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In a recent post on  Entrepreneur’s Journey blog, Yaro has an interesting discussion on being a successful entrepreneur. To (crudely) summarise the post, his point is that to be happy and successful you need to have positive patterns of behaviour. Do what you know you should be doing, and positively reinforce that behaviour (think positively about the actions you’ve taken). Check out the link to read it in full.

I read this post and it struck a cord. This is a battle I am currently waging, and one that I am winning for the first time in my life. I used to believe that fixing my behaviour would make me more successful. However, I now believe that behaviour is a symptom, not a cause. If you are struggling to fix your behaviour, you are probably focusing on the symptom and aggravating the cause.

Ok, so what does this have to do with outsourcing?

Both a lot and nothing Like many entrepreneurs I have a… shall we say ‘peaky’ personality. I experience high-energy high-productivity highs, and low-energy, low-productivity lows. For the last 6 months I’ve taken the conscious effort to ’smooth’ this out, by being more disciplined in how I think about things; in particular problems and challenges. I’m not bi-polar, but I’ve discovered that I do have some thought processes that promote ineffective behaviour.

DISCLAIMER: I am not a fluffy-wuffy touchy-feely kinda guy.

I am a big fan on the power of being positive, but I’m not into new age fluff. However, I recognise that I struggle to sustain ‘positivity’ and am prone to fall off the wagon. As part of a long search for a solution, I picked up a book called Learned Optimism: How to Change Your Mind and Your Life written by a renowned psychologist Martin Seligman.

Without sounding like a vegetable-kissing-tree-hugging-hippy, this book has dramatically improved my life. It will help you understand your cognitive thought processes- it is not fluffy, and will not have you chanting-positivity or star jumping at dawn. It does give you a great set of tools to apply discipline to your thoughts. Read the rest of this entry

Welcome to Part II of how to use customer feedback to select a freelancer. This article covers how to analyse and vet customer comments, as well as how to do a simple web background check.

This article is part of a series on How to Select a Great Freelancer Online.

You can find Part 1 here.

Read the recent positive comments

Don’t just take an average rating as your guide, jump in and read customer comments. In particular, find jobs that sound like yours and see what customers had to say. Were they ecstatic or just so-so? Check the English quality in the posts, if you find recurring grammatical errors, or strangely recurring comments. Not everyone is an English major, but sometimes these little things can help you identify falsified comments, or at least suspect ones.

Customer’s Seem to Have a Positive Review Bias

Be aware that customers are often coerced, begged, cajoled by their freelancer to leave favourable comments. The freelancer may also try and use their personal relationship with the customer as leverage to ensure that ‘minor issues’ are left out of reviews. Some flippant examples…

“Look how hard we worked for you, it COST ME money to finish your work!”

“Hugh my friend, it has been an honour to work with you. I will leave excellent feedback for you. I would be privileged if you would do the same!

Why mention this? Are they bad people for trying to sway your grade? No… it’s just business. A bit of a gentle squeeze can add a few points to their average rating, and a few extra dollars in their pocket.

The point I want to make is that glossy reviews are more the norm than the exception. Average providers with charismatic ‘front men’ will have very similar high positive ratings, to technically excellent providers. You need to look very closely to see the difference.

An average quality freelancer will provide a worse experience then an excellent one; but they’ll do a better job convincing you that there were good reasons why you had trouble! The fact that there is a positive bias in customer reviews is another reason why outsourcers with bad ratings should generally be avoided. Read the rest of this entry

This post is the first of a series on How to Select a Great Freelancer Online. It specifically discusses how to use past customer feedback and work histories to ‘read between the lines’ and reveal a freelancer’s real performance. You can find the index for the series and the first article here.

Part 1 of How to use customer feedback/ratings covers:

• How to use the average feedback rating (or score) to weed out under-performers
• How to assess past work performance and determine a freelancer’s credibility
• How to avoid being Scammed

Part II of How to use customer feedback/ratings (find it here) covers:

• How to analyse customer comments, what they mean, and reading between the lines
• How to do a background check on your potential outsourcer

So, On With Part 1. Customer Feedback, Past History = Future Performance?

The only way to verify someone’s past performance and identity online is by reviewing their customer feedback and interaction within outsourcing websites. All freelance/online outsource sites have customer feedback because it’s extremely useful for filtering out the trash (scammers, fly-by-nighters, psychos etc.). When using feedback and ratings it’s essential to remember that it isn’t perfect. As any investor will sorely tell you, past history is no guarantee of future performance! Add to this the fact that feedback histories can be gamed/manipulated, you’re left with an information source which is only useful if it’s used with care.

How to analyse customer feedback:

All feedback is not created equal, some reviews should be given more weight then others, and there are hidden stories in the data. Here are a few things to look for to keep you safe. Read the rest of this entry

This series of articles will help you achieve a much higher success rate on your projects by discussing how you can determine a good outsourcer/freelancer from a bad one. While it’s not 100% perfect, using my approach will dramatically improve your chances. I’ve used this approach on dozens of projects, and found that it has a excellent success rate.

