The real cost of doing it all.
New businesses often struggle with the concept of outsourcing and have the mantra "If I can do it, why would I pay someone else to?" This can be a slippery slope that can cost the business owner more than what is saved by keeping everything in-house.
Opportunity cost
Opportunity cost is the cost of the forgone alternative that you could be doing with your time. If you are not tech-savvy and it takes you five hours to make a website for yourself, what else could you have done with that time? How many more client needs could you meet if you did not spend your time doing what a web designer could do in half an hour?
The bill for them making your site -- say, $200 -- could have freed up time and allowed you to do $350 in additional sales. Therefore, the net impact of your decision to outsource made you an additional $150. It is important to understand opportunity costs when you are deciding to outsource.
Synergy
Synergy is when a partnership creates more than the sum of the parts. If the web designer creates your website in an hour and you spend the gained hour providing goods/services to your clients, then it was a synergist relationship. Alternatively, if it took you four hours to create the same site, you now have less time to run your business. Play to your strengths. Efficiency and effectiveness will result.
Common services to outsource:
- Product manufacturing -- established manufacturers often have a lower cost per unit than taking the production in-house.
- Accounting -- accounting firms may be able to keep your books and file for you in half the time it would take a small business owner.
- Marketing -- not only are experienced marketers going to produce a more effective result, but they can also do it much quicker.