How I Used Outsourcing To Increase My Freelance Income
By: Jovan Cicmil
Tags: Productivity, Outsourcing, Freelancing, Software Development, Business

How I Used Outsourcing To Increase My Freelance Income

Image Courtesy of Author

When you begin working as a freelancer, you can find yourself increasing your earnings steadily every month. However, growth inevitably slows down after some time and, eventually, earnings plateau.

How can a freelancer keep increasing their earnings after they’ve filled up their entire schedule and raised their hourly rate as far as it will go? There are several possibilities, including investing, starting a company, and skill stacking.

In this article, we will focus on a different approach: outsourcing. The concept of outsourcing is simple:

Step 1: take on a project and agree on a price

Step 2: pay someone else to do a part of the project (or the whole thing) for less than that price

Step 3: oversee the work and verify quality

Step 4: use the time you just freed up to do other work

Thus, the difference between your fee and the fee you pay your subcontractor represents your net earnings. If done right, this is relatively easy money. However, there are several important caveats to consider. Here are 6 rules to keep your outsourcing efficient and productive.

Trust over profit margins

Consider this situation: a client wants a $1,000 project done. You want to outsource it. A freelancer that has done good work for you before wants $800 to do the work. A different freelancer whom you know little about wants only $500.

I would always go with the one I know. I might test the other’s skills and dedication with a smaller project to find out whether he’s a viable option for the future, but I would never risk my client’s satisfaction and my own reputation over $300. You wouldn’t test the temperature of water by jumping in, would you? Always dip a toe first and see how you like it.

It takes time to build trust. Furthermore, people who seem trustworthy on the first impression often turn out to be the opposite. You can minimize your chances of getting burned by testing the waters with small assignments and not outsourcing crucial parts of the project.

Don’t forget, if the person you hire disappears, you still have to deliver to the client. This means late nights and unnecessary stress for you. Worse still, if your subcontractor completes the project but it’s not of satisfactory quality, you have to pay them and re-do a lot of work.

Never outsource communication

We all have our trademark style of writing and, especially, speaking. When we outsource work, we are taking on the responsibility that the technical execution will be up-to-par. This is burdensome enough without taking responsibility for the words that come out of someone else’s mouth.

Besides, letting someone communicate on your behalf really pushes the trustworthiness aspect to the limit. The contractor can be tempted to skip the middle-man (you) and do business with the client directly. They can also create a disagreement with the client which you then have to iron out.

Last but not least, you need to maintain control of communication so you can spot opportunities for upselling.

Avoid time zone trouble

Imagine your client is in the Pacific time zone. So are you. But, you have a subcontractor in Europe doing a part of the project. Now, imagine that your client needs something urgent done at 4 PM, while your guy in Europe is sound asleep at 1 AM.

You can’t justify not doing the urgent work for the client and you can’t make someone work in the middle of the night. So, what can you do? Drop whatever you’re doing and work for this client. This means delaying other work, getting acquainted with what your subcontractor has been doing, and fixing the problem before you can get back to your regular schedule.

Someone in a different time zone may do better work and be cheaper as well, but the time difference alone is enough to make me go with a geographically closer option.

Never outsource what you enjoy most

We’re not robots and life is more than productivity. Some projects are rewarding, fun to do, and they inspire us to be at our best.

For instance, I have been building stock market analysis software for a client for over a year and I have never even considered outsourcing any portion of it. I love working in this niche, I enjoy working with this client, and the project is helpful to my own financial edification. That is far more important than optimizing your earnings by 10% or 20%.

Never have too many balls in the air

Outsourcing helps you scale your freelance business to an extent, but it is limited. If you try to do too much, you end up getting bogged down in communication all day long, switching from project to project every 15 minutes, and generally being miserable.

Know your limits. How many projects you can outsource depends on how good your contractors are, how well they communicate, how reasonable the clients are, and how busy you are. Working on a full-time project and managing communication for eight others will not make you a happy person. Furthermore, the more projects you manage, the greater the odds of serious errors creeping into the products and damaging your reputation.

Filter on language skills

Never hire a subcontractor that has poor English skills. They may be the greatest technical mind in their field, but you must optimize communication in order for this arrangement to be worthwhile.

Ideally, you should be able to simply forward a task from the client to the contractor and not hear from them until they are finished with it. If you have to explain every task (or, God forbid, translate it) the time burden can easily increase to a point where it would be more efficient to just do the work yourself.

Conclusion

Outsourcing can help you scale your freelance business with relatively low additional effort. However, if you are not wise about it, it can produce stress, create strife with the clients, and overburden you.

It is a tool best used in moderation and with considerable tact.