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How to save money by outsourcing online

Updated on October 13, 2011

It isn't easy for a small business to balance it's need to get work done and it's cost constraints. Outsourcing is a cheap and easy way to grow your business faster. There are however some pitfalls and tricks you need to know about. Once you get into the habit of outsourcing work correctly, it can be very rewarding.

In how to save money by outsourcing online I am going to look at a specific type of job (writing) and a specific hiring platform (Freelancer.com), but the principles and methods for getting the most, from the money you spend, are universal. The online outsourcing sites let you post projects and then contractors bid on your projects. You then award the job to one of the contractors, based on their bid.

Certain jobs lend themselves well to outsourcing, let's look at some examples:

  • Scripting and Coding: An example of scripting would be if you get some to use PHP to add an user feedback form, to your website. Coding is when you commission a software program.
  • Writing: There are many kinds of writing assignments that get outsourced for instance: articles, blog posts, reviews, eBooks and Copywriting.
  • Design and Development: Examples are: Logos, animation, Flash movies, web sites, blogs and web movies.
  • Sales and Marketing: This generally involves ways to attract traffic to a web page.

Problems I had with outsourcing, in the begining

There is a learning curve with auctioning jobs online, this part of the article is less about the technical side and more about adjusting how you do business.

  • Letting go of control: When I use to create web content, I would do it all myself and I would insure a very high level of quality in everything I did. More than that, it was all done "my way". I currently use 2 types of content: articles that go on my sites and articles that are posted on article directories. The ones for article directories direct traffic to my sites and helps my pages rank better, with the search engines. While the content for my web sites need to be of high quality, the content for article directories doesn't need to be perfect.

    Accepting that everything isn't done the way I would do it and that quantity is sometimes more important than quality was a difficult step for me.
  • Assuming risk: When you outsource work there is always a chance that you won't make the money back. You have to shake that off and take the risk. Once you have a formula that you know works, that does reduce your exposure.
  • Making business decisions without emotion: If, someone places a bid on one of my projects, they show me a sample of their work and I award them the project. Then I will expect the quality they showed me, in the time they promised to deliver. I will not pay until they have completed the work. If they fail to deliver I will close the project and assign the work to someone who does what they promise to do.

    In the beginning I had more of a working together type attitude, but if you let contractors push you around then they will push you around. Demanding your rights leads to a better outcome for both of you.

Submitting your first project for bids

I have used a few outsourcing sites that let contractors bid on projects that you post. I finally settled on Freelancer.com because they delivered the best value for my money.

The site allows you to post a free trail project the first time you use it. Experienced contractors won't bid on trial projects, so I suggest you don't use that.

The site charges 3% or $3 per project, depending on which is the highest.

The first step is to transfer about 10% of the first projects value into your account using Paypal.

Above you can see a screen shot of the projects posted under "Articles". You can see one project is market as "trial", which I recommended you don't use.

If you look at the right column you will see the categories under which the projects are posted. By listing the project under more than one category you insure that it will be seen by more contractors.

The one row is highlighted because I am holding my mouse over it. When you do this you can see the project title and description.

The idea with the title and description is to give enough information for the contractor to be able to place an informed bid. After the project is awarded you go into the finer details.

An example of a good project title would be: "10 x 500 word articles needed; paying $3.5 per article".

Below is what one of my project descriptions looks like:

- Your work must be completely without errors, in perfect English (Grammar, Spelling and Punctuation must be correct).

{ If their work isn't good enough, I can send it back and point out this part of the description }

- Your work will be tested by our duplicate content detection software and Copyscape.

{ Copyscape is a free web application, it tests to see if they tried to copy and paste content from other websites into the article. }

- I will gain complete ownership of your work and you cannot re-use or reproduce it in any way.

{ It's legalize but you need to say it. }

- Please provide a sample of your work.

{ I always ask for a sample, to check whether they really are able to do the work. }

Project bids
Project bids

As you can see, in the picture above, each contractor has a flag indicating their nationality. Generally people from Canada, the USA and the UK have the best English grammar. Contractors from the Philippines normally have OK English, while those from India have really bad grammar. There are exceptions, but this is what I have found to be the case for most of them. The English some Indians use is so bad that it's hard to understand them. You might want to message them a few times, to check if they understand you before you award a project to them.

If you look at the top bid where it says 50% ($23). This means he wants you to place 50% of the fee in escrow, before he will start work on the project. If there is a dispute over the work, there is a process to determine whether the contractor is entitled to the funds in escrow. The dispute process is a real pain, as a rule I will ask to see some work before I make an escrow transfer.

The column to the right of that indicates how long the project will take and the one to the left is the contractor's bid for the work.

If you haven't heard from the contractor in a while send them a reminder of the deadline. They may be doing more than one project at the same time and if you keep them to their deadline, they will finish your project first.

There is both effort and cost involved in outsourcing your projects, but it has allowed me to scale my online business up significantly and with that my income. I hope you have found how to make money by outsourcing online useful.

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