I read through the comments that were left to my previous post regarding the changes I’m making to how I outsource. You can read the post and the comment stream that follows it here –
I noticed that there is one consistent roadblock that people refer to as the reason why they don’t outsource…
A lack of cash.
It’s a catch 22 situation. You need to outsource in order to get your business going so you can make money, but you need money to pay for outsourcing.
During the start-up phase of your business the most important objective is to build momentum. Momentum leads to cash flow and cash flow leads to leverage when you can do things like hire people to help you. So how in the first place do you build momentum?
In order to answer this question I had to think back to the very start of my journey online, before I had cash flow, when I had very little money in the bank and outsourcing wasn’t a concept I was even aware of. Even if I was, I would not have spent what little money I had on things I felt I could learn how to do.
Given what I know now, here’s what I would do differently if I was to go back and advise myself when I was just starting out.
I won’t go back over my entire business history because I’ve already done so in numerous previous blog posts (you can start with my business timeline if you haven’t heard my backstory before).
In summary, I went online in 1998, played with the web for two years, spending my time on newsgroups, forums and surfing for information on the things I was interested in at the time. I then created my first website, and over the next two years slowly built it up until it had a small audience, which I monetized with banner ads, making about $500 a month from it while studying at university.
This is a good place to start from because I wasn’t making much money. Although my website could make up to several hundred dollars a month reasonably consistently and I had a part time job paying me $25/hour, working about 15 hours a week, my living and “fun” expenses pretty much ate up most of my cash. I was saving a few hundred dollars a week, mostly because I didn’t drink and alcohol can apparently be quite expensive (if you need cash – quit drinking for a while and see how much you save!).
Shortly after this I would go on to start my proofreading business, then get into blogging a few years later.
Throughout this entire time I did everything myself. I built all the websites, including countless hours lost to making minor design tweaks because I wasn’t very good at HTML. I handled all the emails, I chased up and billed sponsors, I worked on the SEO for all my sites, I created all graphical elements, managed the servers, installed scripts and I handled all the offline marketing and administration issues.
While I learned a lot during these years, it was a terribly slow way to build momentum, and I was frustrated and confused. On top of this, I didn’t know if anything I was doing would work, so there was always that sense of self-doubt present as well.
I’m confident that my experiences growing my business are fairly typical, but of course in hindsight I would do things differently. If I was to sit down with that Yaro from all those years ago and advise him on what to do, this is what I would say. Hopefully this advice is helpful to you as well.
Bear in mind this whole time you haven’t quit your job. You’re still working, so you have cash flow coming in, but your business has started with the help of outsourcers. All the above steps can be done in a month with help from outsourcing, spending less than one thousand dollars. The alternative, which was my reality years ago when I started my first projects, was to spend as much as six or even twelve months to get just these basics set up. That’s just too slow.
Cash flow is at the heart of business momentum, and until your business generates enough cash flow to pay for outsourcing, not to mention your own living expenses, you’re going to have to keep working your job.
In my case I worked my part time job for years, but instead of using the money I made to help grow my business quicker, I left it in the bank because it felt safer to do that. I ended up with a couple of thousand dollars saved, and literally years “lost” because of how slow it took me to get going.
I don’t begrudge this experience. It served its purpose for my growth and I wouldn’t be where I am today without it. However you can benefit from my hindsight and all the amazing resources out there now to help with this sort of thing.
If a lack of cash is the only reason you don’t outsource now, that is not a good enough reason. Save up some money, hire a person for a month and see how much more you get done. If you get good at finding good people to help you, you’re momentum building phase can take months, rather than years. From there you can reinvest business cash flow to increase momentum and you have created a positive reinforcement loop, which is an incredibly good foundation for a healthy business that doesn’t rely only on you.
Creating Cash Flow