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Have you ever thought about running a business without having to worry about having an actual office? In this Internet age, hiring a workforce is now possible – you just need an internet connection and a computer. Nate is one who enjoys outsourcing and being in the industry for several years with a team from the Philippines. In today’s podcast, he shares some of the advantages and disadvantages of it based on his experiences.
Alright, today we’re talking about outsourcing. We’re talking about advantages and disadvantages. Because there is both. Are both or is both? because there are both? There are both got to make sure your verbs agree. Coming up. Hey everybody, we’re talking about the advantages and or disadvantages… Actually, we’re talking about “and?” Yes “and.” There’s both? Advantages and disadvantages of outsourcing your work. Specifically for YouTube. And we are not going to talk about outsourcing, like you know, making shoes. Yeah, we’re talking about outsourcing for small businesses. Oh, so we are… So, we even Solopreneurs. Oh really? Yeah. Oh, good. Well, this would anyone could watch this. Not just YouTube people. Oh yeah. Because I’m a big fan of outsourcing. Yeah, obviously. Let’s talk about the advantages first. Okay, sounds good. Then I’ll share some experiences I’ve had, bad experiences. So, the good news and then the bad news. Yeah. And then we’ll sum up with the good finishes. The positives and then the negatives. And then a positive. And then finish with the positive. Okay. So, here’s the huge one, you outsource because of the cost. That is huge. I outsource to the Philippines. We’re going to make another video on “Why the Philippines, compared to like China or India or anywhere?” But in the Philippines, cost of living is so low there that you can hire a really skilled highly educated trustworthy person for 400 bucks a month full-time. It’s amazing. And it’s like a dream job for them. Yeah. A great opportunity. So, I’ve got a whole team of people in the Philippines and if I think about hiring somebody new and the skill sets that I need, if I then think about I’d have to hire… What it would happen… What it would take to hire somebody here, locally to me? And just like, that much money? I’d have to pay that, you know? Whether it’s 4 grand, 5 grand, 6 grand a month to find somebody of that skill set. Right. And to think that I can get the same caliber of person for 4 or 5 or 6 hundred dollars per month. That’s amazing.
So, yeah. Just think what you could do. There’s a lot of… Because I’ve made lots of videos on this topic in the past and there’s a lot of negative feedback especially around… Well it’s not very patriotic to outsource because you want to watch like Shark Tank and like, “Well, our product is made in the USA.” Right, yeah. Well, and we can have a big discussion and maybe a debate on that. But in the world of small business, I believe because I’ve seen the fruits of it. That is it is such a blessing for our country that we have the opportunity to outsource to other countries that have such a low cost of living. It provides huge benefits. I mean, one thing that I’ll just mention real quick. It really increases our standard of living. I mean, look at this. If this were made in America, if this were manufactured in America, it would… I mean, these are expensive things too because there’s a lot packed into this. But nobody would be able to afford it. Yeah. The company is headquartered in America but it’s not manufactured… This, the all the pieces inside are not manufactured here. And the only reason that this is possible is because of outsourcing. Yeah. And so, outsourcing… What went into in fact, could I cut you off very quickly. I mean, as you mentioned from a small business perspective. If you weren’t able to outsource what you do for such an affordable rate to the people of the Philippines, meanwhile blessing their lives, you wouldn’t be able to have your small business. You could not afford to do it. So, you have a small business that has an impact locally here. It’s not as huge of a financial impact or an economic impact as the larger organization set, who do have the resources if they choose to in many cases to manufacture in America. But single guys, solo proprietor, you know, if you can’t do that then you don’t have the business. So, that’s the choice. Does the guy get to have his business and thus put money into the economy or do we get upset at him because he’s outsourcing to people in another country? Really pennies on a dollar compared to what larger… My company is a clear example. My company would not exist without outsourcing. Exactly. That’s exactly what I meant. You personally would not be doing this. I mean, going back to my former service when I offered website design. All of our customers were in the United States. There was a maybe a couple one in Australia, maybe one in one or two in England and a few in Canada. But think about all the the help that we did to mostly American companies, helping them with their website. That we charged them such a significantly less lower price. Obviously because our costs were a lot lower. And yet, we charged a lot lower price and we were very profitable. It makes sense. And so, same thing nowadays. I mean, I help people with daily YouTube channels. And so, imagine as a YouTuber, you hiring, you know, somebody to do your editing, your text effects, somebody to manage your topics and you’re the launch of YouTube with all your keyword research and the designing the thumbnails. You know, it can it can easily fit for a daily channel that can easily take 3 or more. A team of 3 or more people and because my outsource, the costs are obviously drastically lower and that’s why people can hire me to film 30 videos every single month. I love that. Yeah, okay. Let’s move on to another benefit. This is really cool. Especially when the country, the outsourcing tool is literally on the other side of the planet. Because I can go through my workday. If I work, you know, a traditional, you know, 8:00 to 5:00 type day. I finished my work, I have a list of tasks that I’m thinking I would like my team to do. Right when I’m ending my work shift, 5:00 a.m. for me is like 7 or 8 a.m., depending on daylight savings. 8 a.m. in the morning for them. So, I finished my day, I give them a list of tasks and by the time I begin my work, you know, the next day, all those tasks are already done. Yeah. That’s so cool. Around the clock. To know that I’m sleeping and my team is working away. Yeah. So, yeah. And they’re not working graveyard shifts. Yeah. I let them control their hours. Which is also nice.
