How to know when to outsource something vs doing it yourself
Nothing is more confusing — more riddled with mis-information and downright bad advice — than the subject of entrepreneurial delegation.
“Outsource your weaknesses”
“Invest in the experts”
“An entrepreneur needs to be a jack-of-all-trades”
“No one will know your business better that YOU”
Wtf, right?
For bootstrap business owners who own 100% of their own thing (or at most, share it with a partner) hiring and getting help is tough:
Are you supposed to delegate everything besides the core skills you’ve mastered?
Or…
Are you supposed to leverage your talent to build a team, to scale that skill you’re amazing at?
Do you need to learn about XYZ department of your biz?
Or…
Should you just hire someone who knows it all already?
Should you leverage globalization and low-cost overseas labor?
Or…
Should you pay top dollar for the world’s top talent?
As a scrappy bootstrap business, should you just grit your teeth and do everything yourself?
Or…
Should you take a risk and spend what little cash you have on salaries/contractors immediately?
… Confused yet?
No entrepreneur succeeds as an island
Everyone needs help in some capacity. And yet, the average business owner is befuddled by conflicting advice when it comes to this most necessary part of growing a business.
The confusion all hinges on a couple of misunderstood realities of business.
There are simple, golden “check-the-box” rules that will guarantee you win with outsourcing, hiring and delegation. (These rules only apply to bootstrapped businesses — if you’re running a venture capital financed startup, the rules are totally different.)
You shouldn’t consider hiring/outsourcing if you haven’t yet figured out each of the following TWO factors in your business. Each of these two principles is subtle enough to require some explanation, so bear with me.
You gotta do everything yourself, until:
1. You have a repeatable, reliable system that produces revenue
Bear with me here because I know it sounds like I’m saying: You need to have a successful business before you hire anyone. Not quite…
You cannot outsource the figuring-out of how to grow your business.
Nor can you outsource figuring out your product/market fit.
So many aspiring business owners have fantasies of hiring an “expert” to crack the code on some new customer acquisition channel. These people are all deluding themselves.
In 2018, this fantasy for marketing miracles often gets projected onto “experts” of arcane internet marketing mysteries. PPC and SEO are two of the commonest culprits.
Something about these internet marketing — that seems so complex, mysterious and powerful to a layman outsider — causes otherwise intelligent entrepreneurs to suspend their critical thinking. They tell themselves it’s possible to hire an expert and put everything on autopilot.
The pin in this balloon is the simple truth:
If it were that easy, EVERYONE would be doing it.
Building a business is tremendously difficult. That’s why so few of the people who attempt it actually win.
Likewise, hiring a PPC consultant to turn your brand new product idea into a multi-millon dollar profit machine… well, if it were that easy, the person you’re trying to hire would have already done it all on their own.
The hardest part of business is turning strangers into customers. That’s the part YOU have to figure out for yourself.
You can’t hire someone else — a marketing or sales whiz — to figure out how to sell your thing.
You can’t do it because of a fundamental paradox: Anyone with bonafide sales or marketing skills (and integrity) already knows that any product has to have legs before you can “blow it up” with sales or marketing tactics.
A sales/marketing whiz knows that the best opportunities to expand businesses happen when a great, proven product is introduced to new markets via new channels. They’re in the business of engineering those channels. They might even run an agency of their own, getting rich doing just that.
Fact: Marketing and sales experts are in the business of making big money by introducing proven products to new audiences.
The other side of the paradox is that the only people who will take on an un-proven new product as some sort of marketing consultant… are either idiots or frauds.
At best they simply have no idea what they’re doing and will fail because of it. At worst, they’re charlatans who’ve recently graduated from e-courses teaching them how to fleece small biz owners for digital marketing consulting fees.
(There is a entire niche industry dedicated to teaching people to build marketing “consulting” companies from scratch as a sort of business-in-a-box course. One of the biggest touted “features” of these shady courses is that you can succeed “without any experience or ever having worked as a marketing consultant before”. It’s scary.)
These people happily charge you a percentage of your advertising spend to put bad ads for your unproven product in front of huge audiences. When it doesn’t work, they’ll throw up their hands and blame YOU for not having a better product.
This specific example of fraudulent PPC consulting is important because it’s so common these days. It’s important to understand that this principle ALSO applies to any other sales or marketing channel or expert:
Rule: You cannot hire a face-to-face sales expert to sell your thing if someone never sold it that way — reliably and repeatably — before.
That someone pretty much HAS to be YOU.
A good, experienced salesperson knows deep down that they should only go to work selling a product they believe in. One where they can see they’ll make a ton of money. One that they’ve judged will practically sell itself. No sales expert became an expert by selling products with a dubious market fit!
Like I said, you can insert any sales or marketing channel you can imagine: Phone-based. Content marketing. SEO. B2B. It’s all the same. Until you prove your product “pops”, no genuine expert is going to come near it.
This means that if you haven’t yet proven out a successful sales/marketing channel, any “expert” pitching you and promising you the moon… is probably a total fraud.
You can only start hiring and scaling a team when you have at least one reliable, repeatable way of driving new customers through your door. That’s when smart entrepreneurs start to build systems and processes to scale the customer acquisition channel they have themselves proven.
If you hire before you’ve figured that out, you’re falling into one of two traps:
The first is what I’ve just described: You’re seeking a “rockstar expert” like some magical unicorn.
The second trap is simply where you’re wasting money with time-saving hires like assistants, or any support staff who don’t contribute to revenue. These are the people who do what you do in the business, and ideally do it “cheaper” when compared to the rate at which you value your time.
