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.

This Is Where I Was

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.

This Is What I Would Do Differently

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.

  • Save money from your part time job and any cash you make online, even if it’s just from something like selling goods on ebay. Save at least $1000 if possible.
  • Choose a business model you’re going to follow and properly test. In my case, I could have given this advice at the point where I was about to start the proofreading business or blogging.
  • If you know absolutely nothing about the model you are going to follow, or you haven’t selected one, do some research first to find out what path you are going to take. Make sure you understand how this business produces revenue, because your first goal is to get cash flow. At this stage you can purchase a course to learn how, but I’d only recommend doing so if you are absolutely sure it’s the model you want to follow and try not to spend more than a few hundred dollars so you have some cash left over.
  • Your next step is to set up a website of some kind. Rather than work out how to do coding, or use a program like frontpage or dreamweaver, or even install wordpress and do all the tech work yourself, I suggest you take about $300 of the money you have saved and hire a tech person to work for you for a full month full time. The first job they do for you is to set up whatever website(s) you require for the business model you are going after.
  • In my case of the proofreading business I’d have the website set up to sell the service and have a blog built-on to it. In the case of the blogging model, I’d have the tech person create a blog with the right plug-ins and a unique design with an email opt-in box.
  • Once the website is done, I’d take another $300 and hire a full time writer for a month to create content. If I was starting the proofreading business, I’d ask the person to write articles about proofreading based on what keywords I researched were important to bring the right customers to my site.
  • Any remaining time with the outsourcers left over I’d have them do work to bring traffic to the site, either building links or submitting articles to other sites, or creating more websites, or setting up an affiliate program, or designing book covers, or whatever is required to make your business model work. In most cases the important part is marketing to bring traffic, because traffic leads to revenue, so I’d focus my contractors on activities related to that.

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.

Good luck!

Yaro
Creating Cash Flow