

As an entrepreneur, you cannot handle every single business process yourself. You need a time. A team is what makes a business successful.

Organizations don’t have the potential to handle every single business process due to certain constraints. This is why outsourcing has become something very common over the years. Outsourcing refers to the process of allocating business processes to expert individuals and professional outsourcing companies.

A business process that is outsourced to an expert will be taken care of by it. For example, an organization outsourced the entire ‘customer operations’ to an outsourcing company. Now, the outsourcing company will use its resources, manpower, professionals, technical equipment, etc. to provide customer services to the customers of the subject organization.

In return, the organization will focus on other business operations that need special attention.

It is a win-win situation.

Virtual outsourcing is a more current trend where specific business processes are outsourced to companies and individuals who work virtually from another city, state, country, or continent. Virtual outsourcing is normally associated with freelancers and is preferred by small and medium businesses.

For example, you are living the US and own an ecommerce store. You need to redesign the website and need someone to manage your ecommerce store. You don’t have the time to do it yourself thus, you are thinking of outsourcing these two tasks to professionals. You post a job and hire an affordable designer from India, and a webmaster to manage the online store from the Australia. Since these are the types of tasks that can be done virtually from any place, therefore, it doesn’t matter where the freelancers are located.

Virtual outsourcing has connected the global talent to businesses. Small businesses, online entrepreneurs, bloggers, manufacturers, and industrialists use virtual outsourcing for the fact that it is such a cost-effective way to work with the best individuals.

You are not restricted to local talent instead you can go ahead and hire anyone from any part of the world. Virtual outsourcing works for pretty much everything and anything that can be done virtually. You can hire designers, programmers, writers, architects, salespersons, finance managers, bookkeepers, accountants, IT professionals, doctors, and many others virtually.

All you need is an internet enabled computer to find, hire, communicate, and work with the freelancer. You don’t need a hell of resources.

In this guide, you will learn how to find, hire, and manage freelancers virtually from your home. You will learn how to manage virtual teams without spending a whole lot of resources. You will learn everything that you need to outsource your entire business and how to operate it on complete autopilot.

To your surprise, it is not just possible but it is something that is so common. There are businesses that are being managed by people sitting in their homes in different parts of the world. It is a reality.

If you are spending money on office, equipment, infrastructure, and on the building, you are wasting resources. You are wasting money that can be saved and spent on something better. Why not save the money and buy your dream car? Why not visit your favorite place?

This is now achievable.

 

Benefits and Drawbacks of Virtual Outsourcing Your Business

Benefits

Virtual outsourcing has several benefits that makes it a lucrative business model that is being used by businesses all over the world such as IBM, JPMorgan, L’Oreal, and others.

The following infographic salescoach shares the ups and downs of outsourcing and insourcing sales.

benefits of outsourcing

1. Access to global talent

What could be better than having access to global talent? You can find and hire individuals and teams from any part of the world for your business. You are no more restricted to local talent. Virtual outsourcing brings home the best talent irrespective of geographical barriers.

Virtual outsourcing is different from the traditional outsourcing in the sense that you can hire anyone from anywhere virtually in case of virtual outsourcing while with traditional outsourcing, you have to stick to local talent. This is what makes it better.

Hire someone from India, China, Malaysia, Kenya, New Zealand, France, Dubai, Brazil, Canada, Mexico, Belgium, or any other part of the world. The candidate has to work virtually so it really doesn’t matter where he is located.

2. Right expertise

Outsourcing provides access to right experience and expertise. For a business, it is not possible to have all the expertise in-house.

For instance, a professional is needed to handle the legal aspects of the business. Instead of hiring an individual and train him for the local legal laws, it seems to be a much better option to hire a professional legal advisor with intensive experience and let him work virtually from his office.

It is, in fact, not just about the expertise but a professional freelancer will have the right equipment and tools to carry the job from his place. Think of a freelance photographer or a freelance designer. You don’t have to buy a camera for the photographer neither you have to purchase the licenses of the designing software. They will have the tools.

You just have to hire and assign the tasks.

They have the expertise, the resources, and the equipment already with them.

3. Stay focused

Let’s assume for a moment, you own an ecommerce store where you sell smartphones. Website design, blog management, social account handling, SEO, digital marketing, and list building are not the core processes of your business. The core processes include stock management, order processing, customer engagement, and shipping.

business core processes

To focus on the core business processes, the supporting processes should be outsourced. Every business has supporting processes that should be outsourced to the best freelancers available so that the business and the CEO with his team can focus on the core processes.

