Should You Outsource or Do It Yourself?

One of the biggest lessons that I’ve learned as an entrepreneur is how to outsource strategically. Ask yourself these questions to assess your needs.

June 15th, 2015   |    By: Ritika Puri    |    Tags: Management

As entrepreneurs, time is our most valuable asset. Every moment spent on a time sink is a distraction from the strides that we could and should be making with our core businesses.

But here’s the thing. Early-stage entrepreneurs are also notoriously cheap. Often revenue-strapped, we’re pumping as much money as we humanly can into the products and services that we’ve committed ourselves to developing.

At any given time, we walk a line between two things: spending money and doing more ourselves. As many of us will tell you, this is not an easy line to walk. I once burned through $20K on a vendor that I shouldn’t have hired. I also spent 15 hours a week on administrative tasks when I should have been working with an administrative assistant.

Should you outsource or should you do it yourself?

One of the biggest lessons that I’ve learned as an entrepreneur is how to outsource strategically. This process is less about the capabilities of our vendors and more about us – and our own shortcomings. You can figure out when and whether to outsource by asking yourself the following questions:

Am I tackling something that’s completely over my head?

When it comes to security, taxes, and IT, I have no idea what I’m doing. Actually, that’s a slight overstatement. Now that I’m six years into my business, I know what I need to watch out for in terms of compliance, legalese, and all the areas in between. When I started, however, I needed a guide who understood these areas better than I did.

Instead of risking a business critical mistake, I hired vendors to keep me afloat – and educate me. Thanks to this decision, I was able to grow my core business and rest assured about everything else.

As I become more informed, I continue to work with my vendors and partners. At this stage of my business, the benefits of outsourcing dramatically outweigh the costs associated with doing everything internally.

Can my vendor help me achieve ROI in ways that I cannot?

Running a content marketing business, I’m a stickler for information design. I’m passionate about ensuring that everything that we create looks awesome. That’s why I work with a designer to make everything that I create look beautiful. Thanks to her, my work is exponentially better, and more importantly, I’m a much smarter human being.

The lesson that I’ve learned from my designer pertains to every area of my business. As I transition my company from a service-based to product oriented company, I know that I’m going to need technical infrastructure to support that growth.

Even with a CTO and co-founder on board, I’m going to look outside before developing anything internally. The reason why is simple. Technology-based vendors see the same challenges and pain points, over and over. They see trends across companies that we, as founders, simply can’t. When it comes to choosing infrastructure that protects and empowers our customers, I’m not willing to take any chances.

Am I spending time on something that’s holding me back?

An alternative way of framing this question is: Do I completely suck at this horribly redundant activity that stops me from growing my core business?

It’s this question that made me recognize my need to delegate any and all things administrative. I do not touch my taxes, and I have a calendar overlord to make sure that I arrive at the right meetings, on time. She is also my copy editor who proofreads my work when I’m tired, and she helps me with data collection and research.

When she invoices me, I leap for joy. She accomplishes administrative tasks much faster than I ever could. Because I can now focus on initiatives that move my business forward, she’s actually helped my company become more profitable. Her services are more than a line-item expense.

The lessons that I’ve learned from delegating admin work are applicable to any and every business decision that my co-founder make. If we anticipate that something will be a time sink, we delegate.

It’s clear-cut.

Entrepreneurship is the most grueling of grueling career choices. We need to be 100% focused on creating value. If we’re working on something that leaves us uninspired or holds us back, we’ll kill our morale. It doesn’t matter whether we’re dealing with technology, infrastructure, legal services, web design, administrative tasks, or anything else.

We need to keep our energy levels high. Or else.

Final thoughts

As entrepreneurs, we live and die by our decisions, and we can’t reject costs without looking at the full context. Even when our emotional instincts tell us to ‘do it cheaply,’ we need to think with our heads. A mentor once told me that it’s always better to focus on making more money than penny pinching. Of course, we don’t want to throw money away – we need to choose our vendors and investments wisely. The decision-analysis framework can help.

About the Author

Ritika Puri

Ritika Puri is the Co-Founder of Storyhackers. She is a sociologist who writes about interesting people, processes, and ventures. Additionally, she is building a mixed martial arts curriculum.

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