Expensive Outsourcing Saves Money

By Gail Doby, ASID
CVO & Co-Founder, Gail Doby Coaching & Consulting & Design Success University

Every businessperson knows the old maxim, “You have to spend money to make money.” That seems obvious when it comes to things like paying for advertising, entertaining prospective clients, or investing in the proper equipment and tools to make your job easier and to get better results.

Nonetheless, designers I counsel often are resistant to the idea of outsourcing some of their tasks, even when I assure them it will save them money. “Why should I pay someone to do what I can do myself?” is the usual response. Why indeed? Let me explain why outsourcing is just another way of spending money to make money, not throwing money down the drain.

Time is a finite resource, and we all know time is money. How much is your time worth? I don’t mean just what your billing rate is. In total, how much is your time worth to your business? If you are a solopreneur or have a small business with perhaps one other full- or part-time employee, chances are you not only do all the design, purchasing and project management work, but you also do all the marketing and client management as well. In short, you are the only one bringing revenue into the business.

Assuming you are billing at somewhere around the industry average of $100 to $125 an hour, how much additional income would you gain over the course of a year by paying a bookkeeper, office manager or freelancer to handle tasks that (a) you don’t have time to do properly, (b) are perhaps not qualified to do or do not do well, and/or (c) you put off doing because you don’t like to do them? If you are able to bill an additional 6 hours for every 10 hours you outsource, at the average rate for such services (which are much lower than your billing rate), you still come out way ahead.

Why are you only billing 6 hours for every 10 you outsource? Because you have administrative tasks you need to attend to, which don’t bring in revenue. However, if you use part of that time to market and develop new clients, and you’ve opened up more design time in your schedule, you can increase your number of projects. If you added one new project a month, or every six weeks, how much additional revenue would that add annually? So now, you’ve just doubled your return on your investment—more time to bill and more time to take on additional projects.

Are you getting the picture? When you outsource, you are spending money so that you can make money, because the only way you can make more money is either by raising fees (which is not so easy to do these days) or freeing up more time for the activities that bring revenue into the business. How would you rather be spending your time, on things you don’t want to do that cost you money or on things you like to do that make you money? I know which one I’d choose.

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