The purpose of this second kind of hiring is to free up your time as owner/operator, so you’re not so focused on admin or product fulfillment that you can’t actually grow your business.
It’s a mistake to make these hires when you don’t have a clear sense of what to do with your newly freed-up time to actually grow the company.
If you’re hiring a VA to take boring, repetitive tasks off your hands but you don’t have a specific plan to actually grow your business… You’re basically just setting cash — your profit margin, specifically — on fire.
There’s one more super critical step that you must accomplish before you can make a good hire…
2. You develop the expertise needed to spot charlatans and only hire winners
Savvy readers who made it this far will have already figured this out.
In my example of hiring “a marketing expert”, what criteria are you using to judge one applicant from another?
How does the layman identify an expert worthy of hiring?
This paradox is the real, vexing rub of entrepreneurship and points to the ultimate reality…
Truth: A bootstrap entrepreneur does in fact need to become a jack-of-all-trades, because that’s the only way to successfully hire a master-of-one.
A beginner entrepreneur simply doesn’t know what they don’t know.
They’re what psychologists all “Unconsciously Incompetent”. This makes them easy prey for the (many) charlatans who make a living fleecing such people.
The bootstrapper must uncomfortably execute in all the scary, unknown parts of their business (sales, marketing, even — shock horror — bookkeeping) until they arrive at a state of conscious incompetence. They have to know what they don’t know.
This takes longer than most people think. The whole situation is subject to the perils of the Dunning-Krugger Effect, which means that even though you’re reading this article… you’re still likely to gravely overestimate your competence.
So when the hell can you confidently and successfully outsource, delegate or hire?!
If you’re feeling exasperated by this article, I understand. For bootstrap entrepreneurs, it can sometimes feel like it’s ALWAYS a mistake to hire something out.
The truth is simple and — once you do the work of swallowing it — incredibly rewarding:
The best hiring happens when an entrepreneur seeks help with something they’ve already mastered JUST enough that they are:
- Getting a decent result at the activity themselves
- They’ve got a system/process in place for themselves
- There’s a ton of low-hanging-fruit improvements begging to be made
When these three milestones have been accomplished, the opportunity to create tremendous value is blindingly obvious to the prospective employee, contractor or agency. Anyone remotely competent and ethical will see the win-win just waiting to happen.
The bookkeeper will see how effortlessly they can save you hours upon hours by setting up proper software to replace your home-grown shoe-box system.
The virtual-assistant will see how simply they can copy-paste responses, streamline research and generally fast-track your digital communication.
Most importantly…
The Marketing Consultant (or staffer) will see how your mediocre efforts to advertise are working okay-ish… and how quickly the right copy, or some simple testing, or any manner of “industry best practices” will skyrocket results.
The same goes for sales tactics and any help you seek in the “growth” department of your business.
Why bootstrap entrepreneurs build the best businesses
As I said at the beginning, all this advice doesn’t really apply to venture-funded businesses. If you’re sitting on a huge pile of cash that exists solely to create and test the assumptions of a business model, then go spend it. The rules are different.
Bootstrap entrepreneurs — on the other hand — have to do the tremendously, paradoxically difficult work of figuring out their chicken and their egg. They have to start something from nothing. They have to make a buck without spending any. Do things they don’t know how to do.
It’s hard as hell, but somehow… it works.
The belief and credo that execution is everything really helps. Patient, relentless execution is everything when it comes to creating lasting value and concrete business success.
(And btw, this is the philosophy we instill at Commit Action in the entrepreneurs who use our Executive Effectiveness Aide service — a form of Accountability Coaching to push themselves to become ultra high leverage.)
The chicken-and-egg dynamic this article is all about — where you can’t hire anyone until you do it all yourself, but you’ll never do it ALL without getting some help — forces entrepreneurs to build their bootstrap business with a relentless focus on what matters:
Strangers finding your business and giving you their money.
The dynamic of bootstrapping lends itself to starting out in services — selling your time for money — then figuring out how to productize something you do, based on your hard-earned and ultra valuable insight into your customer’s needs.
The services company evolves to a product company, profit margins increase, scale starts to happen and then the hiring can begin… You’re off to the races.
The high-technology world of venture backed startups could sorely benefit from this wisdom that a bootstrap entrepreneur naturally figures out.
In startup-land, kids with sexy powerpoint presentations are given millions of dollars and told to “hire the best” on day one… and it often goes about as well as you might guess.
Starting out with large sums of money to spend — whether it’s yours or your investors — sometimes ends up obfuscating product-market-fit. Having a big budget simply allows the entrepreneur to hide from their customer, not really connecting and not truly empathizing. This does no favors to the quest to find product-market-fit.
So, chin up!
… If you’re a bootstrap entrepreneur wondering when you can breath a sigh of relief by calling in “the experts”, the news isn’t good: You have to be the expert you need. For now. Only then can you find real help — the kind of help that actually works.
BUT, this work you’re doing — this terrifying foray outside of your comfort zone — learning how to sell, how to market, how to manage costs and organize your business and more… all this work is forging something extraordinary.
Bootstrap entrepreneurship is a crucible.
The thing that’s being refined — through tremendous pressure and heat — is YOU.
The one thing you have to do is keep at it. The one thing you have to remember is that execution is everything. Staying in the game and relentlessly taking action will guarantee that you emerge triumphant as a man or woman of entrepreneurial steel.
You’ll have everything you need — and everything you need to know — to grow an empire.
Thanks for reading! If you’ve found these principles useful, I’d appreciate you hitting the 👏 button — a bunch of times, ideally. It helps other bootstrappers who’re torn between hiring and doing-it-all-alone find this guide.
