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Understanding the Value of Outsourcing in the Freelance Economy

The rise of the gig economy has been gradual, yet undeniable. In 2010, just 10.1 percent of the U.S. workforce reported having a secondary gig or side hustle. In 2016, an estimated 24 percent of Americans reported earning some side money from a digital platform. As platforms like, Etsy, Fiverr, Upwork, and TaskRabbit continue to scale, the expectation is that millions more will enter the fray.

For individuals, the gig economy promises additional revenue streams that are flexible and convenient. For business owners, it provides an opportunity to scale with greater efficiency, lower costs, and access to expertise.

The Benefits of Outsourcing

Outsourcing isn’t a byproduct of the gig economy, but it’s certainly become more practical as a result of the surge of freelancers and independent contractors offering up their services on digital platforms. Here are some of the distinct benefits that business owners have come to enjoy as a result of strategic outsourcing:

  • Cost savings. As any small business owner knows, it takes more than a salary to hire an employee. You also have to account for recruitment costs, benefits, payroll taxes, office space, equipment, etc. When you outsource to a contractor, you don’t have to worry about any of this stuff. You simply pay for the services rendered. This can result in significant cost savings.
  • Handling tasks internally requires man-hours. For businesses run by one or two individuals, this means taking man-hours away from doing other important tasks. Outsourcing saves time and promotes optimal efficiency.
  • Sometimes you simply don’t have the in-house expertise to handle a task or perform it as efficiently as you should. Outsourcing allows you to choose people who already possess the skill, rather than trying to hire or train your way to proficiency.
  • Need to scale with speed and efficiency? Outsourcing lets you grow in a responsible manner that doesn’t put your company’s financial health at risk.
  • Internal development. There’s something about working alongside an expert – even if it’s just in an observation role – that helps you add new skills and become more proficient in areas where you were previously lacking.

When you layer each of these benefits on top of one another, it’s easy to see why so many small business owners are turning to the gig economy and utilizing freelancers as valuable extensions of their organizations. And if you believe the numbers, the freelance economy is forecasted to grow substantially over the next 24 months.

When to Outsource a Task

Outsourcing is valuable, but it’s clearly not a solution for every task, role, and responsibility. For today’s small businesses owners, the key is determining when to outsource in order to maximize the aforementioned benefits. Here are some suggestions:

  1. Outsource When It’s Technical

There are tasks that almost anyone can handle. And then there are tasks that require some technical expertise. When you don’t have the technical expertise in-house, you should outsource.

In today’s digital marketplace, link building is the perfect example. Most small businesses don’t have the technical know-how to perform quality link building on their own. As a result, it makes more sense to outsource to a company like, which provides fast and efficient services.

  1. Outsource When Time is Better Spent Elsewhere

Sometimes you have the knowledge and resources to handle a task, but it’s simply not worth handling. If you can spend the time better elsewhere, go ahead and outsource the task. The business will be better for it. (You’ll also offload much of the stress associated with overfilling your schedule.)

  1. Outsource When It’s a Non-Core Task

There are certain tasks that are integral to the success of a company. This includes things like product innovation and sales. There are other tasks that aren’t necessarily “core” tasks. Things like customer service, web design, and accounting would fall into this category. Non-core tasks can be outsourced with minimal friction.

  1. Outsource When It Allows You to Say “Yes”

When a small business is trying to grow, turning down clients is a cardinal sin. If you find yourself in a situation where you can’t take on a client because of time restrictions, limited resources, or lack of necessary skills, don’t turn the client away. Accept the job and outsource the work to trusted freelancers. This allows you to grow your business without actually having to do all of the work internally.

Practical Considerations for Effective Outsourcing

For small business owners, the challenge is no longer finding an outsourced partner. The biggest sticking point is finding the right partner and managing the relationship in a manner that’s cost-effective, efficient, and high returning.

As you outsource, you have to do your due diligence. Tap into your personal/professional networks to find skilled individuals whom others respect and know to be trustworthy. It’s also a good idea to never pay in pull before the services are rendered. A deposit on services may be mutually agreed upon, but paying in full on the front end limits your leverage.

As a general rule of thumb, you shouldn’t try to find the cheapest person for the job. With so much competition, you can find someone willing to do a task at almost any price point. But rather than pay the least amount possible – which generally indicates lower quality work – pay what the job is worth. You may even add 10 percent to your budget to get someone exceptionally talented. In the end, it’s almost always worth the added cost.