We recently hosted two group calls on a topic that is often considered controversial. That topic is outsourcing. First, there are many different variations to outsourcing, including using interns from your local college or university where they intern in your business for little or no pay in exchange to learn your business.
The point of contention always comes down to outsourcing overseas. Is this really an ethical way to do business, especially in the recessionary economy we’re experiencing in the U.S.? Isn’t this unpatriotic to be sending work to the Philippines… or to India… or Singapore when so many Americans are struggling?
Our strategic partner at has listed all the options available to small business owners for possible outsourcing. Many of them are U.S. based, so you can use U.S. based contractors if you so choose. Naturally the biggest difference will be the pay. In the U.S. you will pay $15 to $20 per hour instead of $1 to $3 per hour, and possibly risk getting lower quality with the U.S. worker.
Please remember that it’s our job to help “small business owners.” Small business owners have two strikes against them from the start. Unlike a bigger company that has access to personnel and departments to carry forth their mission, the solo-professional is wearing 5,000 hats all at the same time.
Is it any wonder that over half of all small businesses fail within the first four years? And yet, no one denies the simple fact that it’s the small business owner that creates the most opportunity for Americans. It’s the small business owner that hires the workers once they get their business up and going.
It’s the small business owner who pays the taxes and is our only future hope for paying off our unbelievably high national debt. It’s my belief that outsourcing helps the U.S. economy… rather than hurt it.
Let me give you a few excellent reasons why outsourcing is good for our U.S. economy and why I believe every small business owner should be doing it right now.
First, as a start up entrepreneur or business owner, outsourcing allows you to focus on your highest income-producing activities while leaving the income-draining activities to others better suited to performing these functions.
This frees you up to create new products, establish new services and spend more time marketing those products and services.
Second, outsourcing allows your company to grow so that you can hire internally. When you first start out, you are practically forced to do everything yourself. How can a start up business running everything on a shoestring budget afford to pay someone $20 an hour for menial labor?
And yet, nearly 80% of everything small business owners do daily is menial labor. I call them income-draining activities, since sales and marketing are the only two areas that produce revenue for your business.
However, if a start up business could afford to outsource these menial tasks at affordable rates such as those in the Philippines, that allows the small business to grow quickly and reach a point where it can then hire qualified U.S. workers at a higher wage.
Third, outsourcing doesn’t just apply to overseas outsourcing. You will indeed outsource to Americans as well. At OneCoach, we outsource our conference call service to a U.S. provider. We use a U.S. based communication company as well as a U.S. provider for our customer service and sales automation platforms.
But here’s the key to all of this. To me what is REALLY unpatriotic is to provide work… ANY WORK… to unqualified contractors… whether they’re U.S. based or overseas.
Find the people who can do the best job, whether they are American or not. NEVER reward inferior service providers just because they are American. You can’t afford to.
Fourth, our great country was founded on the basic principles of competition and innovation. Bill Gates and Steve Jobs started out in their garages. And I guarantee you that when Bill Gates got started, IBM wasn’t there to ask him how they could help him get started.
That’s what makes America great. Outsourcing generates competition and competition causes innovation and innovation produces new “in demand” products and services and new “in demand” products and services are what fuel our economy.
And finally, outsourcing allows small business owners to compete with big business owners. It gives them an opportunity to get started… to get going… to get ahead… and do so without breaking the bank. It allows the little guy to achieve their dreams of working from home or starting a business.
So if you question your motives for outsourcing… or if someone else brings this up to you in discussion, keep these points in mind so you keep the discussion in the proper context. My job is to help all of you as small business owners build successful businesses and enjoy and extraordinary life. So I say… thank goodness for outsourcing!