When hiring a freelancer, we’re looking for someone who is adequately skilled, can communicate effectively, and who is going to take an interest in your work. It can be frustratingly difficult to find all of these qualities.

It’s also pretty common knowledge amongst freelancer’s that this is what most entrepreneurs are looking for. So it’s not surprising that on any given project, many of the bids received are designed to convince you that the bidder has all of these qualities… some bidders even go to the extreme of not addressing your project criteria at all; and instead focus on the touchy-feely ‘look how friendly I am’ stuff.

If you’re new to outsourcing, it’s normal to be drawn to the happy-friendly-feel good bidder. They make you feel comfortable and they always seen nice. I made this mistake early on, believing that many of these bidders must be so experienced, so smart, so great, that they need not concern themselves with the details of my project. I’ve had some major disasters (projects breaking down once the details are worked out) as a result, and I implore you to ignore feel good bidders and focus on my criteria below. Getting someone you can work with is important, but it’s essential that you don’t get drawn into the empty sales pitch!

So how do you pick a good freelancer? Read the rest of this entry

This article discusses what I consider to be the most important rule for entrepreneurs and small business to successfully use outsourcers or freelance labour. It is part of a series of articles I will publish over the next few weeks outline what I think the key guidelines are for outsourcing success.

My first rule of outsourcing is never, ever, ever, ever, outsource a problem! It’s the number one rule because it’s by far the easiest and most dangerous one to break. Early on I broke this rule repeatedly, without even realising what I was doing wrong. I kept thinking that I just couldn’t find good people, or that foreign providers just weren’t skilled enough. But the problem wasn’t (always) a lack of their skill; it was often my application of that skill. My expectations were in some ways too high and I was asking them to perform above/beyond their capability. I’ll explain what I mean.

Traps for new punters…

The first few times you engage someone to do specialist work for you, it’s easy to fall into the trap of giving them too much responsibility. It feels nice to ‘hand over the reigns’, and we’re conditioned to doing this. For example, if you take your car to a mechanic and you tell them that it needs a service; you’re trusting the expert to take care of the details. Here you’ve just outsourced a problem, that is, your car is worn and needs maintenance. You don’t know what maintenance and you don’t care! It’s up to the mechanic and you trust him to work out the details.

This mentality will lead you to disaster if applied to a foreign provider. In the mechanic example, if you were to outsource this properly you would need to say “change the oil, change the plugs, change the air filter, check the break pads for wear and tell me how worn they are…” etc. You are actively limiting the freelancer’s discretion, which forces you to consider your problem and work out a solution. Read the rest of this entry

The following article will discuss the range of services currently available via the web from freelance and outsource providers. Whether or not some of these things should be outsourced is another discussion entirely

As little as 8 years ago, the answer to this question for small business was ‘software and web stuff’. Whilst global corporations were enjoying the benefits of large scale ‘off-shoring’ and the debate raged over ‘sending jobs overseas’; there was a conspicuous absence of opportunities for small business. Articles littered the popular press trumpeting a workforce and technological revolution, but unless you had a $1M project you could forget about it.

There weren’t many opportunities on the web for smaller operators to take advantage of the technological shift. The few services that did exist were in their infancy, and were mostly the domain of IT geeks and entrepreneurs skating on the bleeding edge.

In the last few years, the range of services being offered has absolutely exploded! Basically if it can be done on a computer, and does not strictly require your physical presence, there is someone, somewhere selling it as a service online right now. Here’s a brief of the sort of things you can have done. It’s by no means conclusive: Read the rest of this entry

I accidently skipped over this, so a quick rewind to define outsourcing. I decided to outsource this to Wikipedia, you can see their definition below:

“Outsourcing is subcontracting a process, such as product design or manufacturing, to a third-party company. The decision to outsource is often made in the interest of lowering firm or making better use of time and energy costs, redirecting or conserving energy directed at the competencies of a particular business, or to make more efficient use of land, labor, capital, (information) technology and resources. Outsourcing became part of the business lexicon during the 1980s. It is essentially a division of labour.” www.wikipedia.org

A little too convoluted to be useful for our purposes but a thorough definition I think you’ll agree… it would make a lovely quote in an MBA essay or if we were putting together a textbook…

This is part of the problem with understanding outsourcing for small business. A great deal of the popular media still describes it in terms of its government or corporate function. It’s all very 1990s It conjures images of 10 000 page service agreements, teams of lawyers negotiating the smallest details of who’s responsible for what, where, when and how much. Read the rest of this entry

This article follows on from ‘Why you should consider outsourcing – PART 1’ which you can find here. It discusses how outsourcing can offer your business a low cost, low risk avenue for achieving scale and labour efficiencies.

Nobody makes their own toilet paper.

It’s cheap, it’s commoditised, it requires a multi-million dollar infrastructure investment to make it, and you have to sell tonnes of it to cover your costs. Why would you want to go to all that trouble when you can pick it up at the supermarket for a few cents a wipe. If someone told you that you should make it yourself to save a few bucks on the cost of a roll at the supermarket, you’d think they were nuts right?

