Pros and Cons of Outsourcing
Running a design business, either as a freelancer or a small agency, is a big challenge. Getting the most efficiency out of your time is essential, but it’s also very difficult for those who wear many different hats, like freelancers. One of the most common ways of dealing with this challenge for efficiency is to outsource work to others. It could be anything from design work, front-end development, back-end development, marketing, to anything else that needs to be done.
There are some very strong reasons for outsourcing, and likewise the are some equally strong reasons against outsourcing. In this article we’ll look at those pros and cons, which will hopefully prove to be helpful to those who are trying to decide on whether or not to outsource.
Pros of Outsourcing
1. Leverage Your Efforts
Whether you are a part-time freelancer, full-time freelancer, or you run a design agency, the business aspect of your work is just as critical to your success as is your ability to design and/or code. One of the principles that is key to growing a business is that you need to be able to leverage your time and efforts. As a one-man operation you will only be able to earn money for the services that you can provide to clients yourself. But by expanding your business, in this case through outsourcing, you can leverage your efforts and make money based on the work of other people as well.
This makes an assumption that one of your priorities is to maximize income and profits, which may not be the case with all designers. Some designers prefer working on every aspect of client projects rather than outsourcing or hiring employees, even if it means reduced potential for business growth.
2. Potential for Higher Income
By leveraging your efforts through outsourcing you are able to increase the potential income of your business. If you outsource projects, or portions of projects, efficiently you will be able to take on more projects or larger-scale projects. Also, your income potential can be increased if the cost of outsourcing the work to someone else is lower than what it would cost you (in terms of the value of your time) to do the work yourself.
While outsourcing work to others may increase your expenses, it also frees up more time for you to do other things, which should allow you to increase your income. Maybe the time that you save can be used to work on marketing your services, other client projects, developing new products and services, or administrative work related to running the business.
3. Increased Efficiency
Like any business owner, you will never have the time to do everything that you want or need for your business. However, outsourcing some work can help to free up time that will allow you to focus on the things that you determine are most important. The increase in efficiency comes when you are able to spend a little bit of money (comparatively) that will free you up to do work that will help you to make a lot of money (comparatively).
In addition to freeing up time for other work, you can also choose to work fewer hours and use that time that you gain from increased efficiency for time away from work. Most freelancers and self-employed designers work long hours, sometimes by choice and sometimes not by choice. If you’re looking at ways to reduce your hours and spend more time with family and friends, outsourcing is a possibility.
4. Allows You to Focus on Your Strengths
One of the downsides to being a freelancer is that you have to do everything for your business, whether it is an area of personal strength or weakness. By outsourcing some work that is not in your strongest areas you can free up more time to work on the things that you love, and in areas that you excel. Some freelancers choose to hire virtual assistants to handle as much of the administrative work as possible, freeing them up for more creative work. Some designers may not be as adept at coding and may choose to outsource development services while focusing on the visual design instead.
Even if outsourcing doesn’t increase your income, if it helps to make your work more enjoyable by eliminating or reducing some of the things you dislike, it may be worth doing.
5. Turn Away Fewer Clients
Many freelancers and small design agencies wind up turning away a lot of potential clients for any number of reasons. It could be a lack of time to work with all the potential clients, lack of experience or skill in a particular area, lack of desire to work on a certain type of project, or a client whose budget is too small. All of these issues can possibly be addressed by outsourcing, meaning that you could provide a solution to more clients, even if you are not doing all of the work yourself.
Turning away fewer clients also means that you’ll have more paying clients. If you can manage to outsource projects efficiently and effectively, it can result in a higher income, even if it is from projects that you wouldn’t want to accept without the possibility of outsourcing the work.
6. Segmenting Projects is Possible
Outsourcing work doesn’t mean that you have to outsource the entire project. Especially when it comes to web design, there are opportunities and possibilities for outsourcing a particular segment of the project. An example that many freelancers do is outsourcing of coding work. There are countless PSD to HTML service providers who are able and willing to take your designs and turn them into working, coded pages. The price varies from one provider to the next, but in many cases you could get the coding work done for much less than if you did the work yourself (in terms of the value of your time). It’s not ideal for all situations, but many designers find it to increase their efficiency. In this case you would still be dealing with the client directly and you would be doing most of the work on the project yourself, you would simply outsource one aspect of the project.
