Outsourcing and Virtual Assistants - Small Business Saviors

By Wendy Maynard

Work smarter, not harder

What is one of the best ways to work smarter without working harder? The answer is outsourcing. Whether you need occasional or ongoing assistance, outsourcing can save you money and time. Graphic designers, copywriters, bookkeepers, website programmers, office assistants, and other types of professionals are all readily available.

And, there's a new way of hiring people - the World Wide Web connects independent professionals and small businesses that don't need or want full-time help. Try typing "Virtual Assistant" into a search engine. You will find a vast array of online resources. According to the International Virtual Assistants Association,

"A Virtual Assistant (VA) is an independent entrepreneur providing administrative, creative, and/or technical services. Utilizing advanced technological modes of communication and data delivery, a professional VA assists clients in his/her area of expertise from his/her own office on a contractual basis."
This means you can find a virtual assistant for almost any type of work. Are you a plumber who needs accounting? Or a professional speaker who needs help arranging your appointments? Perhaps you would like some help writing proposals, designing a new website, or sending out press releases. You can find someone online for all of these services.

For many "around the office" types of jobs, virtual assistants get paid $20 to $50 an hour. More specialized services such as programming, legal assistance, graphic design, or coaching can cost $75 to $125 an hour. This may sound expensive at first. However, if you are not in need of a person in your office 40 hours every week, it becomes a very cost-effective solution.

While I realize, costs fluctuate widely, let's look at some sample numbers to compare the typical costs of maintaining an employee versus outsourcing:

Sample costs of a full-time employee

Employee Salary: $36,000/ $17.31/hr.
- Two-week paid vacation: $1,385 to cover your employee's role (more if a temp is hired)
- Health Insurance (employer portion for 12 mos.@$150): $1,800
- FICA Taxes (7.65%): $2,754
- Worker's Comp. (.61%): $220
- Unemployment (State & Fed): $309
- Misc. costs (Vision, Dental, Disability & 401K Matching, Profit Sharing & Stock Options): >$3,000
- Office Space, Equipment, and Software (100 sq. Ft. @ applicable rate): $2500 ($25/sq. ft. is conservative)
- Annual Bonus (1 mo. salary): $3000
- Sick Time (10 days/year): $1385
- Other intangible costs (furniture, testing, training & fees, sick children, etc.): $1200

Total Typical Costs: $53,553/ $25.75/hr. total effective hourly rate at 100% productivity

At a 75% productivity level, this employee's cost for actual work becomes $34.33/hour and at a 50% productivity level, it's $51.50/hour. A full-time staff person is very unlikely to be 100% productive because of idle time, errands, tasks, personal matters, and a learning curve for certain functions. This is combined with an employer's inability to generate work due to distractions, staff meetings, company functions, lack of time to delegate or supervise, and sales fluctuations.

So, depending on the productivity level of a full-time employee, you may be paying up to 3 times his or her actual salary! You do the math! What's the wise choice? Does an in-house employee save money? In most small businesses, this method simply is not the most cost effective.

Entrepreneur, get your life back!

Outsourcing will save you money, time, and energy. Virtual assistants and other out-of-office professionals own their own equipment with the latest software, they pay their own taxes and benefits, they are experts in their field, they don't require morale building or training, and they aren't going to bring their personal problems into your work space. Virtual assistants and outsourced professionals offer even more advantages: they are loyal to their client companies and will support your goals - they will help you generate ideas and allow you more time to make your business more profitable.

So, if you have employees that you are happy with, then of course that's perfect for your business. Don't fix what ain't broke. However, if you find you are paying too much overhead or spending too much time managing, try a virtual assistant. If you need a new type of service, but don't have the in-house expertise, outsourcing is a great option. There's a world of online help available at your fingertips.

Wendy Maynard is a founding partner at Kinesis, Inc. - a marketing and design firm based in Portland Oregon. We specialize in logos, web site design, branding, graphic design, SEO, marketing, and social media. Our clients benefit from out experience at creating marketing materials that help them increase their business revenues.