Questions

How can I know when to hire someone in-house or when to outsource work?

I am launching a skincare product online and would like to know what would be the vital activities to hire for or outsource? I don't think I can do everything on my own (digital marketing, content..) At what point do entrepreneurs involve help, given the fact that there is no revenue yet.

6answers

Being an entrepreneur is more often than not, exhausting,taxing, time consuming and drains a person physically, mentally and more importantly financially.

The answer to the question "At what point do entrepreneurs involve help, given the fact that there is no revenue yet?", in your case depends on a variety of factors.

Since you're launching a skin care product online, I'm assuming that you're either manufacturing the product yourself or you've already outsourced this function. Now, that being taken care of, there are other more important things you will have to focus on, which are pretty broad, but are things which came to mind;

1.Figuring out which e-commerce sites are the best to sell your product on.
2.Setting up your banking/payments option and getting distribution in place(Tying up with online vendors).
3.Creating your brand(Logo, creatives, product images, sample videos, marketing strategy,etc).
4. In case you're planning to create your own website and push product on that, you'll need to allocate a budget accordingly for the type of website you want and get someone to build it out for you. (WordPress is a good option). (Hiring in-house is a good option as building a WordPress e-commerce site is a fairly simple and fast solution). The other advantage is that you can mange the website yourself by watching quick tutorials on YouTube.
5. You'll need to set up a customer service/support system to take care of instances where customers return the product, dealing with bad customer reviews, you'll need someone to essentially be your PR team.
6. You will need to handle operations on a day-to-day basis and overlook your affairs in totality.

While you're at a nascent stage and you can manage these broad functions, there are essential functions which you need to focus your efforts on 100% and the rest are things which can be outsourced or in-sourced (The categorization of essential and non-essential functions needs to be done by you).

You should ideally outsource or in-source those functions which you can oversee broadly but can't get involved in on a daily basis because it cuts into your vital roles and responsibilities. Personally, it's better to hire in-house and get someone to execute your decisions, rather than outsource entire functions, because again, this becomes more expensive and you will have no control over the function, as most agencies who take outsourced work will have a number of clients and unless you constantly prioritize your work by following up, chances are that things won't get done.

Stuff like building a website, managing social media, handling operations, dealing with customer support, etc can all be done by hiring 1 or 2 competent people in-house. Competent people can be taught what to do and will charge significantly less than those individuals who hold a degree or qualification. If you're worried about burning cash, offer them equity in the business rather than making huge payments to highly qualified individuals(at least at this nascent stage) because you're not yet sure whether you'll succeed or fail w.r.t. your venture. Spend money on things which will help your business grow. Don't follow the approach big conglomerates take because you're just starting out. Your sole objectives should be to firstly survive in the market and then subsequently thrive.

You should focus on ensuring that your product has visibility, creating more channels of sale, figuring out how to get distribution in place for the offline, retail space, making sure cash flow comes in, etc. You are the glue that holds your business together, outsource/in-source any function which you feel is cutting into your time but not necessarily resulting in a productive outcome.

Hope this helps.

Cheers!


Answered 5 years ago

I have had the best experience with outsourcing by either having an outsource management for Quality Assurance, or by having very detailed and articulate descriptions of what you need.

I recommend to always be looking for help in order to understand all options available, and all outsourced projects should have proper in-house/middleman leadership.


Answered 5 years ago

Do you know the skill already? Can you teach it and do you have the time? Then consider hiring.

Do you not know the skill? Are you unable to teach it or do you lack the time? Then outsource.


Answered 5 years ago

Companies often outsource to prove out a concept and then hire in-house once it's clear that skillset will yield steady revenue.

For example, clients often hire me and my team to create and manage digital marketing campaigns for a 3-6 month period, and once we prove out a consistent framework for generating revenue through specific marketing platforms, i.e. we demonstrate that if they spend $10k/month on advertising, they generate $25k in returns, the business can now justify an in-house specialist to manage this stuff.

Some companies still prefer to outsource at that point too, because buying an employee comes with additional costs: they need a desk and a computer, health insurance and benefits, etc. Contractors and agencies are a simple relationship where the cost is no more than face value and they can cut the cord with 30-day notice if something changes in the business, without having to worry about somebody putting food on the table for their family.


Answered 5 years ago

I've tried and tested multiple ways of doing this. There are pros and cons in outsourcing online and hiring in-house.

I say you go 70-30.

At the same time, whether it's in-house or full-time, what you need to establish are the systems that can ease out the workflows for you.

I have an in-house and a global team that work remotely. I don't have hundreds of employee running the entire operations, but they're productivity can even equate to that.

Remember, it's the quality of the people you hire that's important, not the quantity.

If you'd like to hop on a call, would love to share important tips and strategies for you to make this happen!

Good luck!

~Pat


Answered 5 years ago

It totally depends. First of all, you should realize that the outsourcing team is almost equal in terms of skills and tasks to your in-house team. The only difference here that outsourcing software developers don’t sit in your office and don’t chew the cookies. My advice: before hiring someone you should be clear whatever you have the ability, skills, and time to manage the team, to teach them and handle all the HR stuff. If so - feel free to hire in-house employees. If you want to do your own job and have room for strategic tasks, and you don’t want to handle the software dev team - you can hire an outsourcing company and they will do it for you.

In case if you have a project that requires more resources, and you know, that after the project is done, you won’t have a need for these additional resources - it’s definitely better to outsource.

I have a number of colleagues entrepreneurs, who totally prefer outsourcing and they are satisfied with it.

BTW, Experts predict that near 70% of companies will increase their use of outsourcing in the coming years. The reasons: fierce competition for talents, budget cuts, shrinking of the time frames required to bring a new product or update to the market, the need to focus on core business expertise, and much more.

Recently we posted an article about Hiring Remote Teams on our website. I’m sure you’ll find it useful. https://kitrum.com/blog/hiring-remote-teams/


Answered 2 years ago

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