7. Transition from Freelance to Agency
If you are currently freelancing and you would like to run a design agency with employees at some point in the future, outsourcing can help with the transition. Very few freelancers or independent designers have the financial capability to take on an employee with a set salary and benefits without funding, but outsourcing work is much more feasible. While outsourcing you can get a feel for who you might like to hire as an employee when the time comes, and you can work to increase revenues and build the business to a point where you could hire an employee.
Cons of Outsourcing
1. Your Reputation Depends on the Quality of Others’ Work
When you are outsourcing part or all of a client project, the client may or may not be aware of it. Either way, your reputation is at stake. One of the most significant reasons that designers choose not to outsource is because of concerns over the quality. There are plenty of people that you could outsource to who would do a great job for you and your clients, but there are also others that wouldn’t live up to your expected level of quality. Finding the right people to work with is not always easy.
If you outsource work and the project doesn’t meet the deadline or doesn’t turn out as the client had expected, your reputation can take a hit. This is especially true in situations where the client doesn’t know that you are actually outsourcing, because they will think it is your own work that is lacking. Even if the client does know that you are outsourcing, they are trusting you to manage and oversee the project, in which case you are still responsible for the results.
2. More Administration and Oversight Work
While outsourcing can help to free up some of your time, it also means that you’ll have more administrative and oversight responsibilities. This includes paying invoices and added financial record keeping, finding and interviewing the right people, communication, and in some cases supervising progress. Ideally you can find people who need very little supervision whom you can trust to do quality work, but those relationships usually take some time to develop.
3. Can Make You a Middleman in Communication with the Client
In most cases, when you are outsourcing work you will still want to be in direct communication with the client, which means that you will be a middleman of sorts. Communication becomes more challenging when layers are added, so it becomes even more critical in this situation. You may be gathering feedback from a client and passing it on to whoever is doing the work, which increases the possibility for miscommunication or misunderstanding. Additionally, it means that you’ll still be dedicating time and effort to the communication rather than being able to pass it off to someone else.
In some cases you may be able to have the client and the service provider communicate directly, but this is not always possible or practical.
4. Reduced Control Over Meeting Deadlines
Being able to meet deadlines is a critical to keeping your clients happy. As you outsource parts of the project, or the whole thing, you will have less control over when the work is complete, as you will be relying on the person that you have hired. This is just one of the reasons why you need to be very careful about hiring the right person. Also, it’s a good idea to build in some time for unexpected delays by setting a deadline for the service provider that is at least a few days prior to the real deadline of the client. That gives you time to review the work and to deal with any setbacks.
5. It Takes Time and Effort to Find the Right People
Outsourcing is, of course, most effective when you are working with the right people. Ideally, you’ll have qualified service providers that you can work with on an on-going basis rather than needing to find someone specifically for each project. Outsourcing becomes a lot more practical, efficient, and profitable when you already have the right person for the job.
Unfortunately, finding the right person (or people) can be a real challenge, and you may go through some bad experiences along the way. During this time it means that you’ll be dedicating extra time for finding the right people and evaluating their work. At this stage you may find that outsourcing actually takes just as much time as doing the work yourself. The upside, of course, is that once you’ve found the right people it takes much less of your own time and becomes more profitable.
6. Potential Instability of Your Team
The challenge doesn’t stop with just finding the right people. You’ll also have to keep them as a part of your team once you have found them. With outsourcing, you may be working with different people all the time. When you’ve found someone that is good to work with, they may move on to a different path in their career and you may have to find a replacement. There is often less stability and more turnover than you would have if you were hiring an employee.
7. Clients May Not Be On Board
Some of your clients may have chosen to hire you because they are familiar with your work and they really felt that you would be great for their project. In situations like this, the client will want to work with you, not with someone to whom you are outsourcing the work. Of course, there may be parts of the project that you could outsource without having any real impact on the client, and they may not even know about it, but it’s still something to keep in mind.
As a general rule, if you build your brand around your personal skills, expertise, and experience, outsourcing work may seem deceptive to clients. This will also depend on what parts of the project you are outsourcing. As a designer, you will be hired for your creative abilities, so outsourcing the visual design would more be more likely to cause conflict than outsourcing coding.
You Must Decide for Yourself
As with just about anything in life, the pros and cons mean that there is no absolute right or wrong decision when it comes to outsourcing. You’ll need to weight the pros and cons and see how they fit with your goals, your process, and your way of doing business. If you have words of wisdom from your own experience, please feel free to share in the comments.
Published February 2nd, 2012 by Steven Snell