The Outsourcing Rule Every Startup Should Know

Startups are basically perfectly positioned to outsource. And as a developing company, there typically isn’t a ton of money floating around for outsourcing the basics. You prioritize and decide what you can’t absolutely do on your own, and hire the rest out to experts.

As a general rule, when the amount of money spent on outsourced help reaches about one-half or three-fourths of what the wage for an employee would be, it’s usually time to hire one. It’s not a 1:1 cost ratio, the time you invest in an employee is an investment, vs. a one-time bill from your hired help. But again, necessity wins out in the early stages of a company’s life.

This “outsource if we absolutely have to” pattern is common in a company’s infancy. As it grows, the big stuff will be handled in-house. But that doesn’t mean everything should be handled in house. Especially if there is rapid upward growth…certain tasks are too hard to scale past a certain point. If there is high demand, your product’s viability depends on meeting that demand and beyond. This is when it makes sense to outsource – big stuff and little stuff.

The specific things that should be outsourced will vary from company to company. Having an idea of the types of things you know you’ll want to outsource will set you up for success when it’s time to cross that bridge.

And even though crossing that threshold in your business where you move into large amounts of outsourcing can be intimidating, look at it as proof of your success and growth.

Welcome to the Outsourcing Club – I’ve been waiting for you.

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(NOTE: It is highly recommended that you take my FREE 60 Second Outsourcing Test to find out if you’re ready to make more by doing less. Click here to learn if you’re ready to outsource in just 60 Seconds!)
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