This consequently leads to increase in sales and revenue.

The idea is to improve the business by investing time and resources in the core processes which is only possible when the business is sure that the supporting processes will are handled perfectly by the outsourcing team.

4. Cost reduction

Virtual outsourcing saves money. Period.

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Virtual outsourcing stats

It is cheap. You only have to pay for the service. You don’t have to rent an office, you don’t have to buy equipment, you don’t have to buy tools, you don’t have to buy furniture, and everything is handled by the outsourcer.

You need someone to create professional videos for your online business. You have two options.

First, buy extra furniture, create a cabin for the photographer, buy a camera, a laptop, video editing software, and related tools. Give an ad in the local newspaper and radio for the vacant position. Hire a videographer and let him do the work from the office.

Second, post a job on a freelancing platform with your requirements, interview candidates, hire a videographer and let him do the work virtually. No need to buy anything at all.

Decide yourself, which path you think is better and cheaper.

This just doesn’t end here. Anything that you buy for your business is considered as its asset and it is taxable. Do you prefer giving tax every year of all the equipment for years to come or you just want to pay the freelancer and save money as well as the tax?

5. Risk reduction

Business and risk go hand in hand. Every business process has certain risks. These risks can be reduced with proper planning and analysis. New businesses don’t have the resources and the team to tackle risk. Shifting the riskiest business processes to expert outsourcers who have been doing this for ages will reduce the risk significantly.

shift business risk figure

They know how to proceed with the task at hand with minimal risk.

Same is the case with the business process where the outcome is uncertain. For example, publishing a guest on an authority website such as CNN. Find a freelancer and initiate a contract with him where you agree to pay if and only if the link is approved, else you don’t pay. You see you have transferred the risk to the freelancer.

Freelancers, on the other hand, have the right experience and they know how to mitigate risk. A freelancer who has published a few guest posts on CNN knows how to get a blog post published there. He will only take the job if he knows he can do it.

It is a win-win situation where the business transfers the entire or a portion of the risk to the freelancer and the freelancer in return, knows how to mitigate the risk to get his agreed payment.

6. 24/7 business operation

All the successful businesses operate 24/7. There are no holidays. If you are targeting a global audience, you cannot set specific business hours.

For instance, if you offer financial consultation services in the US, Canada, Australia, China, UK, and a few other countries. You take orders via phone number which is available on the website. In this scenario, you have to keep the phone number operational 24/7 so that you don’t miss calls from prospects.

Hire a couple virtual phone assistants, forward calls to their numbers, and relax in your home. You will not miss any call.

Keeping your business open throughout the year is not an issue with virtual outsourcing.

Drawbacks

All the good things don’t come without pitfalls. Virtual outsourcing has a few drawbacks too that should not be ignored.

1. Leakage of confidential data

Every business has some sensitive information that is kept confidential. Revealing this piece of information might prove to be lethal for the business.

Sharing such information with freelancers might be a risky move. Even if the freelancer doesn’t intend to use the information but imagine the same freelancer being hired by one of your competitors.

The good news is that information loss can be controlled.

information leak stats

First, refrain from outsourcing projects that are related to core processes.

Second, refrain from sharing the confidential data with the freelancers and the employees that you do not trusts since 77% of information leak is attributed to undisciplined employees. If you have to share the information and there is no way to hide it, split the task and share it with multiple employees. Sharing all the sensitive data with one employee and/or freelancer is more harmful than sharing chunks of the same data with three different people who do not know each other.

2. Reduced control

This is something very obvious. The business loses control of the outsourced processes.

However, this mostly depends on the contract between the parties. If you want to maintain control of the process, you will have to bear the risk. Alternately, transfer the risk to the freelancer and lose control.

You have to choose which works for your business. Both the options are available.

Outsourcing only supporting processes is the best approach. Losing control and management on supporting tasks don’t hurt your business to a significant extent. The business operates smoothly.

3. Cultural issues

Virtual outsourcing brings with it cultural issues. If freelancers work with the team, then cultural issues might be a problem.

These cultural problems lead to poor performance.

The solution is quite simple, don’t let freelancers communicate with the team where you think cultural barriers will impact the team performance. In most of the cases, it is not an issue that’s hard to deal with. It is not a core issue.

 

Identifying a Need for Outsourcing

The virtual outsourcing process starts with a need.

It is not a simple process. The real challenge is to decide what tasks to perform in-house and what processes to outsource. If you have a simple business model, things will be easy but for complex business models, it is a time-consuming process.

