Hidden Costs of Doing Things You Shouldn't Be Doing

Outsourcing is a much discussed topic but I rarely see it focused on the primary strategic issues facing a small business owner. What I too often see is “Outsource and save money”. This is rarely true. However, what I think the outsourcing industry should market is….”Outsourcing = spend more money and make even more money.”

When I talk to business owners I ask them “what does your business do best?” I get all kinds of answers, some make absolutely no sense. I once had a guy who owns a auto repair shop say “I have a great website”. My reaction… what??? I may look at things differently but I’d prefer that my auto repair shop was best at…well, I know you see this coming, I’d like my auto repair shop to be best at auto repair.

But in other instances I get business owners with the right answer but….

For example, I asked a staffing business owner what her company does best and she says “we’re really good at matching the right person to the right job.” That makes sense. So then I ask… “In what area does your business need the most improvement?” Her answer, “sales”. Makes sense, so then I ask, “What area of your business do you spend most of your time in?” Her answer “bookkeeping and accounting”. What???? I see this all the time, all the time. The business owner knows what they are good at and what they need to improve but they spend a very scarce resource, their time, doing things that don’t contribute to the improvement of the business in any strategic sense.

Business owners who spend time on “non core” activities think they are saving money but they aren’t. What they’re doing is making themselves feel good by being busy.

The reason to outsource is not solely to save money because often times it’s hard to see a dollar for dollar return on peoples time when outsourcing. But what outsourcing does is a) provide more professional, complete and reliable task accomplishment and b) frees up the scare resource of owner time so that the small business owner can concentrate on perfecting what the business does best and improving on the core areas that need improvement.

Want to have a better business that is more focused, more profitable and easier to operate? Try smart outsourcing.

Soon I’ll add a post on how to begin the analysis of what you should outsource and what you should control directly.