To Outsource or Not to Outsource?

[App88]

For aspiring entrepreneurs with a little start up capital like myself there is only one way to get started - learn, take actions and pivot but I've always wondered what approach do entrepreneurs with little more capital take?

I would like some opinions based on personal experiences or knowledge on the hypothetical situation below:

So, you've got $100k - $200k in liquid capital burning a hole in your pocket, and you're eager to dive into the world of direct-to-consumer (D2C) e-commerce or any startup.

Now, the question arises: should you outsource everything from branding, web design, and marketing, or should you keep things in-house and become an expert at least in some skill sets?

I understand even if you outsource everything you need to have a basic understanding to effectively manage your vendors. The question is, if you have a larger capital what would your approach be to start a brand from ground up? Would you spend money instead of learning a skill?
How would you strike a balance?

 

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[DoTheWork]

I'd consider outsourcing the things that:

• Drain your energy
• You're not good at it
• Are cheaper to outsource than the other tasks that you can be spending your time instead

 

[MTF]

I would NOT spend 100-200k on your first business because it will most likely fail.

Better set aside most of it and bootstrap.

 

[heavy_industry]

Would you spend money instead of learning a skill?

You need to have at least a basic understanding of everything that's going on in your business, otherwise:

• You will not know who to hire and why.
• You will get scammed by your overpriced employees.
• You will fail to manage the system effectively if you don't have the first clue of what's going on "on the ground"

The good news is that you can learn the basics of any skill in less than 50 hours.

I might be wrong in this assumption, but I believe that the best managers have at one point been janitors in their business. You cannot outsmart someone who has hands-on experience.

---

And to answer the question in the title:

No outsource = no real business. You're just creating a job for yourself.

You can only work for about 10 hours a day, give or take.

But if you hire 10 people, you're now working 100 hours in 24 hours. Magic!

 

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[amp0193]

The question is, if you have a larger capital what would your approach be to start a brand from ground up? Would you spend money instead of learning a skill?
How would you strike a balance?

$100-200k is not a lot for Ecom and is basically a container or 2 of inventory plus a year’s salary for yourself (if you’re jumping in full time).

Do everything yourself and run the business as if you had $0. Hire when you have sales.

 

[App88]

$100-200k is not a lot for Ecom and is basically a container or 2 of inventory plus a year’s salary for yourself (if you’re jumping in full time).

Do everything yourself and run the business as if you had $0. Hire when you have sales.

True. It's definitely wise to spend after you have sales depending how the sales are.
However, that primarily applies to customer service and to an extent cost of goods.
Essentials prior to launch such as branding, packaging, web design and initial marketing does require some capital.

 

[Johnny boy]

Forget the money.

That’s the benefit of having it, you don’t have to worry about it.

Focus on the system. A business is made up of logical premises that support why it’s a good business. You have to prove the basics and figure them out and then you go from there.

Run the numbers, make benchmarks, and go about proving each premise as quickly as possible.

1. Can the workers do the work?
2. Can you get the customers for an acceptable CAC?
3. Can you hit a target gross profit margin?
Etc.

This isn’t done with money it’s done with action and giving your attention to the business.

Then, as you build, you can grow it a bit quicker. If you can get customers, have the employees work, and everything’s nice, but you want to ramp up ads and make more money, go ahead and throw a chuck of your savings at that, only when you have proven a few key premises true first to support why this is a good business.

As far as getting started, everyone seems to find a way to allocate each dollar even when they don’t need to.

You should buy a domain and get a quick Wordpress site up this afternoon, get a Google business listing if relevant, get a free crm, and start doing business. Whatever you need it probably isn’t much.

Nowadays if I want to start something up I can make something look like a pro company with a website, online presence, business phone line and a pro IVR menu, hooked up to a 24/7 answering service with scripts and booking software. All within a day. Emails are all “____@companydomain.com”, and all that stuff. I have Facebook ads people to manage accounts. If I want someone to film an ad video I have a guy who does UGC videos. Anything else you can get some person on fiverr to whip it up in a day. If I need a program I’m friends with a tech startup guy who went to Oxford and can whip me up some python script.

It’s all about speed. Always be fast. Get your shit to market quick, get feedback quick, make money quick. Money loves speed.

 

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[Bounce Back]

Forget the money.

That’s the benefit of having it, you don’t have to worry about it.

Focus on the system. A business is made up of logical premises that support why it’s a good business. You have to prove the basics and figure them out and then you go from there.

Run the numbers, make benchmarks, and go about proving each premise as quickly as possible.

1. Can the workers do the work?
2. Can you get the customers for an acceptable CAC?
3. Can you hit a target gross profit margin?
Etc.

This isn’t done with money it’s done with action and giving your attention to the business.

Then, as you build, you can grow it a bit quicker. If you can get customers, have the employees work, and everything’s nice, but you want to ramp up ads and make more money, go ahead and throw a chuck of your savings at that, only when you have proven a few key premises true first to support why this is a good business.

As far as getting started, everyone seems to find a way to allocate each dollar even when they don’t need to.

You should buy a domain and get a quick Wordpress site up this afternoon, get a Google business listing if relevant, get a free crm, and start doing business. Whatever you need it probably isn’t much.

