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How Many Hats Should You Wear? When to Outsource As an Entrepreneur

September 26, 2021
By James Gussie

When you start a business, it can be tempting to do everything yourself. However, not everyone is cut out for entrepreneurship and sometimes outsourcing is the better option. Here’s how to know when you should outsource your work as an entrepreneur.

Outsourcing is a great way to grow your business. You should outsource when you have a lot of work, or when you are good at something but not good enough to do it all yourself.

Starting a company has never been simpler. With the variety of funding alternatives and free internet tools accessible, almost anybody with a brilliant concept and a strong business sense may begin their journey into entrepreneurship.

When it comes to starting a company, there are many responsibilities that entrepreneurs must do. Before securing financing, there is typically little money for increasing personnel, so many entrepreneurs are compelled to wear many hats, dabbling in accounting, customer service, copywriting, design, and so on.

However, if you get into the habit of working 16 hours a day and attempting to do everything yourself, it may be difficult to take a step back and determine when you should start outsourcing certain activities. Even if you don’t have any financing yet, outsourcing certain activities is simple and inexpensive, and it may help you achieve your objectives quicker than attempting to wear all the hats at once. As an entrepreneur, here’s everything you need to know about effective outsourcing.

Table of Contents

Outsourcing’s Advantages

“As an entrepreneur, you are a problem-solver,” Fortune 500 Product Manager Andre Bourque said in a CIO article. Don’t allow that strength become a liability by taking on too many procedures that might be handled more effectively by outside experts.”

For example, if you want to learn more about your market and what makes them tick, it may be a good idea to hire a data analyst to assist you create an algorithm that will help you learn more about them.

Netflix employs algorithms to figure out what makes individuals tick, and they’re very good at it—algorithm suggestions account for 75% of Netflix customers’ activity. However, until your company has developed enough to justify employing someone full-time, you’ll have to roll up your sleeves and do it yourself—though outsourcing may be a fantastic third option.

It may be a wonderful alternative for entrepreneurs when employing full-time employees isn’t an option for a small firm, particularly if it’s bootstrapped. Payroll and benefits are costly, especially if your workers wear several jobs. Hiring a short-term or skill-specific contractor may relieve you of some of the legal and tax responsibilities that come with hiring in-house employees.

Another advantage of outsourcing to a freelancer or agency is that you can typically employ someone with particular experience. When I counsel entrepreneurs on how to grow their teams, many of them are only interested in recruiting someone with a wide skill set who can handle a variety of tasks. This, of course, makes sense. You want to get the most bang for your buck. But, as I discovered when I began my first company, you need to strike a balance between multi-skilled employees and those that specialize in a particular field.

What I’ve discovered is that with specialists, you not only have someone you can rely on to deliver, but you also have someone who is dedicated to studying the area and keeping up with current trends. This isn’t always feasible for those who take on a lot of responsibilities and stretch themselves too thin.

Outsourcing’s disadvantages

Outsourcing does, however, have certain disadvantages, as with most things in life. To begin, you must be ready to relinquish some power. Depending on your personality, this may be tough for you. It’s risky to delegate and trust someone with any aspect of your company, particularly someone you don’t know personally. There’s no avoiding it.

The toughest aspect about delegation, according to Tonya Thomas, president of The Small Business Assistant, is letting go:

“At first, I felt that I was the only one capable of doing the job effectively; I wanted control over everything […] but I wanted my company to thrive, so I had to let go and start delegating,” she adds.

Outsourcing comes with its own set of expenses, and hiring the incorrect individual may be a huge waste of time and money. It’s critical to invest in your company’s development, but taking the initial steps towards outsourcing may be intimidating. It’s entirely up to you to choose someone competent, which may be intimidating—at the conclusion of this post, I’ll give you some pointers on how to discover the finest prospects.

Keep in mind that outsourcing or even direct hiring won’t relieve you of all your responsibilities in any given area. You’ll need to interact with, develop, and assist them prioritize and balance their duties after you’ve recruited one or more people—management takes time and work.

When is it appropriate to outsource?

There is no secret formula for determining when to outsource, but every business recognizes when they have reached their limitations. There’s only so much a single individual can do. Perhaps it’s a shortage of time—you’re attempting to work on a marketing strategy, but the financials demand your attention (now’s the time to employ a financial expert!).

