Outsourcing is a concept that major companies use to save money on routine, rudimentary, or otherwise cost intensive tasks. The thing is, you can do the same.
If you have home based income, or run your own business, you know that time is money. Even if you just work for a salary, you might want more free time. Outsourcing can help. You can do some things offshore, but it might make sense to do some things locally.
Before getting into the examples, they key concept is to figure out how much your time is worth. You have to be realistic here. For ease of illustration:
$25 per hour = $200 a day = $1000 a week = $4,000ish a month = $50,000 a year.
If the item you are outsourcing costs more than what you can earn in an hour, it is worth outsourcing. Otherwise, do it yourself. In the business world this is also known as Cost Benefit Analysis or CBA.
That said here are some ideas.
Top Five Items for Personal Outsourcing.
- Lawn Care - This can be anything from basic mowing to full blown landscaping. If you live somewhere it snows, contracting a snowplow service. You might want to do a CBA on installing an automated sprinkler system. For a bargain, see if you can recruit the neighborhood adolescents to do the mowing and the raking. If you own pets, there are even teenagers willing to scoop poop.
- Laundry - You don't even have to take things to the dry cleaners. There are laundry services that will pick up your dirty clothes and bring them back clean and pressed.
- House Cleaning- Even if it is just once a month, there is something nice about taking a break from the constant upkeep of a home. Especially for all the stay-at-hom moms out there. Again, you can get any range of services, from the local single mom trying to make ends meet with an ad on Craigslist, to top of the line srevices.
- Groceries - The internet is a wonderful thing. Place like Coborns allow you to shop online, and have your groceries delivered to your doorstep. There is a little bit of a premium on the proces, and a delivey fee, but again, it could very well be worth all the time it takes to drive back and forth from the store, deal with all the cranky shoppers, and so on. Also, the grocery websites keep your history, so if you usually buy thesame things, it takes even less time to stock up on the essentials.
- Pet care/child care (don't completely dump your kids and critters to someone else, but if you have a really busy time of year, it might make sense to have a temporary nanny or dog walker) This last one is a bit controversial, but in some instances it makes sense.
Other ideas include cooking, running errands, and other house projects. You could even get someone in India to find the best place to eat dinner tonight!
If you want to get even more technical, add in all your other expenses (buying equipment, maintaining equipment, utility costs, etc.) Also consider opportunity costs and peace of mind of stress free living.
For outsourcing tasks for businesses, consider these examples:
- Property Management (for landlords)
- Online marketing including SEO related items
For more ideas on how to make your life look more like a business, you have to check out Rich Dad Poor Dad by Robert Kiyosaki.
Finally, when outsourcing, be careful. You want this to save you time, not add to it. A painful outsourcing experience will give you a bad taste for the concept and probably deter you from it ever agin.
So here are a few tips when considering outsourcing:
- Don't always look for the cheapest, look for the best value. Quality of service is very important here. There are plenty of unskilled folks out there that would only provide marginal service. If you want the job done right, do your homework. Get references.
- Be specific in your requests. Don't say "Go mow the grass" when you want it cut at a specific height, in a particular pattern, and then all the grass clippings bagged and placed at the curb.
- Understand local laws and tax implications. Consult an accountant if your are doing this as part of your business. Know who you are hiring and whether or not you need to collect a W9.
For other real life examples, in 2007, the WSJ tried to outsource a few services.
- Designing a softball team logo cost $175, and they had favorable results, but specificity was key.
- Doing some basic wedding planning (sending invites, managing a guest list) only cost $9
- Designing a personal website was $125 and again required detailed instructions
- Creating a kitchen remodelling plan at $250 was determined to be a worse deal than going to a big box hardware store where a similar product was done at half the price
- However a large backyard gardening and landscape plan did prove to be cost effective at $5/hour
- Tutoring was $20 session and can work great if the student is willing to be friendly and build a relationship with their tutor.
In conclusion, take some time to evaluate if you can outsource something, it my well be worth it. Or outsource your list of items to outsource!