The pros and cons of the new o-conomy

The Esquire writer A.J. Jacobs famously outsourced his life for an Esquire article to see just how many minute tasks he could farm out – in his case to a company in India called Brickwork. He had been reading The World is Flat by Thomas Friedman and figured, heck, if call centres, IT firms and the CIA could outsource some of their work, why couldn’t he?

While Jacobs was on a bit of a lark, he was also onto something. Outsourcing isn’t new, but leaner times present opportunities for small businesses and start-ups to hire just-in-time help or expertise such as accounting, administrative help and even executive advice that they can’t justify using full time. Our Project Start-up stars, Innovequity, work with Cameron Schuler, the executive in residence at TEC Edmonton.

When it comes to outsourcing, sales and marketing are one of the easiest and potentially most valuable cases of outsourcing you can make. You hire a firm that understands the market, has built-in connections in the industry and can use their team of experts to take your start-up to the next level. Plus, you only pay for the time they spend on it, rather than hiring a dedicated staff member. Some things to consider when you’re outsourcing include:

1. Outsource the tasks that support, but don’t comprise, your core business. Administration and bookkeeping could fall into this category.
2. Make short-term contracts. Start-ups are especially volatile, and can’t necessarily predict their staffing needs.
3. Project management can sometimes (though admittedly not always) be a good place to bring in a short-term expert to guide the project from start to finish. Benefits include freeing up the time of senior executives at the start-up to do long-term planning and run the big-picture stuff.
4. Know as much as you can up front. Don’t just read the small print. Map out budgets, timelines and any potential changes the outsourcing arrangement.
5. Ask around the industry. Who do other people use? What companies should you avoid? Tried and true connections are also an opportunity to expand your network in the industry. U

More Resources
How to Outsource Virtually Everything
A comprehensive guide from Alberta Venture on the new o-conomy.

Outsourcing Journal
You’ll find everything from managing offshore relationships to case studies.

Tips for Outsourcing Your Small Business Needs
Microsoft offers up this primer for newbies.

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This entry was posted on Tuesday, August 4th, 2009 at 2:56 am and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.