Asian Efficiency has a nice post on personal outsourcing. The article makes some good points, but it falls into a few common traps. I’d recommend reading the article and then coming back here to read my list of gotchas when it comes to personal outsourcing.
1. Not all of your time is valued the same
It is easy to assume that if you make $20 per hour, any task that you can pay someone $10 per hour to complete should be outsourced. My normal rate for consulting is $145 per hour. If I was to apply this logic, there are very few things I’d do for myself. But, I have a limited number of hours each month that are worth my $145 rate. Those are my best and highest performance hours. Even if I do 8 hours of consulting in a single day, it isn’t like having someone else mow my yard or sweep my house is going to give me two extra hours of the same high performance output.
If you are doing work that is challenging, you can’t simply tack on more hours and expect to maintain the same quality of output. You need breaks and time doing other things. Hiring someone to mow your yard is only cost effective if that lets you work on something more valuable. If you spend that time fiddling around on the Internet you probably haven’t saved anything.
2. Outsourcing a 10 hour task doesn’t save you 10 hours
The article mentions the tax example. I’ve done my own taxes for several years because by the time I get all the information together and answer the accountant’s questions chances are pretty high that I could be done with the taxes myself. Even if we assume I was much slower, there is a significant time cost involved in passing off a task to someone else.
Consider changing your oil. Even if you have someone else do it, you’ll have to take the car to them, wait for it to be completed, pay them for the service and drive back home. You still have to spend some time getting the oil changed. That doesn’t mean it isn’t an efficient use of your time–just that it usually isn’t a simple trade off of “do I spend X hours or not.”
If you are looking for good things to outsource you need to find things that have the following attributes:
- Low “hand off” overhead or tasks were the cost is amortized over many iterations.
- Significant skill or equipment differentiation.
Getting your oil changed is probably a good example of these two things. While you still have to physically take your car in to get it serviced, it isn’t like you have to spend an hour explaining how you want the oil changed. You just give the mechanic the car and let them do the job. There is also a huge advantage in having the skill and equipment to change the oil. Just getting under my car would be a problem for me, but the oil change place simply drives it over the work pit.
What you want to avoid is spending a lot of time handing off a task that only needs done once. There is almost always going to be some type of overhead involved, but if you are trying to be efficient you want to minimize this as much as possible.
3. Freeing up an hour doesn’t necessarily mean you earn more money.
If I have someone else mow my yard, that doesn’t automatically mean I earn my standard rate for the time they are mowing. It only makes me more money if mowing my lawn was preventing me from doing billable work.
That doesn’t mean I shouldn’t hire someone to do yard work, but I need to be realistic about why I’m doing it. If I hate mowing and want to hire it out, that is a legitimate reason. I just need to be careful not to trick myself into justifying it as a cost savings measure when the reality is I don’t use the height of my grass to determine whether or not to accept a client.
Personal outsourcing can be a very important part of becoming productive, but you have to be very honest and realistic about what you are trying to achieve and what measures will let you achieve it. If you are interested in personal outsourcing you’ll probably enjoy the Ultimate Guide to Working with a Virtual Assistant. It goes into a lot more depth on some of these topics.