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August 28, 2008

Outsource everything

Want to make more money? Here's a great tip from Mark Stewart, Program Manager at EPSG Corp. The quote below is from a question I recently posted on LinkedIn about how freelance consultants generate their cash flow, and what the mix of products and services was.

 As an independent consultant in the past, and someone that deals with consultants on a daily basis, the one key piece of advice is:

OUTSOURCE EVERYTHING outside of your core skills.

Seriously, this concept is very foreign to most people. For example, an IT guy whose core skill set is UNIX or storage or apple PC's should not waste his time looking for customers. That person does not make money selling, so OUTSOURCE your sales function to a recruitment firm, or consulting firm, or whoever is bringing you the work.

Do you make as much money? well actually yes you do. Because you don't have to spend your time finding the next job (customer) instead of having to bill say $100 hr on a gig, you can bill $80 bucks a gig because you don't need that extra spread to pay for ALL of the extra hours you spent looking for customers to make that extra $20 bucks. In fact, more often than not you make MORE money in this model.

Even better you don't have all of the headache associated with having direct customers and you can negotiate more favorable payment terms.

This applies to almost all small businesses, but it applies twice as much to freelance consultants.

BTW: As a business owner with multiple customers and consultants, I STILL work in this model. I outsource my CPA function, my lawyer, some sales functions, and on and on and on. You can do it on your own or you can be smart and do what you do WELL.
Great advice. Particularly with the abundance of programs and services available on the Internet today. Light software, outsource the cold calls, get a call center for first line customer service management, even agree with the point of outsourcing the marketing and sales to a degree. (Well, maybe some of the marketing)

Focus on what you do best. Deliver the work, generate IP, build your brand, and managing your people. I really love practical people...

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