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The show Outsourced centres on a company called Mid America Novelties, which sells whoopee cushions, foam fingers and wallets made of bacon.
The show Outsourced centres on a company called Mid America Novelties, which sells whoopee cushions, foam fingers and wallets made of bacon.

Guest Column

Outsourcing: You can't afford not to Add to ...

It’s a Thursday morning, your business is a few months old, you’ve just made your first sales and things are looking bright.

You’ve got calls to make and deals to close. But you’ve also got bookkeeping to catch up on and mountains of administrative work. How do you prioritize?

Entrepreneurs have a tendency to tackle too much, to fulfill that overarching desire to make a new business succeed. A lack of capital to hire people, a fledgling idea and a stern resolve are all motivations to handle everything yourself.

But there is an alternative: Focus on what you’re good at, and outsource everything else. That’s right, outsource.

Most people are exceptional at certain functions, whether it be sales, administration, accounting or programming. But very few entrepreneurs are good at all of these things, or even most of them. Consider outsourcing non-core elements of the business to people who excel at them. You might think, “I can’t afford to pay someone to manage my books,” but the truth is you can’t afford not to.

Your business will suffer if you spend your waking hours working on tasks you’re neither interested in, nor good at. How much time do you waste trying to figure out how to use new accounting software when you could be out there developing your idea? Too much.

Try this: Establish a value for your time – let’s say $40 an hour for the sake of argument. Then figure out how long it takes you to perform non-core elements of your business, in this case let’s say 20 hours a week. In our example, that means you’re wasting $800 a week on unproductive aspects of your business, elements that you hate.

How long do you think it would take an expert, and what would her rate be? Let’s say she could do it in half the time but for twice as much money – it’s the same variable cost outlay, right? Wrong. Think of the extra time you have to put into the core elements of your business, the elements you like to do. In an average week, you could have a far greater impact on your company by outsourcing a few functions, paying that $800, while driving the business forward by doing what you’re good at.

And consider how much better and more productive you’ll feel at the end of the week when you’re only working on things you like to do. It’s worth the $800 for your positive state of mind alone.

When I started my current business, I sat down and prioritized what I felt were core elements of the business that I should not outsource, such as product development, quality assurance and key account sales. Then I tried to outsource everything else. I ended up outsourcing manufacturing (a big one), storage, transportation, accounting and distribution. And to tell you the truth, it was easy.

Nowadays, there are specialists for just about everything you need, and they are not only ready to assist, that’s all they do. I decided to use government resources (our tax dollars put to good use) to help me source some companies that could assist me. I was put in touch with food processors that could make my products, I was provided a list of transportation companies, public warehouses and distributors.

I used the web to find outsourced bookkeeping and other services I felt I would need. For the first two years, I was a team of one – with a lot of help from my wife – and a lot of outsourced brainpower and brawn. It took me a full two years to hire my first employee, and even now, I only have five full-time staff.

Building a business is hard enough. Don’t bog yourself down by working on things you’re not good at and don’t like. Focus on your core competency and find good companies to expertly look after what you’re weak in, and your business will be far better off, as will your state of mind.

Special to The Globe and Mail

Matthew von Teichman is a serial entrepreneur who has been starting companies since he was 19. He founded his fourth and latest venture, Life Choices Natural Food Corp. , in late 2002, and the company’s line of 28 products can be found in most grocery stores across North America.

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