The Easy Way to Scale Your Consulting Business

The other day I had an amazing experience I just have to share with you.

I was working on a project and we needed to collect a lot of data from a couple of websites. Next the data needed to be entered into a spreadsheet so we could have it organized and analyzed. After analyzing the data we needed to send out emails to hundreds of companies to make initial contact with them.

The data collection and entry took about 4 hours.
The emailing of the data took another 3 hours.

That would have been 7 hours out of my day or over a couple of days that I’d have to spend on this work.

By no means do I find this kind of work enjoyable. It’s really a waste of my time. So I didn’t do it…but I still got it done at fraction of the cost of what it would have cost me to do it.

Let me explain…
You’ve probably heard all about outsourcing. It’s been a hot topic for many years. Some people have success with it. Many don’t. Even more don’t understand it or have no idea about how to do it the RIGHT way.

I’ve outsourced work for years. Often it was a complete failure. But I’ve figured it out and I think you should do the same as it allows you to scale your consulting business and make WAY MORE money.

Pick the Right Tasks
Anytime I’ve outsourced a sizeable project on the cheap it’s been a flop. Communication is always the issue and I find that the more details the project has the more important it is to work with quality professionals that can communicate very clearly.

I’ve worked with people in Poland, Russia, the Philippines, India, Pakistan, and other countries. It’s not a specific country that’s the problem. It’s the detail and complexity of the project that requires a high level of communication. And because of that, outsourcing to people that can’t communicate at a superior level can often lead to disaster.

The Easy Way
What I’ve found to work best is to outsource simple tasks. Things that are straightforward. Data collection and entry. Blog posting. Guided research. Transcriptions and so on. These project leave little room for misunderstandings.

What’s great about these is that if you don’t outsource them you’re left to do them. And I know many of you will say, “but yeah, I can just do it and probably even faster.”

Okay, good point. However, let me ask you…even if it takes you 3 hours instead of the 4 hours it might take someone else, how much is your time worth?

Money, Money, Money!
In the example I shared with you above, I paid 60 times less than what I charge for an hour of my time.

Rather than spend those 7 hours doing work that someone else can do for between $3-$10/hr by outsourcing I was able to work on activities that generate me and my company much Much MUCH more than that!

If you ever have a task that you don’t feel like you want to do, or that isn’t worth your time, that’s often a very good candidate for outsourcing.

Stick with straightforward and simple tasks and you’ll see how empowering it feels to get more work done, free up your time and stay focused on the work that really counts the most.

Where to Outsource
There are many companies that offer great marketplaces for outsourcing. Two of the biggest and best are:

Let Us Know
Have you outsourced work for your business? Have questions about outsourcing? We’d love to hear from you in the comments below.

Please Share This Article If You Enjoyed It:

  • I have used elance to outsource with great success. I got both of my projects completed on time and with a significant cost savings. Another great way to outsource is by using a virtual assistant. A VA gets to know your business and over time and requires less instruction.

  • Frank Kamal

    Makes complete sense. Just make sure you are working with quality providers. In this particular case if the data collected is in anyway inaccurate, then the project is doomed. I use outsourcing all the time and it really comes down to knowing how to select and monitor the outsourced work.

  • Outsourcing is also useful when it is necessary to carry out work which you are not very good at and which would pull you away from your real area of expertise.

    • Williams – that’s right. That’s why it’s important to know your value and worth so that you can get others to do work that they can do better than you can.

  • Sentinel Consultants

    Hi Michael,
    Interesting article, very helpful. Thanks.
    I have just started a consulting firm in India. Have around 10 years of experience in corporate finance, credit rating and consulting. Would be happy to discuss any opportunity if anyone has worked to be outsourced to my firm.

    Best regards,
    CA. Ankur Lakhani

  • Sentinel Consultants

    Hi Michael,
    Interesting article, very helpful. Thanks.
    I have just started a consulting firm in India. Have around 10 years of experience in corporate finance, credit rating and consulting. Would be happy to discuss any opportunity if anyone has worked to be outsourced to my firm.

    Best regards,
    CA. Ankur Lakhani

  • Anonymous

    They key point to me is that outsourcing tasks you are able to deliver results for your client at a lower cost. By providing value at a lower cost you are likely to win more work (and more referrals) from your client. I would place less emphasis on what it frees you to do with your time and more on providing better client value.

    Personally, I have had good experience with Crowdspring for Graphic Design work and with GetAFreelancer.com for certain SEO tasks. I think everyone should also understand how to use Amazon’s Mechanical Turk, which is not only a useful tool for outsourcing, but can also be an integral part of a solution for a client.

    • Creating value for clients isn’t an issue of what you charge them, but rather the results and value you deliver in relation to the cost and investment they put into the project. Being able to charge your clients less isn’t a strategy consultants should follow.

      • Perhaps you can explain further as I don’t think I follow your logic.

        I agree with your statement that client value is question of “…the results and value you deliver in relation to the cost and investment..”. It seems a natural consequence of this statement that delivering better results/value, or lowering the client’s cost/investment, alters the relationship you describe. While low cost without good results is clearly of little value, when a consultant can deliver great results at a lower cost doesn’t this improve the client’s ROI?

        In relation to your last statement that “being able to charge your clients less isn’t a strategy consultants should follow.” I am inclined to disagree. Personally I am a believer that you grow a consulting business by putting your client’s interests first. If you can avoid charging a high rate for work that can be performed by more junior personnel (or by outsourcing) then do so and pass on the majority of those benefits to your client. If you don’t, you will eventually be replaced by someone who will.

