5 Tips for Outsourcing

Outsourcing has become a very popular and common practice in business today. Especially when it comes to administrative tasks, such as data entry, transcription and web development.

In today’s global economy it is very easy to find specialized skills at a very affordable price.

It’s a real win/win situation.

You find talented skilled labor at an affordable cost. And the contractor is getting paid what turns out to be a significant wage in their local currency.

The most common websites I use are www.odesk.com, www.guru.com, www.elance.com, www.rentacoder.com.

There are lots more, but you should be able to find everything you are looking for on those sites. I prefer Odesk.com.

But, let me warn you.

It’s not all roses.

I have kissed my fair share of frogs before I found great service providers. If you are not careful, they can cost you money and reputation.

Today I want to share with you 5 lessons I’ve learned while doing this.

Tip #1: Creating the project

Regardless of which site you are posting your requirements on you will need to create and describe your job requirments.

I found that when posting any type of job I get all kinds of spam/robot responses, where applicants have used a recycled and often non-pertinent replies.

To combat that, after the I describe the requirements, at the bottom of the post I put something like this:

To avoid SPAM and to make sure you actually read this posting and you can follow directions, please reply with the words “Mr. Bond” in the subject line.

I love it when an applicant replies with Dear Mr. Bond. (Every guy secretly wishes he could be James Bond)

By doing this you can eliminate MOST of the replies… you just scan the subject lines and only look at the ones that have “Mr. Bond” in them.

WARNING: Don’t make the mistake I have in the past of actually reading some of the ones who didn’t follow directions… some of them will be tempting and sound like they are an applicant you can’t pass up. But you should. They have perfected that cover letter to have that effect on you.

You want to find someone who addressed all your specifications individually.

Tip #2: Applicant Requirements

The #1 requirement I list is that they be fluent in English. In the past communication was too difficult and slow when the contractor didn’t have a high-level of proficiency in English.

I also like to require a minimum of 2000 hours worked through Odesk.com. This is good for a couple of reasons. After you complete (or cancel) an assignment you can give feedback. After 2000 hours of feedback, you can get a good feel if the person is for real.

This also protects you from fly by night providers that just open up a new username and rip you off.

Tip #3: Independant v. Agency Providers

There are pro’s and con’s for both. I prefer the independent contractors because they are more available and more flexible. Also if they are a good fit for your team they are candidate for a permanent hire.

The reason I don’t like the Agency works is you are always dealing with different people. One day it’s the guy you hired, the next day it’s “manager”. The agency hires also seem to be a bit more aggressive in demanding more hours. My experience has been they are always trying to expand the required amount of time to finish a project.

Tip #4: Fixed price v. hourly

Most projects I try set up as a fixed price “trial”. I let them know that I will be testing out applicants and at the end of the projects I will hire someone as my main contractor.

Once I have found someone who performs well and ON TIME. I will then offer them an hourly rate.

Tip #5: Documenting Work

It’s important to document and write down all the “processes” you have in your business. For a couple of reasons, first it allows you to basically duplicate yourself.

Whenever I hire an outsourced agent, I always have them create a job description of their responsibilities and then a word document breaking down step-by-step their tasks.

I’m basically having them create the training manual for their replacement should the need arise.

The easiest way to do this is to create a Google doc and then share it with the contractor. After they have completed the requirements and created the step by step process to fulfill the the requirements, remove their name from the ‘share’ list.

(BONUS TIP: create a separate google doc for any usernames and passwords they create on your behalf especially for any social media sites they create for you.)

The second reason, this so important for your business, is it actually has value if you decide to sell the business.

Follow these tips and you should save yourself a lot of time, frustration and money.


  1. Rob Carlson on March 2, 2012 at 9:06 pm

    Jeff, great post! I have thought so many times of outsourcing some of the bigger projects that I have "lurking around" in my head. I think that I had just enough confusion about how to start, that I didn't. This was a great primer. Thanks!

    • Jeff Sterling Paro on March 5, 2012 at 10:39 pm

      You're welcome buddy! once you do one… you'll be set and it will become a lot easier!!

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