Any process that is not strategically crucial for your business can be and should be outsourced. You have to differentiate the business processes into strategical (core) and non-strategical (supporting).

Taking the right decision at this stage is crucial. The success of the virtual outsourcing and of your business depend on making the right decision.

How to Identify the Tasks for Outsourcing

Following is the process that you should follow to identify the tasks and processes for virtual outsourcing.

  1. List all the business processes and tasks. The list should contain all the tasks and processes.
  2. Categorize the tasks on the basis of strategically important and strategically unimportant. A strategic task is one that is related to your business’s uniqueness and/or competitive advantage. It is a task that needs access to confidential information for completion. A strategically unimportant task is one that does not impact the competitive advantage of your business and the completion of such a task doesn’t require access any sensitive information.
  1. All the strategically unimportant tasks can be outsourced.

This is the simplest way to identify the need for virtual outsourcing.

There are certain business tasks that are obvious to be outsourced. These include:

  1. Content writing and copywriting
  2. Virtual assistance
  3. Digital marketing
  4. Web development, coding, and designing
  5. Graphic designing
  6. Customer services
  7. Phone and live chat support

You can see these tasks do not impact the strategy and are standalone. For instance, you don’t have to share anything with an SEO expert based in the Philippines. All he needs is access to your website and that’s it.

 

Finding Global Talent

It is time to find the global talent and bring the best freelancers in your team.

There is a systematic way to do it. Most of the businesses don’t know much about it and they have no idea how to find the best candidates.

There are two ways to finding freelancers.

  1. Post ads on the internet, invite applications, conduct interviews on Skype or via email, create your own monitoring and billing system for freelancers, and move on.
  2. Head to a freelancing platform, post a job, work through the platform, and get the job done smoothly.
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The first method is not a decent approach as it is expensive. Why build a complete system in-house when you can use it for free?

Using freelancing platforms is the best way to approach freelancers pretty much in any part of the world.

A freelancing platform connects employers to employees. You have to post a job. Freelancers will apply on it. Interview and hire the right candidate. Pay through the platform. Monitor the employee with sophisticated tools available with the platforms.

The freelancing platform acts as a third-party which provides all the resources and helps businesses in finding the talent they need.

Freelancers, on the other hand, join these networks for getting jobs.

The three leading freelancing platforms include:

  1. Upwork
  2. Freelancers
  3. People Per Hour

The list of these platforms and websites is potentially very long but these three networks are the best in the game.

Why Use a Freelancer Website

There are tons of benefits such as:

  • Low cost
  • Money back guarantee
  • Sophisticated billing and tracking system
  • Access to freelancers
  • Instant hiring

In the sections below, you will learn how to post a job, select, interview, hire, and build a team of virtual freelancers. All the freelancing platforms work in the same way so I will use Upwork to make things clear. Once you will get through the process, you can move on and head to any freelancing platform of your choice.

 

Job Posting, Interviewing, and Hiring

Before you can post a job on a freelancing website, you must register as an employer. Click here to create your free client account with Upwork.

Select ‘I want to hire a freelancer’.

Fill the form, enter the information, verify your email address, and you are done.

upwork create account

Login to your account, and move to the ‘Settings’. Update your profile and add a payment method. You can add your credit card or PayPal to verify the payment method.

In order to attract the best candidates with the best rating to your job post, you must verify your payment method as this is something that is visible to the freelancers. A client with verified payment method is likely to get more applicants as compared to a client with an unverified payment.

upwork payment method

A verified payment method means that the client has verified its payment method and he/she can pay the freelancers as compared to a client with an unverified payment method who has not added or verified a payment method.

For a freelancer, it is safe to work with clients having verified payments. This is what Upwork recommends the freelancers so make sure before you post your first job, you have verified your payment method with them.

Posting Your First Job

Posting a job is an art. You have to master it so as to attract the best candidates.

Click on the ‘Post a Job’ link in the sub-menu after logging in to your client account.

post a job upwork

On the next page, you will be asked to choose the kind of job posting.

job types on upwork

Do you need a part-time freelancer or a full-time freelancer? Well, since you are new to the network, it is recommended to select part-time at this stage. However, it doesn’t really matter which job type you select because you can convert job types later.

Next, you have to select the category and a subcategory.

upwork job categories

Keep them appropriate as freelancers search jobs based on the categories. What type of work you need? Is it something related to designing? If the exact category isn’t there, select the closest one.

Once done with the category and the subcategory selection, craft a catchy title for your job which is known as ‘Name your job posting’. This is the portion that works as the title of the job post. It has to be catchy and descriptive.

