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Been Burnt by Outsourcing? 5 Tips to Get Started Again

This is a guest post by Nick Loper

If you’ve been outsourcing for any length of time, odds are good you’ve been burnt once or twice by a flaky freelancer or an over-promising programmer. These experiences, while frustrating and sometimes costly, are part of the ongoing learning experience we all go through in our outsourcing adventures.

You’re not alone.

Since I began outsourcing in 2005 (back then, I just knew it as “sourcing” because I had no other choice!), I’ve had the opportunity to work with some amazingly talented professionals from all around the world.

And on the flip side, I’ve had the unfortunate experience of working with some people I would have been far better off never coming into contact with. I’ve lost thousands of dollars on web development projects gone sour and I’m quite familiar with the deep, painful sting of failure when outsourcing goes wrong.

Yet I still keep coming back for more.

It’s been said doing the same thing twice and expecting different results is the definition of insanity. Am I just a glutton for punishment?

I don’t think so. I try and learn from my mistakes. (And yes, in hindsight I blame myself for making the bad hiring decisions.) My track record is improving.

And yours will too.

For me, the benefits of outsourcing still far outweigh the risks, so I get back on that horse.

This post is for anyone who’s had a negative experience with outsourcing and is wondering how best to start again. Similarly, it could be a good starting point for first-time outsourcers as well.

1. Start Small

One of my biggest outsourcing mistakes was initiating a 5-figure project with a freelancer I knew very little about. Sure, I’d done my applicant screening, due diligence, and interviews, but it still turned out to be a massive hiring error.

What I should have done instead was broken the big project into smaller pieces, to reduce the risk.

For a complex website, you might have one mini-project for the design, another for the database, and another for the application integration, and maybe another still for the post-completion maintenance and support. That puts you in the position of general manager, to oversee all parties and make sure everything goes smoothly.

It’s definitely a bit more difficult to do things this way, but you’re not tied down to one freelancer or company when things start to go poorly.

An added benefit is the ability to hire the best of the best in each skill area, rather than setting for someone who is OK with everything. The finished product will be a better reflection of the talent available instead of a patchwork done by a wannabe jack-of-all-trades generalist.

For virtual assistants, starting small means hiring for a few hours a week to start, rather than diving in headfirst with a new full-time virtual employee. This way you can ramp up at a speed you’re comfortable with and enjoy a lower-cost, lower-risk scenario at the beginning.

After a few weeks or months and building a positive relationship, you can expand the engagement as needed.

2. Start with Non-Mission-Critical Work

This may be counter-intuitive, but it can make sense to start by outsourcing work that’s not central to your business. Of course, you don’t want to hire a virtual assistant just for the sake of keeping someone busy; they need to provide some value for you, but one way to mitigate risk early on is to start them with non-mission-critical tasks.

That way, if they screw up, there’s no harm done to your businesses – and importantly, your customers will never know.

In Anything You Want, author Derek Sivers makes a point of this: “For an Internet business, outsourcing the programming would be like a band outsourcing the songwriting.”

It may not be super-exciting or life-changing at the beginning, but starting your new VA off with some administrative or research tasks can help you get a better understanding for how they work and how they may be able to help out in other areas of your business. For instance, if you find out they really love talking to new people on the phone, maybe they’ll be able to serve as your virtual receptionist or help with customer support.

And on the other hand, if their English and social skills aren’t up to par but the results are otherwise great, perhaps they’d be better suited for more involved behind-the-scenes work.

As far as strategy goes, even offloading a few hours of work a week should free up some of your time and allow you to focus on the higher-level strategic goals of your operation.

3. Make it Fail-Proof

Beyond starting small and starting with non-essential work, you want to do everything you can to set your virtual assistant up for success.

The best way to do this is to create a “fail-proof” step-by-step guide on how to complete your tasks. This has a couple benefits.

First, it should set them up for some easy wins and you can become more comfortable working together. There’s a certain level of discomfort in the unknown on both sides of the outsourcing relationship at the beginning and providing some “can’t miss” direction shows you’ve got your act together and allows your VA to execute.

