When should you hire, and when should you outsource?

There comes a moment in the life of all entrepreneurs when they discover they simply can’t do it all. The next revelation is usually that they actually aren’t very good at several things connected with running, managing and growing a business.

The smart ones connect the dots and figure out how to get things done by leveraging their individual talents to do the things they do well, and engaging others to take care of the things that aren’t in their wheelhouse.

When business owners get to the place where they’re sinking, usually their minds jump directly to hiring employees. But there are many ways to engage the help of others. Making smart choices between hiring your own employees versus engaging the talents of outsourced experts can make all the difference to your business results.

The Six Disciplines

There are generally six baseline disciplines involved in running every business:

1. Accounting
2. Sales
3. Operations
4. People (which is more than pure HR)
5. Product or service development and delivery
6. Administration

When you start out, you’re almost always wearing all six of those hats. But, if your business is growing, do yourself a favor: You aren’t going to be able to keep pace with all that growth and be effective if you don’t have a game plan for how you’ll manage future work. The businesses that fail are generally the ones where the entrepreneur tries to do it all, with poor or business-burying results.

Even if you don’t have an organizational chart that looks like Jobs A through F above, your business is still actually functioning that way. Chances are, of those six disciplines, you might only be good at one or two. More importantly, though, there are probably a fair number of them that not only aren’t you good at but you don’t actually enjoy—not even a little.

You don’t have to be good at all of them, and for those that you aren’t good at or don’t enjoy, there are always cost-effective options to get you the help you need that will do a much better job in a shorter period of time.

Advice for Meeting Your People Need

First, analyze which of the above disciplines would actually be a full-time job within your organization. Hiring employees is an expensive proposition; for most companies, payroll is the largest expense. Utilizing payroll dollars wisely is essential.

Second, please don’t fall prey to the “I’ll hire someone for the office to take care of accounting, admin, people and operations.” Each of the six disciplines is just that—a discipline—and to be handled effectively, they demand a person with expertise in those areas or they will fail.

If you’re hiring the Jack or Jill of all trades to manage multiple functions, you’re actually just hiring “Mini-Me.”
Just like you, that person isn’t going to be able to get it all done, let alone get it done effectively. And just like you, they’re probably not going to be experienced in or good at a couple of them.

Maybe for your business, accounting and admin require a full-time job, but unless you have the ability to hire someone with solid operations or people experience, adding those functions to the job description of a single employee is really selling your business short. Hire the accounting and admin person, but outsource the two disciplines of operations and people to experts who can take care of them for you.

Then there’s the cost factor. The hourly cost of an outsourced expert can sometimes cause an entrepreneur sticker shock.

But I challenge you to think beyond that for a moment. Choosing to do it all yourself, or hiring someone without the requisite skills, is far more expensive than you might think. While you (or an inexperienced hire) is handling things outside of your comfort zone, what other things are falling by the wayside? Handling things incorrectly also causes waste and rework. In the arena we work in, people, it can also result in huge liabilities. Stop for a minute and figure out what that could cost you.

Last but not least, if you’re focusing on areas outside your expertise—tasks that you aren’t good at and don’t particularly like—what opportunity costs are you experiencing because you’re too tied up to capitalize on your God-given talents?

Efficiency in leveraging your talent options is the most important thing you can focus on in business to achieve profitability. Understanding how to get the best help at the best value for your business is a significant way you can achieve success earlier, faster and with less stress and liability.