Or maybe you’ve made some errors that have cost your company clients or money. Perhaps you’ve discovered that you don’t have the deep talents you need in a certain area; learning new skills is a time-consuming process that may not be the greatest use of your time. It’s sometimes easier to simply employ someone.

However, don’t underestimate the potential of digital technologies when you’re initially considering outsourcing. For a price, automation software can handle tasks like email follow-ups, freeing up your time and allowing you to concentrate on other essential tasks—but, particularly for small companies, be wary of the “set it and forget it” fallacy. The person in charge of supervising and monitoring automated processes is just as important as the automation itself.

Consider beginning small—outsourcing jobs will become less expensive over time, and you’ll learn how to employ more effectively as you go. Even simply employing a virtual assistant or personal assistant may relieve you of a few responsibilities and allow you to develop more quickly!

What are the finest jobs to outsource?

Only you, as the business’s creator, have the authority to decide what to outsource based on your expertise (and weaknesses). Be truthful to yourself. You probably don’t need another web developer on your team just yet if you’re a web developer. If you’re a writer, you may put off buying content for the time being.

Some jobs, however, are simpler to outsource than others, such as:

Web development and upkeep
Design for the web
Use of social media
Accounting
PR
Writing/content

Even something as basic as sending an email may be useful to outsource. College Hunks Hauling Junk’s Nick Friedman hired a virtual admin to sift through and prioritize his correspondence, enabling him to reply more quickly.

Tip: Don’t simply go with the cheapest choice.

Let’s get one thing straight: choosing the lowest choice just because it is less expensive will not benefit you in the long term. I’ve worked with a lot of companies that had hired the cheapest person they could find to make their site mobile-friendly at first.

I warned each of them that this was a bad plan, since mobile will soon overtake desktop in terms of consumer traffic. Because mobile shopping wasn’t popular at the time, many of them scoffed at me. Some people paid attention. What’s more, guess what? As of 2017, one of the most important sectors is mobile commerce (m-commerce). By 2020, smartphones are expected to account for $129.44 billion in total retail sales.

And, to be honest, several of the same businesspeople who scoffed at me subsequently returned for a second round of advise. When making personnel choices, learn from their errors and make sure you’ve evaluated the costs and advantages.

Find the appropriate tools and people to help you.

Now you’re probably thinking how to locate skilled individuals to assist you in growing your company. Rather of depending on a single technique, it’s better to use a variety of approaches. You’ll always have fresh leads, and you’ll be able to pick and choose what works best for you.

Here are some suggestions:

Make the most of your connections. Ask your friends and relatives if they know anybody who may be interested in helping you with some tasks. Join entrepreneur-focused Facebook and LinkedIn groups and ask for recommendations—people who have been in your shoes may frequently provide invaluable advice.
Keep your ear to the ground and ask for references at networking events—personal recommendations will help you discover the finest of the best.
Make sure you’re looking in the correct areas. Don’t expect to discover a competent expert that will invest in your company on Fiverr. Instead, use a skills-specific employment board and social media to network.
Before you publish, do some research on the going pricing for the services you’re looking for. Quality freelancers are aware of their value and will not take a job for less than a reasonable fee.
Inquire about work samples. Don’t worry if someone doesn’t have a beautiful portfolio—as long as they have strong samples of their work, you’ll get a decent idea of how they’ll perform for your company.
Before entrusting your applicant with a bigger job, need a (paid) test project to establish your criteria and check whether they can match your expectations and follow instructions.
Pay attention to the questions that candidates pose. Someone that is interested in bringing value to your company will have just as many questions as you do. Simply attempt to strike up a discussion and utilize it to determine if your company and the applicant are a suitable match.
Last but not least, go online and do some research! There are plenty of free and paid organizing tools, accounting and time tracking software, and websites of companies and freelancers that may assist you. All you have to do is take a look!

If approached carefully, hiring outside assistance may offer your small company a significant boost. Remember to write down your expectations, particularly if you’re outsourcing a project. Ascertain that everyone understands the scope of the project and the anticipated outcome.

Most importantly, be honest with yourself about your abilities—being self-aware enough to recognize when it’s time to bring in someone with knowledge you lack will put you ahead of the game in the long term.

Frequently Asked Questions

How many hats does an entrepreneur wear?

An entrepreneur wears many hats.

What is the dress code for entrepreneurs?

The dress code for entrepreneurs is very important. It is essential to look professional and put together while at work, in order to maintain your credibility while also making a good first impression on potential clients.