Micro-Entrepreneurship For Dummies
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Just because you own a micro-entrepreneurial business doesn’t mean you need to do everything yourself. Sometimes it makes sense to outsource the work you don’t have time to do, or don’t like to do. Take a closer look at the advantages of using outsourced workers.

Hiring and retaining employees can be a daunting task for the micro-entrepreneur. But making the initial foray into hired help can be much easier with outsourcing. Here are the potential benefits to outsourcing:

  • Cost: Hiring an employee can be expensive, especially for cost-conscious micro-entrepreneurs. Outsourcing can be a fraction of the cost compared to hiring an employee.

    The total labor cost per hour for an outsourced worker for a small business can easily be 25 to 50 percent lower than the total labor cost for a conventional employee (this savings is for using outsourced worker in the United States). Some of these workers may be overseas and have even lower labor costs.

  • Temporary needs versus permanent cost: Hiring an employee can end up being a long-term arrangement (the whole point of hiring someone is to pay him or her for ongoing service for the foreseeable future). Outsourcing means that you only pay for what you need; temporary needs mean lower and/or limited labor costs.

  • Labor cost arbitrage: Arbitrage is the act of buying something at a low cost in one market and simultaneously selling it at a higher cost in a different market and profiting from the net difference.

    In the case of outsourcing, you can easily get five or ten or even more hours of productivity from a worker in Asia, for example, for the same cost as one hour from a worker in the United States.

  • Profit increase: Using outsourced workers for some relatively simple tasks frees your time so you can perform higher-profit potential activities in several ways.

    • Outsourced workers can do low-priority tasks while you do high-priority tasks. If they do something worth $10 an hour, it frees you up to do something worth much more to you.

    • If a particular task is valuable to you and adds revenue to your business, you can copy yourself with an outsourced worker, allowing you to do more and leverage human time and effort.

      Think of a process (like selling a product online with search engine optimization) that makes you a profit and have an outsourced worker do the task and net a profit. If the process, for example, makes you $75 when you do it, you can hire an outsourced worker, train him, and pay him $15 each time he replicates the task.

      If this approach succeeds, you can hire more outsourced workers to do the same and generate more total revenue for your business. You can essentially copy yourself and re-do that profitable task over and over again.

  • Different time zone: When you hire outsourced workers that are in different time zones, you can coordinate the project or work to continue while you aren’t personally working (like when you’re catching up on some sleep) and keep the productivity humming along.

  • Peak workload accommodations: Say your business gets busy around Groundhog Day. You can simply hire a temporarily outsourced worker just for a few days to help out at that time.

  • Different skill set: Some projects in your business may require skills you don’t have. You can choose from thousands of outsourced workers with different skills to do the job.

  • Efficiency: When you outsource, you reduce the need for you to do everything and juggle so many tasks. You can then focus your time and energy on the more urgent tasks.

    For instance, you can have someone do data entry for an email marketing campaign while you write the email sales copy. Spending your time on what you do best and having someone else do the tasks you don’t enjoy just makes sense.

About This Article

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About the book author:

Paul Mladjenovic is a certified financial planner, micro-entrepreneur, and home business educator with more than 25 years' experience writing and teaching about financial and business start-up topics. He owns RavingCapitalist.com and is also the author of Stock Investing For Dummies.

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