Podcast Episode 21 - Outsourcing and pricing

outsource pricing help Aug 04, 2021

You might need to think differently about your pricing once you start to outsource. There’s a lot to consider and several options available to you, but the route you take will depend on your needs. 

When you’re looking to outsource, I recommend you start by outsourcing client work and the more junior stuff associated with it. For example, I have someone do the bookkeeping for my clients on my behalf. I charge the client and pass the work to my outsourcer. It’s a great way to get started with outsourcing, as it means if the client work stops, so does the cost of the outsourcing. You can then choose whether the client knows that you’re doing that or doesn’t. 

Factor in your time when establishing outsourcing costs

It’s important to realise you’re still managing that relationship, particularly if the work then comes through you to be reviewed, so you need to price accordingly. Is what you’re charging enough to cover that? You’re spending a lot of time looking for clients and building those relationships. It’s your neck on the line with the client when you’re outsourcing the work, so is the cut you get from it enough for the amount of time you spend doing things?

How long do you spend getting a new client? Factor in those discovery calls, any DMs and emails you respond to before you get a new client. It can take a long time to get clients, and the person you’re outsourcing to and supplying the work to doesn’t have to do any of that. So ensure you’re factoring that all into your pricing, so your cut is enough to cover those things.

Establish what else you can outsource

Once you’ve outsourced the junior stuff to an associate, think about what else you can outsource. What work could you do but don’t want to? You may be a social media manager who does all the planning for client posts but gets someone else to do the images, hashtag research and posting. 

Turn the tap on and off as you get clients in - it’s the safest way to start outsourcing. But your pricing needs to be high enough to make it worth your while doing. 

Also, think about the things you hate doing, put off, or simply can’t do, and outsource them. Things that don’t cost loads of money but can make a big difference. Most of it is about time-saving, not necessarily a huge return on that investment in terms of money. It’s all about making your life easier.

Opt for a specialist rather than a generalist

Initially, look to outsource to people who are specialists in their field. For example, get a Social Media Manager to do your social media, not a Virtual Assistant. Start with a small amount of time with a specialist freelancer, rather than a lot of time with a generalist one. You could employ an admin person to do all the tasks you need, but there’s a high chance they wouldn’t do them as well as a specialist could.

Think about how a tech VA and how they could sort all your systems out. You could have a few hours with a Social Media Manager. Spend another few hours a month on bookkeeping. 

Look into the tech solutions available to you

Also, consider how tech could save you time. Can you find technical solutions to free up your task list and your energy? Things like Zapier are really helpful because they get technology to talk to each other. I make sure my invoices automatically pop through to my accounting system in Xero when someone buys something off my website. That means nobody has to touch it, and it doesn’t have human intervention. 

It’s about looking at things and thinking; how can I take myself out of this process? Can this process run without me doing it? Get someone to help you. Many people are very systems savvy and are happy to implement stuff and then support you at an ongoing low level. 

Is hiring a better solution than outsourcing?

Hiring people is quite different, as you have an ongoing commitment to them. They’re also a fixed cost. They may only work three days a week, but you still have to pay the relevant taxes and National Insurance for them. As an employee, they’re also entitled to holiday and sick pay too. Is that something you want to invest in? 

You do get the reliability of people coming to work for you for a certain period of time, but it’s less flexible when compared to outsourcing. You also have to think about how you can manage that team member remotely.

Know what you want your business to look like

It comes down to thinking carefully about what you want to do. In an ideal world, what do you want to outsource? What would you love not to have to do in your business? We all have things we hate doing! 

If you’re trying to scale your business, look at what you want your business to look like. Are you a solopreneur who just wants to go to the maximum position you can for just you? Or do you want to grow a business and employ people? Do you want to be a bigger business over time? 

Do you want to be managing a team of people? Are you looking to establish a team of outsourcers? It takes a lot of time and energy but would also free up your time and energy.

When it comes to outsourcing, you need to be thinking ahead and pricing accordingly. Think about what you might want to outsource and what systems can do for you. Know what’s the best resource to get things done in your business and to reach those goals you want. If you outsource to specialists, would that be a nightmare for you to manage? Are you better off employing a generalist who has got more time with you?

There’s a lot to consider and several options available to you, but the route you take will ultimately depend on your needs. 

Listen more to my podcast on outsourcing and pricing. 

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The Pricing Queen podcast is produced by Decibelle Creative

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