S1 Ep145: Employ, Contract or Outsource?

Published: May 16, 2021, 8:30 p.m.

b'

After a while of building your small business, things get busy. That time you were spending on doing your social media, working on your SEO and writing your blogs has slipped away into a black hole of work. It\\u2019s time to bring someone on.
\\n
\\xa0
\\n
This is Clickstarter, the Australian Digital Marketing podcast. I\\u2019m Dante St James.
\\n
\\xa0
\\n
It happens to us all. I\\u2019ve had to bring on people to help me schedule and plan my social media out. I get an AI program to help me choose my blog and podcast topics. And sometimes I even have to pay someone to make my videos and graphics. We all get busy doing the stuff in our business, so taking the time to work on the ongoing marketing is hard.
\\n
\\xa0
\\n
That\\u2019s when you need to start looking at who you can get in to help you with all this stuff. And you inevitably have to ask yourself whether you should employ someone, contract them or outsource it offshore.
\\n
\\xa0
\\n
While it may seem noble to invest in someone as a full time or even part-time or casual employee, it\\u2019s not really the best place to start when you\\u2019re still in the earlier stages of growing your business. People are almost always going to be the most expensive thing in your business. Over a long period of time, they cost more than property and machinery. So if you\\u2019re still making less than 4 times what you need to live on, bringing on an employee is going to take a huge chunk out of your profits. As a rule, I don\\u2019t take on an employee until I know that I have 6 months of their wages, superannuation and tax saved aside. This is so I can afford to take a 6-month loss on them before they start to be a profit centre for me. This takes into account training, reduced productivity as they\\u2019re learning, and the inevitable unexpected downturns in sales that happen to all of us.
\\n
\\xa0
\\n
It will likely be more realistic in the earlier years to contract people to help you out. This is because there are no award wage rules or set rates when you contract someone. They quote their rate, you accept it and you get underway. If you have lots of work for them, you\\u2019ll pay more. If there\\u2019s less work, you\\u2019ll pay less. But understand that the lack of commitment from you comes with a lack of commitment from the contractor too. They can take on other work while they are working for you as well. And that could very well be with your competitors. Most contractors have a personal code of ethics and would either not take on work that comes with a conflict of interest, or would ask your permission first. Bear in mind too, that you will almost always pay more per hour to a contractor than an employee, however, you will also avoid all the added tax and super admin that comes with taking on an employee.
\\n
\\xa0
\\n
Finally, there\\u2019s the offshore outsourcing model. You\\u2019ll pay way less per hour \\u2013 often up to 80% less, you\\u2019ll have the same low maintenance approach that you\\u2019ll have with contractors, but there are some downsides. Communication can be an issue and so can the misunderstanding of expectations. While you might be tempted to outsource your stuff to someone on Fiverr or Airtasker, there\\u2019s always a risk that the work will be substandard or they will completely miss the brief. There is a long training and learning curve before the offshore staff will be making a good return for you. But once they do, it\\u2019s so worth it.
\\n
\\xa0
\\n
To learn more about digital marketing the Australian way, jump into the Learn section at clickstarter.com.au and start on the road to helping your Australian small business to get known, get found and stay known.
'