Outsourcing your way to passive income
This week it made me extremely happy when I found a book that I had been eyeing on Amazon for free, just needed to pretend I’m Jack Nicholson and say my email is email@example.com and I was golden.
The book was clearly written in order to promote the authors’ own company that specializes in the field of outsourcing for IT companies, which was kind of a let down after reading Eric Barker’s Don’t Bark Up the Wrong Tree, but hey, it was free and I was able to spin some of the good stuff from the book into a different yet basically related topic so I’ll call it time well(ish) spent.
Why the book didn’t include anything revolutionary
I’ve outsourced before, as have most Finnish companies and entrepreneurs at some point, maybe even without realizing it. Accountants are often an overlooked part of outsourcing, but they’re outsourcing nevertheless.
Personally the level of outsourcing I’ve gotten to at the height of it all was when I was still living in Scotland and running my first business mainly focusing on content writing a few of years ago. During that five month period before moving back to Finland I had two writers, an editor and a virtual assistant, all working between 20-30 hours per week for me.
I had been writing content for over two years by the time I started my first company and I always wrote my own content. The reason I started outsourcing was that I didn’t have enough time to attend lectures and focus on my law studies, and I was also missing out on a lot of fun social events, not to mention the lack of free time.
In the business world this would be relative to a project that needs to be finished faster than you’ve got the capabilities for, thus it would end up having the same effect on your and your employees lives. Well, not their law school studies, but you get the gist of it.
Anywho, that’s when I started putting together a team to help grow the business.
Though the writers were living in the USA, the editor in Canada and the virtual assistant in the Philippines, I felt like we were a team, and most importantly, the people I had outsourced my work to said they felt so too.
I focused in bringing in clients and communicating with them. The work I got was passed on to my assistant to handle and schedule on our Trello board, where she would add the writer who was better suited and had enough time to complete the article before the deadline. The writer then informed others that they were on it by placing it in his or her queue. When they started work on it they placed in in the in progress list and started a Toggl timer to make sure the article was not taking up more time than anticipated by me, because that would mean the writer would be getting less pay for more work.
After the writer was done with the article, they would place it in the awaiting edits list and added the editor to that card, informing them it was time to get to work on the editing part of the pipeline. The editor would then take the card and place it in the editing in progress list and start another Toggl timer for the same reason as the writer did. After the work was edited I usually wanted to read it through, so it was placed in a final check list and I was added to the card. I read through it and when I was happy with it I would put it in the ready for delivery list and notify my virtual assistant. She would then deliver the work to the client and finally place the card marking the point for that article on the pipeline into the list called “Ready & delivered”.
In the image above – a Trello board that I had with one of our regular customers that was used to bring in the work and the client also kept track of their own progress within their content pipeline with the board – although as you can see some of the work is still in the drafted pending publication stage and I haven’t worked with the client since January of this year, but we got paid for all of it, indicated by the green marks on the cards, so I don’t mind. The structure of the board is almost identical to the one we used for scheduling all our content, but it has some client information still out in the open, thus this’ll have to do instead.
We communicated via Slack, the oh so familiar communications tool of Proakatemia members and most of the teams themselves, allowing us to have efficient work-related discussions when needed, as well as outside of work hours chats about all kinds of interesting topics.
Half of everything that came in through the content writing contracts went directly to pay for the writer who wrote it, 15% to the editor and 10% to the virtual assistant, leaving me with 25% of the revenue and nearly no costs, as I acquired my customers via Upwork and other job boards and freelancer for hire type of sites in the beginning, and later the work started coming in through a couple of select forums and word of mouth.
Might not sound like a huge pay, but imagine a client paying 150$ for an article that takes the writer two hours to write, the editor half an hour to go through and edit to customer specifications, my virtual assistant roughly twenty minutes to schedule, monitor and deliver as per customer instructions, and after the contract began I didn’t have to touch any work relating to said article, just needed to make sure the client felt appreciated and knew that they could always contact me if they needed anything.
The writer made almost 40$ per hour, the editor made a little over 20$ in half an hour and my VA made 15$ in about twenty minutes, although she did have work to do outside the article pipeline as well, such as emails, social media and website updates, meaning her pay wouldn’t be 60$ per hour, but around 20-30$ an hour. And from one article, of which there could have been up to 10 per week from a single client alone, the business itself made over 30$. Scale that up to two full-time writers and have both of them write four articles per day, and you’d end up with 250$ in the company bank account daily. Per week that would have been 1250$ and 5000$ per month, minus the costs so the profit for me was around 4000$ per month, and the beauty of it was that I only worked around two hours per day, having plenty of time to study and enjoy student life.
Coming back to the actual story, there you can see´that the team was well paid, but there’s a reason for that. I could have outsourced far cheaper, non-native English speakers as writers and the least skilled editors and virtual assistants I could find, but that would never have kept the quality at the level which I had set it at by my own writing. I could have also spent more in payments to the outsourced people, but why would I have? The quality was already on a very high level, the customers were happy and the company was making money.
In the end, I wanted the quality to be better than what I could achieve by writing the content myself, and I succeeded in that. We also had fun working as a team, and I felt I could trust each and every one of the people in the team – even though they were outsourced labour. All of the people in the team were working together as a remote team with the help of some modern tools, everyone was well compensated for their efforts and we had a ton of fun.
Returning to the topic of the book itself, the book’s focus was never outsourcing for passive income, but I thought it would make for a more interesting read than growing your existing business with outsourcing, as the same principles apply to both situations.
Why the book would still be worth it to those not familiar with outsourcing
If you haven’t done a lot of, or any for that matter, outsourcing in your life then the book is a good read, but don’t expect anything revolutionary.
Did you notice anything odd about the story?
Through that personal story, I just recited almost every point the book made in far less time, and I also taught a short class on the basics of making a passive income through outsourcing. Pretty clever, if I might say so myself.
The one main point I didn’t touch upon too clearly, was that, according to the authors, “everything you invest in hiring a good outsourcing team will return to you threefold.” I wouldn’t go as far as saying that you make 30$ out of every 10$ invested, but I imagine it’s perfectly within reach if you use outsourcing wisely to expand your business.
Now that the basics are out there, you’ve got all the necessary information, tools and websites to start building your own passive income streams or increasing the capabilities and expanding of your current business venture.
Go get ‘em tiger.