Second, the time it takes you to create the process documentation is not lost. Especially if this task has to be done on an ongoing basis, you’ve essentially created the dummy-proof instruction manual that anyone with a certain level of competence can be plugged into.

Note: If your VA fails the “fail-proof” process, you should first take another look at the process documentation. But if it truly is operator-error, get out now! There’s no sense in working with someone who can’t follow instructions

4. Consider a Company over a Freelancer

When you’ve been burnt by a virtual assistant company or overseas development company, the tendency is to look toward a freelancer as a replacement. But freelancers carry certain risks of their own.

Even though I’ve had good luck with freelance virtual assistants, there are a few reasons you might consider a company environment if you’re just starting out or have had a bad experience in the past.

First, a company is typically more aware of their reputation online and will work hard to protect their good name. A freelancer may not even be using their real name; they could be here today and gone tomorrow and you might never know what happened.

Virtual assistant companies will have backups in place if your VA isn’t performing or disappears for some reason. Even though the rates are generally a little higher, this small bit of protection can make it worthwhile.

And finally, you get managerial support – both for you and your virtual assistant. That means someone is typically onsite managing your workers and providing help when needed, and you have someone to call with any concerns. With a freelancer, all you have is the freelancer.

5. Create an Early Escape Clause

One thing I like to do with new engagements is to build in an “early escape clause.” This is essentially a two-week or 1-month trial period for virtual assistants, or an early milestone deliverable for development work

With virtual assistants, they understand they will be paid for their time but are under evaluation until the 2 or 4 week period is up. I’ve only had to exercise the escape clause one time but I was glad to have it.

Note: Unless you have a long-term contract (negotiated for a lower rate perhaps), you can terminate your relationship at any time. Sometimes a 30-day notice is required but other than that you shouldn’t have any locked-in obligation. The escape clause is just a formal acknowledgment from both parties that the performance will be reviewed in short order.

With development or other project-based work, if the agreed-upon deliverable is not completed, there should be some monetary penalty (ie. you get a refund or partial refund), and you should part ways. If they can’t complete even the first small milestone on time, that’s not a good sign for the project as a whole going forward.

The escape clause works both ways too – the virtual assistant or VA company can pull the plug on you after the trial period if you’re a terrible client. Otherwise, it would be a little too one-sided, right?

Wrap Up

Like any business, you’re bound to make mistakes and experience your share of failures in outsourcing, but you can’t let it scare you off for good.

It’s like learning how to ride a bike. If I quit the first time I fell off, I never would have learned. The suggestions above should provide some actionable tips for getting back on that bike if you’ve fallen off, or for getting started if you’re a new “rider.”

What’s been your biggest outsourcing headache or nightmare? Let me know in the comments below!


Nick Loper is an online entrepreneur, author, and lifelong student in the game of business. He is the Chief Side-Hustler at SideHustleNation.com, a growing community of part-time entrepreneurs.

Nick is also the founder of VirtualAssistantAssistant.com, the leading directory and review platform for virtual assistant companies.

Brian Djordjevic
About The Author

Brian Dordevic

Bojan is Marketing Strategic Planner with a passion for all things digital. Feel free to follow him on Twitter or schedule a consultation call with him.

3 responses to “Been Burnt by Outsourcing? 5 Tips to Get Started Again

  1. I’m definitely aware of the challenges of outsourcing, since I have been reading a lot of personal experiences from business owners who choose to startup an outsourcing business. This one in particular caught my attention – http://startupplays.com/blog/zero-to-mvp-in-11-weeks-with-outsourcing/
    Like you, I love the way they describe how they’ve survived the hardships of finding that ideal outsourcing staff for the job. Thanks a lot for sharing your experiences as well.

    1. Hi Mary,

      Glad you enjoyed the article! Outsourcing is one of those areas where it’s often useful to learn from the experience of others.

      Thanks for your comment!

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