Have a think about what services you or your business consumes.

Are they commoditised? Are you consuming your limited infrastructure (office/house space, IT equipment, phone lines etc.) to produce goods or services that someone else could do more cheaply, because they have a volume, skills or infrastructure advantage that you don’t. If it’s done on a computer, or requires a phone line there’s a very good chance that you can achieve efficiency savings just by outsourcing it.

I know of dozens of business owners and entrepreneurs that stubbornly make their own toilet paper. Here are a couple of examples:

• a mechanic that made his own website. Looks terrible, puts an unprofessional face on the business and doesn’t generate income (as any business site should)… but he did save a few bucks by making it himself… or so he thinks. He bills his customer’s around $70/hr for labour, but values his personal time at $0/hr? Can’t help but think that given his long work hours, it represents several evenings that would have been better spent with the kids!
• a medium sized manufacturer who has created their own labels and packaging. Looks pretty cheap, and they wonder why they have problems convincing customers to pay a premium for their goods;
• a plumber that runs his own web marketing campaign. Does a good job… but the grunt work could be more effectively done by someone else for pocket change. He could be free to bill more hours or spend his off time relaxing instead of working.

Consider:

• Why pay someone $50 to do something when it can be done faster and better for $5? Even $3?
• Why spend hours of your personal time and energy on a task that someone else can do cheaper and better than you, and requires only a fraction of your attention?

If your business is profitable, you have even more reason to consider outsourcing. Once you’ve started to make money, it’s time to stop valuing your time at $0,  and start focussing on the essential activities that only you can do. How can you better spend your time to make more money, help more people, or have more spare time (or whatever your particular goal is). Chances are you have better things to do then spend 4 hours on something you aren’t skilled at, aren’t paid for, and causes you to put off work you’ll have to catchup on.

Now, obviously it’s a little more involved then just saying ‘I’ll get someone to do it cheap’ but the above points are at the core of why you should consider use of freelancers within your business. If someone can do it cheaper and better then you, it would be crazy to do it yourself right?

So my question then is, are you making your own toilet paper? Read the rest of this entry

This started out as 1 article, but started to get a bit on the long side, so for your convenience I’ve split it into two parts. Part 1 discusses purchasing power, whilst Part 2 discusses scale and efficiency advantages.

Successful outsourcing creates LEVERAGE and UNLOCKS your time so that you can focus on the things important to you.

Off load the junk, low value activities or the things that you don’t have the skills or resources to do efficiently. Doing this frees you to apply more resources (time/money) to the important activities within your business. And that means increased profit.

In this article I’m going to discuss the leverage advantages of using freelance providers. What do I mean by leverage? I’m talking about Purchasing Power + Scale + Efficiency. I’ll discuss these in the context of outsourcing below:

Purchasing Power: You’re actually a lot wealthier than you think…

If you’re reading this from the US, UK, Australia, Canada or any one of the first world nations your local currency has a lot of purchasing power. If you’ve ever travelled overseas you’ll know what I mean, $60 a night for 5 star accommodation, meals and drinks? You won’t find that at home!

Buying locally with your local currency means you only achieve 1 to 1 relationship; your dollar is worth the same to you as the guy that you’re giving it to. But shop overseas and you can achieve 1 to 20 ratio (or more), because your currency is worth more (relatively speaking) to the guy you’re giving it to. I’m not an economist, so I’m not going to try and get into the details of this effect, but to summarise; it works because of the relative wealth and economic stability of your country compared to that of another. Wages, living costs, food, standards of living tend to be proportionately lower in the less wealthy nation, and this has a direct impact on the cost/value of labour (what people will charge for their time and skills). For example, it costs less to put a roof over your head and food in your stomach in India, so the minimum price you can afford to charge for your time is less. Makes sense right? Read the rest of this entry

Welcome to a shiny new blog about making the most of outsourcing/freelance services over the web. I’ve been talking about getting this together for over 12 months now, and I’ve finally taken the first few steps.

This blog is primarily targeted at small business users of these services, not providers (as I am not a provider I can’t offer much in this regard). I’m going to cover a pretty wide variety of topics, but in a nut shell I’ll be including:

• how to use web-based freelancers within your business;
• project management (with an outsourcing twist);
• process oriented business improvement, including strategies for efficiency and automation of activity;
• profitability improvement for small business (including recession proofing);
• entrepreneurship and small business issues.

The first articles to go up will be on the basic concepts and implications (as I see them) of using outsourcing as a business tool. Then I will start to delve more deeply into common issues such as management, value, quality, culture differences etc.

I am aiming to post fresh articles everyday. A bit of a slog with no readers, but hopefully I’ll survive the solitude I appreciate feedback, so if you have any questions or comments please leave them on the blog or shoot me an email. I hope to reach a stage where I can engage readers like you in dialogue. As anyone who has a blog knows these early stages are like talking to yourself, entertaining at first but there’s only so much silence you can take without going a bit loopy

Thanks for reading, more to come!