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Outsourcing Your Business - When is The Right Time?

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Posted 15th August 2008 at 07:38 PM by Gary Huynh

If you have a growing business there comes a time when you
need to outsource tasks in order to maintain growth.

In fact, there are some activities which necessitate being
outsourced because you may not have the skills required.

What we're trying to figure out is when to begin
outsourcing.

If you begin outsourcing at the wrong time, it could hinder
your growth and cause more problems.

A lot of people make the mistake of waiting too long to
outsource.

By waiting too long to outsource, you could lose the
motivation to work on your business. If you have to do
everything yourself, it gets pretty easy to become bored
and complacent.

If you find yourself doing the same activities over and
over again then you must figure a way to systematize your
activities and then hand it over to a qualified freelancer.

By creating a system to optimize your work flow, you will
reduce your outsourcing costs. An optimized method of doing
things will speed up the production of your outsourced
project. If you're paying by the hour for a virtual
assistant you could greatly reduce your costs.

Something else to consider before you outsource is your
profit margin and the value of your time.

While outsourcing can cut into your profits, it can greatly
increase your productivity, allowing you to scale your
business.

Let's say that you can consistently make a profit of $200
while working on an activity for 4 hours. Let's say that
number is an average profit for 4 hours of work.

When calculated, you're making $50 an hour. If you can pay
someone to duplicate your process for under $50 an hour
then you're making a profit.

Of course, when you're first teaching your process to
someone it will take them some time to learn at first. Once
they learn the process, they can complete it faster and
increase your profit margin.

Let's recap what we've discussed thus far.

Before you begin outsourcing, you should optimize your work
flow by creating a system that is duplicatable by someone
who has little to no knowledge of your system.

You should also write down the amount you make per hour
doing things yourself. This way you know how much to pay
freelancers to take over your work.

By outsourcing at the right time, you will substantially
increase your volume of work and not lose motivation in
your business.
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