Outsourcing 101

The word outsourcing is often a bad word in North America. When people hear it they think of people losing their jobs to someone oversees. However, how much does everyone really know about outsourcing?

Outsourcing is essentially contracting someone out of the business to do something that had previously been done within the business. So, two organizations enter into an agreement that involves the exchange of services and payments. Companies these days can outsource to contractors within the same country, or to other businesses in another nation in an effort to save money. This is called offshore outsourcing and it is very popular among larger companies.

So, why does a company choose to use outsourcing?

1. The first reason is that it is cheaper. The overall cost for the service to a company is much lower because they can either pay less, or not have to pay benefits. By using off-shore outsourcing, companies can pay the workers there a fraction what they pay workers in the developed world.
2. The company may want to focus on its core business and therefore leave everything else to outsourcing. For example, the company may want to focus on making paper, so it outsources its customer service to another customer service company.
3. A company may want to restructure its cost structure. They may want to balance the ratio of fixed and variable costs by moving things outside the company.
4. Sometimes outsourcing is done in an effort to improve the quality of the service or product of the company. If the company makes computer chips and does not have good customer service, they may outsource the customer service to a company that has better customer service.
5. The company may want to get access to another talent pool, which can help the company in the long run.
6. The company may use outsourcing as a way to enhance the capacity for innovation within the company. The company will use external knowledge service providers to help the company.
7. The company may want to use outsourcing as a way to deal with risk management for some risks, and an outsourced company may be able to handle those risks better.
8. Some companies will use venture capital as a way to outsource because some countries match government funds in venture capital with private venture capital for new businesses starting up.
9. There is a tax benefit for companies who outsource sometimes. Countries offer tax incentives to companies who move their manufacturing operations to another country.
10. An outsourced company is often better able to manage the increase or decrease in production, making it easier for a company to make money.
11. Some companies, especially for small businesses, there is the desire to outsource work so that work-leisure time can be maximized and balanced. By having someone else deal with computer issues, the business owner does not have to deal with it themselves.

In some cases outsourcing can be bad, but in other ways it can be very beneficial for a country and a company.

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You Can’t Afford Not To Have A Virtual Assistant

I have outsourced a good chunk of my tasks before; however, those were nowhere near having a virtual assistant.  Those outsourced tasks were done on a one-time basis only by independent contractors and most of the time I have not met those individuals again. I have thought of hiring a VA (Virtual Assistant) before, but I was reluctant due to costs associated with it. However, just a few days ago, I was able to hire a VA at an unbelievable cost, and it does not make sense not to hire at this incredibly low rate. You just can’t afford not to hire anyone and enjoy your free time, or use your newly discovered free time for something more productive.

Today, I am going to tell you how you can hire a VA even if you don’t make a killer monthly income.

Which Sites To Use?

There are many sites online where you can hire VAs at incredibly low rates. To browse through all these sites, do a search by entering these keywords: virtual assistant, outsource, freelance, etc. The site I use to hire my VA is oDesk. This is one of the most cost efficient sites to hire someone at low rates. 

How Much Will The Cost Be?

At oDesk, you will be able to hire someone at below $5 per hour. I have hired assistants at $1-$3 per hour in the past. Don’t underestimate these virtual assistants because of their low rates. These are highly qualified, educated individuals in their respective fields. Many of them

hold Masters degrees and speak and write English better than many native speakers. 

How Can They Work At Such A Low Rate?

They can afford to do it because these individuals are working from low-cost countries such as Philippines, India, East European countries and so on. With these low rates, they are able to make a decent living – which is unthinkable in Western countries.

How Do I Do The Actual Virtual Assistant Hiring?