Descriptive titles work best. Explain what the role is and what type of candidates you are looking for.

Just below the title, you have to write a description of the job post. This is the part that mostly goes unread. But your job is to explain everything here. The more details you put here, more candidates will apply for the post.

Ambiguous, incomplete, and spam job posts don’t get as much attention.

You can attach files if needed.

Details of the project

There are a lot of details that you will be asked to enter about the project.

  • Project type
  • How many freelancers you need to hire
  • Skills a candidate must possess
  • Experience of the freelancer; entry-level, intermediate, or expert
  • The duration of the job or the project
  • Number of hours to be invested every week
  • Invite freelancers
  • The minimum qualification of the candidates
  • Screening questions

You can see that the job posting contains all the details about the project. Posting a job will not take more than 10 minutes. Perhaps the most important part of the job posting is the way how you want to pay.

Almost all the freelancing networks (including Upwork) offer clients with two types contracts to choose from.

  1. Fixed price contracts
  2. Hourly contracts

Fixed price contracts are best for one-time tasks. You and the freelancer agree for a fixed price and as soon as the freelancer submits the project, you can release payment if satisfied.

In case of hourly contracts, the freelancer is paid on the basis of number of hours worked. An hourly rate is set and the freelancer bills the hours. Every week, you will get the invoice with the number of hours worked. Pay for the actual number of hours.

Upwork has a software that is used by freelancers to bill hours. It captures the screen, tracks keyboard hits, and mouse clicks. You know whether the freelancer has really worked or just tried to bill the hours.

Both the types of contracts have their ups and downs.

Initially, you should go for fixed price projects as they are safer. You will only pay if the project is completed and delivered. For example, pay a fixed amount to a freelancer for a blog post. If you are satisfied with the blog post and the content, pay for it.

Pro tips for writing the job post

The job description is the crux of the job post. This is where you have to put the details of the project. Not all the jobs get due attention from the freelancers. Your aim should be to get as many candidates as possible so that you can bargain and can choose the best.

  • Be descriptive. Write details of the project. What you are looking for, what needs to be get done, what are your expectations, what should be the qualification and experience of the candidate, turnaround time, etc.
  • Write short paragraphs, use bullets, and make it easy-to-read.
  • Freelancers are used to sending spam cover letters so to avoid recycled cover letters, add a question in the job description. All the cover letters that don’t answer the question should be ignored.
  • Ask for relevant samples. Verify the samples.
  • Set a realistic budget and clearly mention the pay terms, milestones, and other details in the description.

Shortlisting, Interviewing, and Hiring

As soon as you publish the job, you will start receiving proposals.

upwork job proposals

You can invite freelancers, review proposals, message candidates, hire, shortlist, and decline proposals. Before you take any action, wait for two days. After you have received enough proposals, shortlist the candidates based on their qualification and experience.

shortlist candidates on upwork

Send messages to shortlisted candidates.

This is the time when you have to talk to the candidates. You can send messages on Upwork, call them on Skype, or you can use any other interview method you prefer.

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You have to ask questions about the job, past experiences, or anything else you prefer. The idea is to find the candidate that best suits your business.

Negotiate on the price. Read past reviews of the candidates. Check their portfolio. See samples.

This is not as such a difficult thing to do.

In case, if you are not satisfied with any of the candidates. You can invite freelancers. This allows you to invite freelancers based on their experience, ratings, qualification, and skills. Search from the thousands of the freelancers and invite the ones you like.

The invited freelancers have to apply for the job post. Once they do, shortlist them and interview them.

This process can be time-consuming but it is simple and painless.

Choose one candidate and hire him. You should hire one candidate for a single project. Close the job and work with the freelancer.

Pro tips for interviewing and hiring

  • It is a good idea to chat with the candidates on Skype. It is allowed by the freelancing platforms. This gives you a good idea of the capabilities of the candidate.
  • Save the profiles of the freelancers that you like so that you can contact them in future for similar work.
  • Don’t consider it as a one-time project but look for freelancers that can work virtually with your team for years.
  • Divide the project into milestones. Communicate the milestones to the freelancer. Only fund the first milestone, not the entire job.
  • The money is kept in the escrow and will only be released upon your request so make sure you are satisfied with the deliverables.
  • Communicate with the freelancer during the project. Reply to the messages promptly. Be open.

 

Developing a Team

So you have hired the first freelancer for your business. The things have started to work.

What’s next?

If you are happy with the freelancer, keep him in the team. Instead of working with a new freelancer every month, you should build a winning team.

