The $100 Startup: Reinvent the Way You Make a Living, Do What You Love, and Create a New Future (31 page)
Authors: Chris Guillebeau
For every story like Jamila’s that told of partnership leading to freedom, I heard a contrasting story from someone who was much happier deliberately keeping the business to themselves, without outsourcing or hiring. Let’s look at a few examples of the different camps.
CASE 1: PRO-OUTSOURCING
The camp in favor of outsourcing can be represented with the following statements from business owners who came to view their release from tasks and responsibility as a freeing decision:
Hiring employees was my biggest challenge as a business owner. I put it off for years and turned away tens of thousands of dollars each year because I was afraid to grow. Finally, I realized that I had hit a ceiling. I couldn’t make any more money without bringing some members to my team. Since changing the structure, I’m able to accept all of the orders I had had to turn away. I’m no longer overbooked, and I can invest extra time in moving the business forward in other aspects. Do I wish I could do it all myself? I used to, because I don’t like to lead or be led. I don’t like to feel like the boss. But I am so much happier now as part of a team. I’m the pilot of my business, and my crew is there to make my work easier while fulfilling their own goals as well. —Megan Hunt (
read more about Megan in
Chapter 3
)
Our aim has always been to have zero employees in order to avoid the expense, complex legal issues, and inflexibility. However, our warehousing operation is completely contracted out—all stock receipts, storage, processing, pick, pack, and dispatch is taken care of by our logistics partners; we just send the orders. We use freelance sales agents, who are paid on commission only. We use virtual assistants for telephone answering when we are unavailable. —Jonathan Pincas (
read more about Jonathan in
Chapter 14
)
We contracted with an outside printer to make our first run of maps, and it was the best decision we have ever made. Our business would literally not exist if we had tried to print the
maps on our own. As demand has increased, our printers have been able to provide us with additional inventory. We never would have been able to print large quantities of posters while maintaining our full-time jobs and tending to a growing business. We are also happy that our business can support the work of other artisans. —Jen Adrion and Omar Noory (
read more about Jen and Omar in
Chapter 6
)
These quotes are representative of others who have all said similar things: Outsourcing increases freedom and allows a business to scale without the owners doing everything themselves.
CASE 2: ANTI-OUTSOURCING
The camp opposed to outsourcing can be represented with the following statements from business owners who believed that expansion would be difficult, undesirable, or otherwise limiting of the freedom they had achieved through the business:
I’m at the point where I need to find a way to grow my ability to respond to customer demand, but I struggle with concerns over reputation to the extent that I turn over bookings to employees or contractors. I’ve been offered partnerships, but I turn them down because either I have concerns over the quality of the partner or because the partner wants a referral commission. I could easily raise my price and provide the commission, but I know I wouldn’t be happy working for less. And thus I haven’t grown further, though I’m comfortable with that for now. —Gary Leff (
read more about Gary in
Chapter 3
)
I actually prefer not to work with contractors, employees, or assistants. My business succeeds on the fact that it is
intentionally small. I can fit my whole business into a backpack and take it wherever I go—no office, no stationery, no administrative staff. Keeping my overhead to zero has lowered the risks and kept profits high. —Adam Westbrook (
Adam operates a design services business from the United Kingdom
)
I’m big on keeping the company lean and mean. I’m the only employee, and I work out of my home. We used to own a retail business where paying rent, insurance, and twelve employees came ahead of our own paychecks. Those days are over. Simply put, I don’t like getting paid last. —Jaden Hair (
read more about Jaden in
Chapter 2
)
My experiences with outsourcing work to remote contractors left me spending nearly as much time managing the work as it would to actually do it myself. I’ve yet to find a nice balance of being able to hire someone to work on a project and making a reasonable profit without spending too much time on it myself. —Andy Dunn (
read more about Andy in
Chapter 11
)
My motto: Never have a boss and never be a boss. Since age twenty-two, this has been my situation. I have an accountant, because number crunching is my biggest weakness. Otherwise, I am a company of one. I can always vouch for my own work, and my integrity means the world to me. —Brandy Agerbeck (
read more about Brandy in
Chapter 7
)
As with the pro-outsourcing camp, these quotes are representative of many others. Lee Williams-Demming mentioned that her importing business formerly had five employees and hundreds of overseas suppliers. It now has only one employee and a smaller
supplier network. “Trust me,” she wrote in an email, “we’re better off in every way with a much smaller team.”
Although I know it’s not the best fit for everyone, I tend to fall into the anti-outsourcing camp in my own business. Instead of sending out projects to everywhere, I’ve chosen to keep a very small team and do only limited contracting with outsiders. The first argument for outsourcing is that it allows you as a business owner to “do more of what you love” while assigning unwanted tasks to someone else. But outsourcing can create greater problems, and you can construct your business in a way in which few of these tasks are actually needed in the first place.
More than once, I’ve heard from colleagues who say they have a fantastic virtual assistant they’d be happy to recommend to me. Then, weeks or months later, I hear they’re looking for a new one. “What happened to so-and-so?” I ask. “Well, they were great … at first. But then the process broke down, balls were dropped, and we had to part ways.”