Use these simple steps to have your first virtual assistant:

• Create an account with www.Odesk.com
• Verify your credit card
• Post a job
• Pick and interview a few candidates among the many who will be replying to the job you posted
• Hire the most suitable person who fits your specifics

What I Like Most

oDesk provides some unbeatable features, such as:

• You set and control how many hours your VA will work
• No additional headaches: oDesk does all the admin work such keeping track of hours, billings, and payments for you
• Pick hourly or fixed price jobs
• No commitment. You can terminate your assistant or end an assignment anytime you want

The Internet has revolutionized everything. Virtual marketplaces like oDesk provide endless possibilities for entrepreneurs and service providers across the globe – which was not possible just a few years ago.

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Outsourcing Can Benefit Your business

Outsourcing has grown in popularity in the last couple of years. For a long time, it was something that was the sole preserve of companies who had specific funds for paying outside contractors to do things that were outside their skill sets – for example if a company specialized in one field, such as sales and marketing, they would outsource things such as cleaning and IT solutions. However, among other things, the Internet has now made it more possible than ever to run a business from your home as an individual. In addition, with all business people aware of the old maxim, “time is money”, there are more and more things that the individual has found can be best addressed by outsourcing.

Outsourcing itself covers a very broad range of services that are best divided into two sections: Business and Non-Business needs. The difference between the two sections is more or less self-explanatory. Suffice it to say that Business needs are things connected specifically with the service that you, the business owner, requires in order to keep the business running – these include such things as web design, accounts and sourcing required items and services. Non-Business needs are more connected with personal or household tasks that take time that could be used to deliver what is required from you by your customers. This includes things such as cleaning and other essential chores.

There are very few tasks that cannot be outsourced in this day and age. As a business owner, it is for you to decide whether outsourcing is something that you wish to practice. In order to make this decision it is worth auditing what your daily routine involves, where you can make changes and where you wish to make them. If you feel that you are best served by having all your time free to concentrate on delivering what is required of your business, the chances are that you would be best outsourcing as much as you feel comfortable with. You probably do not much enjoy cleaning and tidying, for example. And depending on your arrangements you can end up spending a couple of hours a week at the task, which in turn can lead to lost opportunities to build and serve a customer base. Therefore, you should then ask yourself whether that task is a productive use of your time. If the answer is “no”, then you can look to outsource your cleaning to a specialist.

Business needs are, if anything, more crucial. If your specialist area is – taking an example – accountancy, then there is every chance that you are not the world’s best web designer. Nevertheless, an attractive, easily navigable website with user-friendly interface is more or less essential for an individual businessperson. In this case, handing over the task of designing a website makes all the sense in the world. It won’t come cheap if you are using a top designer, but if you cost the process based on how much business a good website will send your way (generally a very large amount), then it can pay for itself several times over.

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How Much You Should Be Spending On Outsourcing

If this is your first time here, You may want to subscribe to ADJ via RSS. If you are reading this page via RSS reader, you can visit the main page here -Canada’s Personal Finance Blog

After writing my first outsourcing article, I have come to realize that there are just simply too many people looking for information on outsourcing. Look on the top right, for instance. You see, the number one all time popular article on ADJ is on outsourcing—and looks like it will stay there for awhile. To answer the many other outsourcing questions you may have, I have decided to write more posts on this subject. Today, I will give you my opinion on how much you should be spending on outsourcing.

If you are willing to spend any amount on outsourcing, you could go ahead and do it but it would not be a good personal financial decision. When I outsource something, monetary value is very important to me and I would not outsource anything unless I am totally satisfied with the money I am spending.

But how do I know I can afford to outsource? I use a very simple formula. First, I look at the whole project in terms of how much time I would spend to do the same thing. Let’s say I would like to outsource the chore of replying to all my emails. I spend 2 hours daily replying to my email. If, for example, my salary is $10 per hour, I would therefore be spending $20 of my time daily replying to email. Now, what’s a reasonable amount for me to spend if someone else is doing it for me? Simple—it has to be lesser than 1/3 of my own cost doing the same thing. In the above email example, I would only outsource if I could find someone willing to look after my email for less than $7 a day.