  • Anonymous

    They key point to me is that outsourcing tasks you are able to deliver results for your client at a lower cost. By providing value at a lower cost you are likely to win more work (and more referrals) from your client. I would place less emphasis on what it frees you to do with your time and more on providing better client value.

    Personally, I have had good experience with Crowdspring for Graphic Design work and with GetAFreelancer.com for certain SEO tasks. I think everyone should also understand how to use Amazon’s Mechanical Turk, which is not only a useful tool for outsourcing, but can also be an integral part of a solution for a client.

  • Ilopata – I’m glad you asked for more information.

    The example is regarding fees and whether consultants should charge less – thereby providing their clients with a better value. Basing your value on charging a lower price is a bad idea. Price often equals perception. If you charge too little you face the danger of being perceived as less valuable.

    So charge what you’re worth and what the project is worth. Once your fee is out of the way, yes, you can and should do what you can to make sure that your client saves as much money as possible, and that any fees they pay for services or products that are part of the project (not your fee) be negotiated or reduced as much as you can.

    Regarding your last concern, that is definitely the case. A consultant shouldn’t charge more when there isn’t a need to. That’s why you need to clearly define your role in the project and that you get paid fairly and well for the time, effort, and value you put in and deliver. If there are add-on services that provide less value but are integral to the project they should be priced in relation to the value they deliver.

    The goal is always to provide clients with as much value as possible and build a trust-based long-lasting relationship. You just need to make sure that you’re not competing on price and trying to win work by going in at the lowest price – that’s a recipe for disaster.

  • Perhaps we are agreeing with one another, but I am not sure. Here are some situations, based on a time and materials arrangement:

    I have a more junior consultant join me on a project and take on some of the work — I charge the client the rate appropriate for the junior consultant even if they are taking work off my plate.

    I have my secretary take on some tasks that I might otherwise have done myself. Most likely the cost of secretarial support is built into my bill rate and I don’t charge the client at all. If I do, I charge a rate appropriate for the secretary, even if they are taking work off my plate.

    I subcontract (or outsource) the work. Again, I charge the client a rate in line with the costs, even if they are taking work off my plate. If they can do the work for $3/hour instead of $180/hr the client benefits.

    In short, allocation of work to the resources with the best match of skills and cost for the task at hand is a standard part of any project. It allows you to be more productive and cost effective.

    Do you agree?

  • It sounds like you’re still using time, not value as the determining factor when deciding how much to charge.

    If you’re charging hourly than you’re correct, you wouldn’t charge $180/hr for a task that you can outsource for $3/hour. But that’s the hourly mindset.

    If you move to a project based fee based on value if your client will get $100,000 in value each year out of the work you provide, you may be able to charge $30,000 for the project (example only) and in that case it can include all the work you outsource.

    While you can only justify a $15,000 fee with the hourly mindset (your rate based on the time you tell the client it will take), with the value and project based approach you can charge more – and it doesn’t matter if you outsource parts for $3, $30, or some for $300.

    The main thing is that your client gets immense value out of the work you provide. If they are making $100k, they’ll be more than happy to pay you 15k or 30k to get the job done – most people would prefer to make the latter.

    • Agreed. I think the only reason we differed is that you were thinking about a fixed price project, where I was thinking about a time and materials engagement.

  • We’ve tried outsourcing some of our data mining, data entry, web research and article writing from both freelancing sites you mentioned and they’re all successful. Personally I find freelancers from the Philippines easier to communicate with. They are very proficient in English and I believe that is one key to have successful project. When both parties are able to understand what is expected from the tasks assigned then the end-product will be achieved.

    One tip to find good freelancers from this site – check out their feedbacks and work experience – more positive feedbacks and more work experience the better. You can really find very smart, hardworking and high quality workers from these sites.

  • Yvonne

    All I can say to Michael is…I have had a billion to learn from this pricing strategy & of course appropriate outsourcing… Now what I need are parameters to determine real value…Thanks for that logical debate. Yvonne Mpanga- Business Consultant- Kampala Uganda

  • Manju

    Hi Michael, I have about two decades of outsourcing experience at both ends of the business and totally agree with you that effective closed loop communication decides between success and failure. I find your articles extremely thought provoking. By the way you seem to give out lots of business secrets.. free!

    So what is actually there in the consulting system? I wonder!

  • Shoyaib S Haq

    Hi Michael.

    I am a Fresher Management student interested in pursuing a career in management/business consulting. I have also considered starting up my own consultancy.

    But of course, initially I will have to cater to the Small and Medium businesses/enterprises.
    I really don’t know where to start from. and how to start exactly. and whether its worth it or not.
    I will be very obliged and would really appreciate any valuable suggestions, advice and guidance. (by the way, I am from India.)

    Thanks and Regards,

  • Shoyaib S Haq

    Hi Michael.

    I am a Fresher Management student interested in pursuing a career in management/business consulting. I have also considered starting up my own consultancy.

    But of course, initially I will have to cater to the Small and Medium businesses/enterprises.
    I really don’t know where to start from. and how to start exactly. and whether its worth it or not.
    I will be very obliged and would really appreciate any valuable suggestions, advice and guidance. (by the way, I am from India.)

    Thanks and Regards,