Nowadays if I want to start something up I can make something look like a pro company with a website, online presence, business phone line and a pro IVR menu, hooked up to a 24/7 answering service with scripts and booking software. All within a day. Emails are all “____@companydomain.com”, and all that stuff. I have Facebook ads people to manage accounts. If I want someone to film an ad video I have a guy who does UGC videos. Anything else you can get some person on fiverr to whip it up in a day. If I need a program I’m friends with a tech startup guy who went to Oxford and can whip me up some python script.

It’s all about speed. Always be fast. Get your shit to market quick, get feedback quick, make money quick. Money loves speed.

Johnny I'm not the OP but thanks for being so consistent with this message man. I need it. I keep going down technical rabbit holes just launching my own SAAS and need these kicks in the butt.

 

[NervesOfSteel]

For aspiring entrepreneurs with a little start up capital like myself there is only one way to get started - learn, take actions and pivot but I've always wondered what approach do entrepreneurs with little more capital take?

I would like some opinions based on personal experiences or knowledge on the hypothetical situation below:

So, you've got $100k - $200k in liquid capital burning a hole in your pocket, and you're eager to dive into the world of direct-to-consumer (D2C) e-commerce or any startup.

Now, the question arises: should you outsource everything from branding, web design, and marketing, or should you keep things in-house and become an expert at least in some skill sets?

I understand even if you outsource everything you need to have a basic understanding to effectively manage your vendors. The question is, if you have a larger capital what would your approach be to start a brand from ground up? Would you spend money instead of learning a skill?
How would you strike a balance?

I would at first, market-test the product. The market's response to your product will be the deciding factor.

I would like some opinions based on personal experiences

Sales are everything!

 

[NervesOfSteel]

Forget the money.

That’s the benefit of having it, you don’t have to worry about it.

Focus on the system. A business is made up of logical premises that support why it’s a good business. You have to prove the basics and figure them out and then you go from there.

Run the numbers, make benchmarks, and go about proving each premise as quickly as possible.

1. Can the workers do the work?
2. Can you get the customers for an acceptable CAC?
3. Can you hit a target gross profit margin?
Etc.

This isn’t done with money it’s done with action and giving your attention to the business.

Then, as you build, you can grow it a bit quicker. If you can get customers, have the employees work, and everything’s nice, but you want to ramp up ads and make more money, go ahead and throw a chuck of your savings at that, only when you have proven a few key premises true first to support why this is a good business.

As far as getting started, everyone seems to find a way to allocate each dollar even when they don’t need to.

You should buy a domain and get a quick Wordpress site up this afternoon, get a Google business listing if relevant, get a free crm, and start doing business. Whatever you need it probably isn’t much.

Nowadays if I want to start something up I can make something look like a pro company with a website, online presence, business phone line and a pro IVR menu, hooked up to a 24/7 answering service with scripts and booking software. All within a day. Emails are all “____@companydomain.com”, and all that stuff. I have Facebook ads people to manage accounts. If I want someone to film an ad video I have a guy who does UGC videos. Anything else you can get some person on fiverr to whip it up in a day. If I need a program I’m friends with a tech startup guy who went to Oxford and can whip me up some python script.

It’s all about speed. Always be fast. Get your shit to market quick, get feedback quick, make money quick. Money loves speed.

You literally gave OP a manual to start and run a business. LOL.

He was just here asking opinions on the "Hypothetical" situation and you left him with no excuse to post another "hypothetical situation" thread!

You actually gave him Gold, if he understands the value of it!

 

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[App88]

Forget the money.

That’s the benefit of having it, you don’t have to worry about it.

Focus on the system. A business is made up of logical premises that support why it’s a good business. You have to prove the basics and figure them out and then you go from there.

Run the numbers, make benchmarks, and go about proving each premise as quickly as possible.

1. Can the workers do the work?
2. Can you get the customers for an acceptable CAC?
3. Can you hit a target gross profit margin?
Etc.

This isn’t done with money it’s done with action and giving your attention to the business.

Then, as you build, you can grow it a bit quicker. If you can get customers, have the employees work, and everything’s nice, but you want to ramp up ads and make more money, go ahead and throw a chuck of your savings at that, only when you have proven a few key premises true first to support why this is a good business.

As far as getting started, everyone seems to find a way to allocate each dollar even when they don’t need to.

You should buy a domain and get a quick Wordpress site up this afternoon, get a Google business listing if relevant, get a free crm, and start doing business. Whatever you need it probably isn’t much.

Nowadays if I want to start something up I can make something look like a pro company with a website, online presence, business phone line and a pro IVR menu, hooked up to a 24/7 answering service with scripts and booking software. All within a day. Emails are all “____@companydomain.com”, and all that stuff. I have Facebook ads people to manage accounts. If I want someone to film an ad video I have a guy who does UGC videos. Anything else you can get some person on fiverr to whip it up in a day. If I need a program I’m friends with a tech startup guy who went to Oxford and can whip me up some python script.

It’s all about speed. Always be fast. Get your shit to market quick, get feedback quick, make money quick. Money loves speed.

Thank you Johnny!