This is how businesses succeed. This is how businesses grow.

Normally, freelancers do not prefer working in teams as they need something new to do. They look for different challenging opportunities. Therefore, retaining freelancers isn’t an easy task.

You must offer freelancers with benefits and pay that they should stick to you. Even if you have to pay them a little more than the industry average, don’t hesitate to. Look at the bigger picture.

Perhaps the biggest motivator for a freelancer is pay. Give a raise to your freelancers consistently. Give them bonuses. Appreciate their work.

Flexibility is the other variable that is of much importance for freelancers. They don’t want to work for a specific number of hours every single day. This is what makes a freelancer a freelancer. Do not bound them to do work in a specific time period. Assign the work, and let them choose their own working hours.

Flexibility and decent pay are the two motivators that will help you maintain a team of freelancers.

Integrating Freelancers to Your Team

Now this is not an easy thing to do for the fact that the freelancer has to work and communicate virtually with the rest of the team. If your business completely relies on virtual outsourcing, you will experience a hard time initially converting virtual freelancers into a team.

Set rules and roles

Set rules for the team and the freelancers. These must be standard rules for everyone in the team. For example, you can use WhatsApp group to communicate deadlines, tasks, and other projects to the team. This WhatsApp group can work as the central place for directions and instructions.

Besides, roles must be defined. Even if you work with freelancers who work from their homes, you must assign them roles. There are two benefits of assigning roles.

First, it boosts organization citizenship behavior in the freelancers. They feel connected to the business. They consider themselves the part of the business and a team. Instead of just writing articles, assigning the ‘copywriter’ role to the freelancer will result in motivation and better performance.

Second, defining and assigning roles is a professional and an effective approach. Business management gets easy. Everyone will know what one has to do. There will be no confusion on the tasks to be done. Additionally, hiring new candidates and filling vacant job posts become a lot easier.

Centralized communication and document sharing

Asana is an online software that is developed for teams. Teams can work together, communicate, and can track their work easily with it.

Evernote is another example.

Using such an app or a software will help your business and teams stay focused and perform their tasks effectively. Everyone should use a common and centralized communication channel. Everyone should know what’s happening and what is the progress of the tasks.

This becomes handy when tasks and projects are interlinked.

Similarly, document sharing must be smooth and real-time. Teams have to work on a single file at times so make sure the files and documents are shared with the entire team. Google Docs is a problem-solver here. The documents can be edited at a time from multiple sources without messing up things.

Don’t assign a manager

Virtual teams don’t work well under the supervision of a manager. Same is the case with freelancers.

In most of the cases, you just have to assign the tasks to the freelancers and let them work virtually. However, there are instances when management becomes necessary. In such a case, don’t be a rigid manager. Give them a free space. Empower the freelancers.

If you don’t, they will quit.

If you have multiple team members working together on a single project including freelancers, let them work. Don’t intervene unless necessary. The best way to get the work done this way is to link their pay to milestones and project completion. If the project isn’t completed, they don’t get paid.

They will work day in and day out to get it done.

Offer growth opportunities

Monotony is not much appreciated in any of its forms. Freelancers hate it more than anything else.

Why?

They are not used to it. They have the habit of switching the job and the employer as soon as they feel it is getting monotonous.

Allow your freelancers ample growth opportunities. Switch their roles. Don’t assign a freelancer the same task for more than a month. You have to understand the psyche of the freelancers. They are not programmed to work this way.

Let them grow. Add challenging tasks. Add more diverse tasks in their role.

Keep all this backed by pay.

Once you have developed a team of freelancers that is giving you results beyond your expectations, don’t let the freelancers leave you. Do whatever it takes to keep them hooked.

 

Resources

Freelancer sites: Upwork, Freelancers, Guru, People Per Hour, 99designs, iFreelance, Simply Hired, Toptal, Crowded, Behance.

Team communication and collaboration: Google Hangouts, Redbooth, Campfire, HipChat, Podio, Google Keep, Yammer, Slack, Trello.

Document sharing and editing: Google Docs, Microsoft office live, Ether Pad, Zoho.

 

Conclusion

Virtual outsourcing is the way forward.

One in every three individuals in the US is a freelancer. The future workforce will work from their homes. Gone are the days when people used to rush to the offices every morning.

Things have already changed.

It is time that you change and transform your business.

Start hiring employees virtually, develop winning teams, and manage your business from any place you want. This is the way forward.

If you don’t do this today, your competitors will do it and will develop a competitive edge.

Don’t let this happen to your business.

Start hiring virtually.

All the best.

 

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