Outsource your business - active income into passive income
Isn’t that passive income is all about?
Have you developed a somewhat successful business that’s giving you lots of earnings but taking up a great deal of your time? Outsourcing your business might be a great way to turn your active income into passive income.
Let’s take a look at some of the pros, cons, pitfalls and potential that come with seeking to outsource your business to someone else.
You might find that it could be a lucrative way to free up your time to generate other earnings, or just enjoy doing whatever you like while earning money—because isn’t that what passive income is all about?
What is it?With the rise of freelancing and the gig economy, outsourcing has become something very powerful. It’s a way for someone running a business to delegate difficult tasks to someone who’s better equipped to handle them, which can actually improve your business’ success and lead to greater earnings, all while allowing you more free time to focus on what you do best.
Let’s imagine an example. You’ve worked for the last few years to develop an eCommerce business selling rubber ducks. You handle the entirety of the business— shipping, customer service, marketing, finances, and everything in-between. You’d love to have time to research future opportunities, or just more time to relax and enjoy your life, but the day-to-day operations of your business keep you slammed.
You can outsource some of your business’ simple but time-consuming tasks to freelancers, freeing up your time without breaking the bank. The internet is filled with services like Upwork and Freelancer where you can find skilled, experienced support in a wide range of tasks for incredibly low prices.
Who is it for?If you’ve developed a successful business, but it’s eating up all of your time on a regular basis, outsourcing is for you. It’s a powerful way to make some of your active, exhausting income into a more passive way to support your lifestyle.
Something to keep in mind is that transferring some of your workload to third-parties may not be without its bumps in the road. But you can mitigate much of those problems by doing your research before hiring, and paying a fair wage that will make truly skilled and dependable workers want to take on your work.
How does it pay?Let’s look at it in more concrete terms. This concept comes from the 4 hour work week by Tim Ferriss.
Let’s say your business is earning you $5,000 a month, and you’re working an average of 30 hours a week to maintain it. By dividing your earnings by the hours you work, your time is worth about $40/hour. If you can outsource something for $15/hour, you’re still at a profit of $25/hour for your time and now you have someone doing work for you.
Obviously outsourcing doesn’t directly increase your earnings. But the way we see it, if you’ve created a business successful enough to justify outsourcing some of its work, just imagine what you could achieve with more time to be creative during the workday.
From that perspective, there’s no ceiling to how much financial benefit outsourcing can bring you in the long-term.
- More time for you to focus on the future or just relax
- Freelancers focused on specific tasks can be more effective than you trying to multitask and handle everything at once
- The rise of freelancing and the gig economy give you plenty of options
- Many tasks can be completed for relatively cheap
- Good and qualified freelancers cost money
- It can take time to train people and find the right fit for your business
- You will likely experience some bad freelancers or poorly completed work along the way
How to Get StartedList all of your business tasks and pick which ones might be good for outsourcing. Usually it’s the most time consuming or very repetitive tasks. Once that’s done upload a job you need outsourced on Freelancer or Fiverr.
These are a great place to start—but keep in mind, Fiverr freelancers offer fast, cheap work. Don’t expect a world-class job to cost only $5, you get what you pay for. On Upwork and Fiverr, you can set your budget and allow freelancers to place bids and make their case for why you should hire them.