Insource, then Outsource


I remember my first office.

Mimi was showing me around, she explained that we were going to have to share the office at first, but as soon as they finished the renovation, the office would be all mine.

It wasn’t much. A desk, a small window, and a door.

I was really excited, but also really nervous. After freelancing for so long I knew I was a self-starter, but I had never managed anyone before.

Towards the end of the day, nervousness gave way to terror.

Mimi explained, that one of my team members was an intern named Kelly. She was still in high school, and had been with the company for years. 2/3 of the rest of the starting team was Kelly’s best friends.

Kelly had tried to quit, but the company wouldn’t let her, even though many of them wanted to see her go.

“If she wants to quit,” I asked, “Why won’t they let her go?”

“David won’t let them let her go. He wont let her quit either.”

David was the CEO.

“What does that have to do with it?”

“He’s her dad. I’m headed out. See you tomorrow,” she said as she left.

I quietly shut the door behind her, and climbed underneath my desk to hide.

I had just learned what private offices were for.

Being the boss’ daughter’s boss

Being the boss’ Daughter’s boss, was one of the best misfortunes I could have possibly had in my career. I knew that she was unhappy, and I understood why.

One of the first things I asked her and her friends to do was to make me a list of the previous responsibilities they had to do.

As an intern, all of the monotonous chores had rolled downhill and landed on her desk. Data entry. Updating needless spreadsheets, etc… For years all of the interns had been treated like robots, and they were running out of batteries.

In any other company, where the interns were there voluntarily, they would have had to buckle down and do the work. But at this company, as one of the boss’ children; sticks were not very effective. Her previous supervisors adjusted for this by swinging harder.

I knew I had to do something different.

Automate the monotonous

I wanted to try something different. I told everyone to hit the reset button, and make me a list. I asked them to give me a list of all of their most tedious chores. Any task that they did more than once a day, I wanted to know about it.

I then asked them what about the job was fun, and interesting. I wanted them to work on those projects. Everything repeatitive? I would handle from that point forward.

If sticks weren’t going to be effective, I had to use carrots. Being a low-level manager, I couldn’t motivate them with compensation, so I had to inspire them to create value for the company.

But that meant that I had the monotonous workload of 5 team members.

I would need to automate.

As a small business owner, it is just as easy for you to become fatigued as well. Over time all those little tedious parts of the job begin to take their toll. They add up, it can be really difficult to stay passionate about your craft.

Staying social helps — networking with peer small business owners for a bit of commiseration, but that too can take its toll.

When I work with small business owners, I encourage them not to think of themselves as an individual but as a collection of roles. Inventory all of the different hats you wear in your business, and rank them as far as the value it creates for your company.

It becomes obvious quickly, that the highest paying “roles” are also the most creative, inspired, and unique. When I complete this exercise with small business owners the same pattern always emerges. The highest paying roles are the most fun.

Insource before you outsource.

You could outsource the most tedious “low paying” roles to an intern, or a virtual assistant. That is a great option, but you will end up where I ended up with my interns. Asking humans to do the robot work.

A better way, is to “insource” the most tedious tasks to automation software.

I call all my little automations my “pet robots.” They are my army of employees that are happiest doing the repetitive tasks. It is what they were designed to do, they crave repetition, it is their sustenance!

They work around the clock, they do exactly what you tell them to do, and the amount of work they can handle scales nearly infinitely.

As a business owner, you are very similar to that team I had early in my career. Only all too often you are forced to be the interns and the manager. It can be exhausting wearing all of those hats.

So make sure to wear your favorite hat on top, and let the pet robots wear your heaviest ones.

Summary

Here’s how you can get started today. You likely have a list of todos for this week, and next. If you are exceptionally organized, you probably also have a list of chores that you need to complete for each product or service you sell as well.

Take that list of chores, and calculate how much time each task takes to complete, and how much per hour you would have to pay to outsource that work.

That is actually exactly how much you are paying yourself to complete those tasks. If you have the “time budget” to complete them, then it might make sense to pay yourself that much per hour to complete those tasks. But its also how much you are earning to not take a couple-hours vacation.

Now, put a star next to each item that can be automated. That is an opportunity to pay yourself residual income, by insourcing. It takes a bit of practice to know which tasks can and cant be automated, but generally speaking it can be automated if:

  • You would pay somebody less than $10/hr (US) to do it
  • The “task” is actually a series of little tasks that take less than 5 minutes each to complete
  • The little tasks usually take place on a computer, but not always (mailing postcards, handwritten notes, etc)

Now that you have done that, lets take a new look at your list and add up all the hours saved by automation and multiply those hours by the hourly wage you came up with to complete each task.

Next, take the same number of hours you would spend on the “automatable” chores, and multiply that by your core hourly wage (this is typically what you charge your customers, less physical supplies and consumables).

Now, add those two numbers together, and you have the potential revenue that you can generate from automation.

However, if it was only about the money, we would have all become lawyers.

The real treasure you gain, is the time spent with your passion. That’s why I love what I do, because you love what you do, and I get to introduce new ways for you to spend more time doing it.

A trial is worth a thousand words.
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