This is a recurring story, told many ways but with the same end result. There are certainly exceptions, but many capable people who work as virtual assistants often end up deciding they’d rather be running their own show. If you have to spend your time correcting problems caused by the team created to support you, the team hasn’t really improved your life. Meanwhile, it’s clear that others have definitely benefited from harnessing the “get other people to do your stuff” wave.
With such divergent opinions, how do you know which path to follow? Thankfully, it’s not that complicated. The answer to the question of whether outsourcing is a good fit depends on two things: (1) the specific business and (2) the personality of the business owner.
Many of the problems people experience with outsourcing (on
both sides) can be avoided by having a clear understanding of the responsibilities that a contractor or assistant will have. In a business that relies on a series of relatively mindless, repetitive tasks, for example, outsourcing may be a good option. A business that relies on customer relationships, however, may not be a good fit.
Your own personality also matters, because if you’re building a freedom business, you want to find the best possible solution to match your vision of freedom. For some people, that involves traveling the world on a low-overhead operation, with the money from the business primarily going to support the owner. Other people want to stay in one place and build a team, creating a business that will outlast themselves. In the end, the best answer to the outsourcing question is the same as many others: Do what makes sense for you, not for someone else.
Before we move on, let’s look at a couple of other forms of getting help. “My entire business is a product of extremely beneficial trades,” says Brooke Snow, who traded music lessons for photography lessons before going on to teach photography herself. She also traded for website design, video footage, and tech support. “These trades have saved me tens of thousands of dollars and have not only transformed my business but are in many ways some of the very reasons I have a business. It has allowed me to operate completely debt free with low financial investment, low overhead, and a high rate of return.”
Several respondents mentioned that other tasks were “outsourced” to family members. After every $1,000 milestone in Eleanor Mayrhofer’s stationery business, she makes a special dinner for her husband, who helps out with bookkeeping and programming. Nathalie Lussier mentioned that hiring a housecleaner made a big
difference in her productivity. “Although that might seem trivial,” she wrote, “it was actually key to realizing how important it is not to try to do it all myself all the time.” Jonathan Pincas wrote in with a last-minute correction to his earlier comments on outsourcing: He wanted to note that his mother gets the mail twice a week in England and then scans it to forward it electronically.
The Business Audit
However it is structured, a good business needs nurturing and continuous improvement. As your project grows, take some time to look at each aspect of it, especially any public communication that customers review while making a purchasing decision. Answer these questions and think about how you can improve. The goal is to (1) fix little problems and (2) identify small actions you can take that will create significant results over time.
“WHERE DO YOU MAKE MONEY?”
Once a business gets up and running, it’s very easy to get trapped in all kinds of things that have nothing to do with making money. The solution is simple: Focus on the money. In the audit, you’ll want to look at where the money comes from and determine what you can do to keep it coming. Sometimes new opportunities present themselves; sometimes there’s an easy fix you can make to turn on another tap. If you have a range of projects, products, or activities, it’s almost always better to devote your efforts to the strong performers than to try and pull up the weak ones. Most people do the opposite, but if your goal is for everything to be average, that’s the best you’ll ever get.
“HOW GOOD IS YOUR MESSAGING?”
The marketing materials you use, whether online or offline, probably involve some use of words, known as
copy
. Go back to the beginning
and read the copy carefully. Review each page of the sales material slowly and then read it out loud. Does it still present the message that you want? What information should be culled or revised?
“ARE YOUR PRICES WHAT THEY SHOULD BE?”
When was the last time you raised your prices? You can have a sale or give out discount codes from time to time, but like all businesses, you should also plan on raising your prices on a regular basis as well. Always remember that trying to price for “everyone” is a business death trap. Since business owners live or die by the free market system, the way you decide whether your pricing is fair is by asking another question: Are people buying what you sell? If the answer is yes, you’re on the right track. If it is no, you have a problem.
“HOW ARE YOU MARKETING TO EXISTING CUSTOMERS?”
One of the best things you can do is reach out to existing customers and find a way to meet more of their needs. As part of this examination, you should check your postpurchase process carefully. What happens after someone buys? Do things get sent to the right place? Does everything arrive in the buyer’s in-box or physical mailbox as it should? If you sell consulting, do clients know exactly how to set up a time in your schedule after making a payment? The easier you can make all of these things, the better.
“ARE YOU TRACKING, MONITORING, OR TESTING ENOUGH?”
The thing about testing is that you just don’t know what’s going to happen until you do it. That’s why you test! Once I installed an upsell offer in which customers could get a $50 gift certificate for only $25 after making a purchase. I thought it was a killer offer, but my customers didn’t think so; it was accepted only one out of twenty times (5 percent). A good upsell can convert much better than that, so out went the gift certificate offer.
“WHERE ARE THE BIG MISSING OPPORTUNITIES?”
Having a big opportunity doesn’t mean you should pursue it. I pass up a lot of things because they aren’t a good fit for my overall strategy. However, it’s good to know what you’re missing even if you’re missing it deliberately. Keep your “possibilities list” updated so you can follow up when you have more time or if you need more money.