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I am about to do something I never thought I’d do:
Admit that law school was helpful.
Don’t get excited – it’s a relatively minor thing. Here it is …
It was in law school that I learned about the concept of a “needs” contract.
What the What, Now?
Yeah, so, a “needs” contract is simply an agreement whereby one person (or business) provides all the widgets some other person (or business) needs to fulfill some purpose.
(Sidenote: it’s so funny thinking about the trite law school contracts examples that we were routinely given which mentioned “widgets” – it used to be a word that represented any kind of goods. Now, of course, they’re the little boxes of code on your website. I digress …)
So, if I’m an orange juice maker, I obviously need a steady supply of oranges. (Unless I’m one of those evil chemical-lovin’ manufacturers.)
But how do I know with any precision how many oranges I’m gonna need? Maybe the orange juice market will boom this summer, when Kim Kardashian gushes about how much good OJ does for her skin and hair. Maybe the orange juice market will bust this summer, when Kim Kardashian gushes about …. well, you get the picture.
Point is: I can’t tell you, Ms. Orange Grove Impresario, how many oranges my business will need at each and every delivery, so we can’t put that in the contract. But if we don’t specify the number of oranges you’re contractually obligated to deliver to me, we’re just headed for a lawsuit here, and ultimate business ruin!
Oh noes! What can we do?
Fear not, brave entrepreneur, for we can take advantage of the needs contract! Our awesome lawyer simply whips up a standard goods-for-cash contract, in which you’re obligated to provide, and I’m obligated to pay you for, all the oranges I need.
Spot the Problem Yet?
There’s a potential hitch in this giddy-up, though.
Specifically, how can the orange grower protect herself from the wild fluctuations of the OJ maker’s needs?
One month, you’re shipping out tons of the delicious juicy fruits, and the next you’re down to nothing … how can you possibly plan your biz finances and cash flow projections?
Yep. That’s a problem, all right. That’s why the “needs” contract is a bit riskier than a contract that spells out specific numbers or quantities and deserves some additional thought before consent is given.
(I promise, that right there? Is the end of the law school crap.)
OK, you’re thinking, but what in the name of Donald Sutherland does this have to do with marketing my business productively?
Excellent question. Read on, mon frere …
Why Outsourcing Your Needs Is Smart Business
So, this past month has been cah-razy for me. Business? She’s a-booming. Not so much a problem, this, but there’s also been a growing, nagging realization picking at the outer edges of my consciousness. Finally it came into sharp relief a few weeks ago.
The issue was that all my clients wanted graphics to go with several of my Stage Presence Marketing services. That’s not a problem — I can do graphics.
The problem: I don’t wanna do graphics.
The problem: I’m not that good at them. I mean, they’re serviceable and all — I did my header at the SPM site, as well as the cover image and app images at the SPM Facebook page, and I’ve gotten several compliments on them.
But it doesn’t come naturally to me, the way writing, tech work, and productivity coaching do.
And it takes me a lot of time to get these graphics done.
That’s time I could be spending marketing, or getting client work done, or writing more content for this site (yeah, yeah, I hear ya, Someone) or SPM’s various channels.
Soooo … what’s the productivity-lovin’ pajama queen of the couch warriors to do?
She is to outsource those graphics needs to someone who does ’em well, loves to do ’em, does ’em fast …
Enter evan austin.
evan was already doing some of my graphics work for clients. Matter of fact, he was always my first call when I was just swamped or when a graphics need exceeded my meager skills.
Formalizing the whole agreement, and making it a part of my business systems (that’s the real key here) was the logical next step.
Outsourcing As a Small Biz System & Service Enhancer
See, here’s the thing: my clients need graphics.
And I, as the logical service provider, have a choice:
- Either I get better at graphics and do it myself …
- Or I get someone else who’s already better at graphics to do it instead.
Really, that’s it – those are my options. (I guess I could leave my clients hanging, but that’s not the better biz solution. I’m missing out on a viable income source and I’m not serving those clients’ needs very well.)
The solution for me was easy. I have neither the time nor the desire to become a graphics guru. So if I want to provide this logical accompanying service to my clients with a need for it, then it’s gotta come from someone else. And there, too, I have only two options:
- Either I hire someone to do it for me in-house (albeit in the digital, virtual sense) …
- Or I outsource this to someone who already does it under his/her own brand identity.
And once I articulated the choice for myself in those terms, the solution jumped off the page at me: evan.
Outsourcing for a well-defined, specific need is a smart way to build a small biz system that enhances both your market position and your productivity. It helps you gain more clients in your niche, because you broaden your offerings to become the “one-stop shop” for a particular client type. And obviously it helps you become a more productive business owner, because it takes all the tasks associated with providing that service off your plate — and ideally puts it on the plate of someone who’s a lot faster at it than you are.
That serves everybody:
- You get the benefit of the added service and the additional clients it entices, as well as buying back the time you’d have otherwise spent on it.
- Your source gets the benefit of additional work and income, plus the exposure to a completely different subsection of the market.
- And most importantly, the client wins big-time, through the added value and quicker turnaround.
Minding the Outsourcing Details
Now, I promised to leave the law school crap way back up there. But there are some tricky aspects to establishing an outsourcing agreement, and I wouldn’t be doing my job if I didn’t at least mention them.
The first thing to do is identify the services/goods being provided. “Graphics” (as in my example) isn’t sufficient. So I asked evan to work up a list of specific kinds of graphics he’d be willing to provide.
From evan’s perspective, he also needed to do some serious thought on this point. Maybe he likes doing headers but logos, not so much. Pinpointing what each side needs and is willing to provide is key.
Next, we needed to establish our pricing structure for the provided services. We elected to go on a cost basis. In other words, whatever evan charged me, that’s what I’d charge the client. I don’t make a profit on his effort.
I think that’s the fair way to play it, but there may be situations in which it only makes sense to mark up outsourced goods or services. Just think very carefully about this point, as it can have unintended consequences down the line.
Another potential trap for the unwary is how you will each market the association — if you choose to market it at all. evan and I are still working out the details on this point, and there are a lot of options to choose from.
Personally, I’m a fan of making it a selling point — I’m leaning towards this solution in my agreement with evan. It has the advantage of being the transparent choice, and it clearly communicates the value to the client. But you could also elect to simply describe the services/goods as just “one more thing we do for you.”
And of course, you’re going to want to spell out the particulars, such as …
- turnaround times
- work formats
- how work will be delivered
- who deals with the client
- when payment is due
- how invoicing will be handled
- what happens when prices are adjusted
Bottom Line: Outsourcing Needs Is a Win-Win-Win
Mind the details, and pick the right partner, and outsourcing can be the best gift you can give to yourself, your business, and your clients.
For more spectacular perspectives on outsourcing, take a look at the Word Carnival page for this month’s “Outsourcing” topic, which has links to ALL our participating Carnie blogs!