Does one-person business can generate profits equal to big corporation offering the same products or services? Of course. I’m going this direction with my own business and skillful task put outside give greater stability to the company’s development and almost unlimited scalability.
What’s the difference between outsourcing and hiring people? Likewise we entrust selected responsibilities in the hands of strangers. Between the employee and the contractor the difference is only in the form of a contract. We employ the employee on a contract of employment, which is imposed on us by various forms of restrictions and don’ts. We are slaves of the law and we can not establish a convenient forms of cooperation, we remain the only civil law contracts.
Outsourcing generates seemingly large costs, which can create the appearance that the employee’s employment will be less expensive. I want to refute this thesis on a simple example:
Assume that the check profitability in the period of 6 months of advertising service on Facebook.
We employ an employee for 3000 PLN net. The cost of its job, together with taxes and contributions is approx. 5077 PLN. Counting the cost of maintaining the office for one employee (cleaning, electricity, water, computer, maintenance, etc.) we add about 300 PLN per month + cost of accounting services (personnel, payments) is an additional 100 zł. In total, this gives us 5477 PLN per month. It does not include the costs of implementation of an employee, because of its efficiency will become the expected momentum after 2-3 months.
For this amount, ie. almost 5.5k PLN net you can rent one of the best interactive agencies in Poland with a performance guarantee of work and the possibility of withdrawing payments when the founding agreement will not be made, what makes us virtually assured of proper work. No training, implementation, health and safety regulations, the Human Resources department, water supply, heating and coffee etc.
With outsourcing we buy a lack of accountability. We do not need to care about it. We have established targets, we paid, we are waiting for results. The end. In the case of employment an employee we must constantly supervise his work, enforcement of lost money due to incompetence of the employee is under Polish law extremely inconvenient (but not impossible).
Employee performance is unstable, dependent on a multitude of factors. We are human beings, we have the right to make mistakes, have a bad day. When you oursourced your task – it makes no difference for you. You pay for results, not for the commitment. We are not interested in humor counterparty or its mode of operation and internal culture of the company. We expect results.
In this matter, the employee has the opportunity to win the battle. Employee is right there, we can toss him other task in the meantime, motivate him to do better, give him a reason for higher performance and get better and faster results.
There is only one but – it is not possible to calculate or predict. Man is variable. When outsourcing – or get a particular effect or nothing to pay for. In the case of an employee – or get faster this effect, or anyway we pay for it. Notwithstanding effect.
Hiring is expensive and time consuming. Finding partners may be, don’t have to. When we need to increase the scale of the business, we flip the creation of this scale on a contractor to create an annex to the contract giving it new parameters for performance, and he will have to hire additional people to the increased workload.
Using the resources of partner we are sure about staff qualifications, and if not – it costs us nothing. Employing workers directly, we take full responsibility for how they work and whether they show up with the necessary skills. In resume people can type anything, but the agreement with the contractor does not provide such opportunities, because its fracture does not generate costs for us. A worker costs always, even when it is bad.
A verbal contract isn’t worth the paper it’s written on.
~ Samuel Goldwyn
Long story short
Let’s create a stable businesses, let us at controlled improvisation. Explore the market with a lifebelt. Outsourcing gives us such possibility. It is time to run away from the traditional model of the company, which tells us to trust people. Building a business based on the competence of the people is so unstable that it is not even worth trying. Feel free to use the companies and institutions that specialize in exactly what you need and we can get a perfect product, often above our expectations.