This is just how I do things and you don’t have to follow my formula step-by-step. Come up with your own figures that make sense for you. One thing you need to keep in mind: there are some projects on which you will not be able to put monetary value by comparing it with your own hourly rate. These projects are those which need to be done regardless of costs, such as redesigning your website, producing a professional-looking eBook from your word document, etc. For these types of projects, I recommend that you post your projects on more than one outsourcing site and pick the one with lowest cost. Read my previous outsource article to obtain a list of outsourcing websites.

I hope today’s article will help you figure out if outsourcing is for you and what you can afford to spend on it. I’ll be writing more on this topic in the future, so keep checking back. Don’t forget to bookmark this site for later use.

Outsource Your Life Now – Here Is How

If you are reading this page via RSS reader, you can visit the main page here – Canada’s Personal Finance Blog

Outsourcing daily tasks is not a new idea. However, Tim Ferriss, author of “The Four-Hour Workweek,” has made this popular by mentioning it in his book. Ferriss uses “a small army of virtual assistants” for everything he can think of – as he mentions in his book. What can you outsource these days? Let me answer this little differently by asking what you can’t outsource these days? The following list should give you an idea of what people are trying to outsource (NB – Don’t laugh. This is a real list from DoMyStuff.com )

• Help me armwrestle

• Repair my broadband connection

• Design my website

• Personal shopper

• Pull weeds in landscaped beds

• Choose my cell phone plane based on the phone

• Reform my life

• Pick me up a t-shirt from College Corner

• Research my house history

• Unlock iPhone or Blackberry to work on Helio

These should be good enough to give you an idea. If you are thinking only celebrities, professionals and rich people can afford outsourcing, think again! The Internet growth has created lots of outsourcing sites, and they are becoming affordable enough to indulge you in the luxury of not to do anything.

Today, I am going to review some of these outsourcing sites for you. There are too many sites out there, and I am going to mention only those which I have found easier to navigate with a clean layout. If you are interested in finding more, search on Google for these: outsource, virtual assistant, freelance etc.

GetFriday

A Bangalore-based (India) company. Currently this site is the busiest outsourcing site. GetFriday offers three pricing options: Pay As You Go, Monthly Plans, and Task Based Plans. Pay As You Go Costs $15 per hour with a monthly admin fee of $10. Basic monthly plans start at $120 a month for 10 hours.

https://getfriday.com

The Canadian Virtual Assistant Network

This is the only Canadian site I have come across. You can submit profile, interview, and hire a VA through this site. Site does not mention fees and charges. There is a Directory of VA by province which you can browse.

http://canadianva.net

DoMyStuff.com

DoMyStuff is an online marketplace where you can hire freelancers to work for you. Freelancers can pick up projects and independent contracting jobs. You need to post your tasks and freelancers will start bidding on your tasks. You can limit or pick bidders based on location, fees, ratings and so on. Payment system is very safe. You never pay (or freelancers never receive payments) directly. Once you choose the best bidder, you will have to forward payment into an online escrow account. No one will have access to this money while your work is being done. Once completed and you are satisfied, you will release the funds to the freelancer. DoMyStuff has a clean interface and easy to navigate. This site is all free; free for both employers and assistants. There are no monthly or transaction fees.

http://www.domystuff.com

Guru

The world’s largest online marketplace. Employers can use this site for free but freelancers pay quarterly fees. There is a minimum bid set at $25 per project. Guru’s open auction system works the same way as DoMyStuff.

http://www.guru.com

Elance

Elance is famous for small to mid size business. I find Elance a little bit expensive. However, their service quality is very good.

http://www.elance.com

Two other sites worth mentioning: FreelancerNow.com and RentACoder.com.

The Internet has revolutionized the way we do everything. We are online a lot these days and it makes sense to hire people via net to free up our time. These freelance sites have opened up endless opportunities to find work for qualified professionals beyond locall boundaries. The ability to work from anywhere in the world is a reality now

Related Post - Can You Afford To Outsource?