The start of a new year brings with it a variety of emotions—excitement, longing, trepidation. And for small business owners especially, the start of a new year is often the time to reflect anew on that nagging question: “How the heck am I going to get it all done?” Therefore, January seems like an opportune time to explore the role that delegating plays in a company’s growth.
In a previous blog, we wrote about how business owners either share responsibilities or become a huge bottleneck, and we defined some key areas for laying a successful foundation, such as preparing yourself mentally, considering where your time is best spent, and delegating responsibilities versus tasks. At the conclusion of that blog, we emphasized the need to find the right person to whom to delegate. So, let’s explore this further.
Hiring vs. Outsourcing
The first question that comes to mind when looking to offload work is do you hire someone or find a contractor? We often advise clients in this way: if you’re looking to delegate responsibilities that are essential to the business, then bring someone in house; if you’re looking to delegate responsibilities that can be done separately from the business, then outsourcing is a good option.
For example, an architecture firm would not outsource design, because this is the expertise the company is known for and importantly the expertise that its clients pay for. The firm could however outsource its bookkeeping function because this is a concrete and distinct chunk of work that can be done separately from the core business. Similarly, we work with a client who owns a successful executive coaching business. While she does bring on contract coaches, she preserves the core business by maintaining control over her signature process and by managing the quality delivery of services.
The Advantage of Outsourcing
As in the example above, bookkeeping is often an area that small business owners outsource, as are HR, IT, accounting, legal, marketing, etc. What makes these areas particularly well suited to outsourcing is that each one represents a clear-cut piece of work, and these vendors bring with them specialized expertise.
Back to our bookkeeper example; this person knows the industry (oftentimes from multiple client perspectives), knows the software involved, and knows the tasks that need to be accomplished. Ultimately, if I were to hire a bookkeeper in-house, I would be responsible for training and overseeing a person in an area in which I am not an expert. Of course, I could hire an experienced bookkeeper, but to get the same level of expertise in-house, I’d probably need to pay much more.
Of course, it’s important to recognize that outsourcing is not a “set it and forget it” proposition. It is critical that small business owners closely monitor the work of vendors and hold them accountable for the results. One tip we give clients for finding the right vendor is not only to think about the tasks that need doing but also about their management style and the ways in which they want to interact with that vendor. One vendor is likely a better fit for them over another.
When Hiring Is Necessary
As noted, hiring makes sense when the functions and tasks that need to be accomplished are essential to the core business. Hiring might also be necessary if the company gets complex enough that it justifies bringing on staff to execute tasks exactly as the company needs them done. Most often, hiring is needed when the business is growing, and key staff are needed to fill key functions. Critically, don’t forget that any hiring is going to take time to get it right.
When thinking about hiring, we can’t stress enough the positives of promoting from within. When your employees see a path for growth, they are more engaged and satisfied on the job. We tell our clients to look for staff who have the potential to do the things in the job description. Who owns the outcome of their work and looks for ways to make processes or services more efficient and effective? Who shows signs of being able to learn the skill set? There will always be great employees who do a good job day in and day out but who are not interested in, or perhaps capable of, greater levels of responsibility. Give these folks a raise or an extra week of vacation; promote the others.
If the idea of outsourcing and/or hiring is overwhelming, Dunathan Consulting can help! Schedule a free consultation today to discuss your situation and begin the process of freeing yourself up to do your best work.