So, another great advantage is I love the fact that this is helping people in a third world country. Because there’s A lot of charities and, you know, I sometimes I felt guilty for certain charities that I haven’t contributed in or humanitarian things that it’s like, “Now, maybe I should contribute to that and then I’m… But then I was reminded like, because you know I… I produced faith and things through my church and whatnot. But it’s it’s pretty distant. It’s kind of like donating some funds here. And then I thought and I’m feeling emotional about this. I provide full-time employment for 9 young people in the Philippines. And I’m like, “That’s pretty cool.” Yeah. Not too many people can say that. Indeed. And so, it’s it was shocking to me at first. I’ve been outsourcing for eight and a half years. In the beginning, even for the first couple of years, it was shocking to me when they would, you know, share their thinks and their gratitude with me and it’s… Because I I feel like, “Man, I paying you 400, I’m paying you 500 bucks a month for full-time work.” And you know, and obviously, I’m charging, you know, for a website I would charge two thousand dollars. And so I would feel a great sense of appreciation for them. Just like, “I’m so grateful for what you do and then I’m able to to do it for such a low cost.” But to have them turn around and just say… For example, this is a woman that no longer works for me. She’s now a full-time mom. She started working for me before she was a mother and she… And I paid her about 400 a month. And she emailed me one time saying, you know, she’d been working for me for about a year and she said, “Thank you so much for allowing me to work with you for the past year, we were able to buy a new house that’s up on a hill. So, when we have the flooding, we don’t have to worry about water getting in our home anymore.” And I you know, it just you know, sorry. It just it really hit me like, what a great service that this is. You know, and I again, I feel like it’s such a great blessing to me and to entrepreneurs that they’re in United States that can use this. I mean, it’s real humbling to know that it is a great great help to them. Outsourcing really raised has raised the standard of living. The cost of the things that we buy. The cars that we drive, all the appliances, the furniture, the clothing that we wear. I can go and spend $100 on a shirt but if I if I want to buy that same shirt for ten bucks, I can because of outsourcing. You know, I can go to the… Now, I’m wearing my, of course, I’m wearing my “Be the Hero shirt.” Of course you are. But I can go to… I like to wear Under Armour. So, I can go to the Under Armour store and find a shirt for for 10 or 20 bucks and that wouldn’t be, you wouldn’t be able to buy shirts of that quality, for that low of a cost without outsourced. Yeah. That’s true. We all benefit. No question about it. Obviously, it’s a big help to my business. Why am I making this video? Because I recommend that you outsource. Just think about the huge impact that would make. What would you do if you had somebody working for you, eight hours a day. And you could do a lot. And you didn’t have to pay them 5 grand a month. You could pay them 500 a month. Yeah. That is, that’s the… Imagination runs wild. The things that we could do with the time and their resources. And putting, you know, a lot of people like to get into business to put their own energy, into it their own mental that I want to be the leader and the visionary. But especially in a small business setting, you end up wearing a million different hats. And to be able to outsource some of those hats at a very affordable price is exciting. No question about it. That’s the difference of being self-employed versus actually being a business owner. Where you get to grow and create systems that then instead of trading, your time for dollars, you’re actually creating a business that runs independent of you in… Anyway. We promised some cons… Yeah, we’re going to talk about some disadvantages. And you know, I’ve been doing it for 8 and a half years. So, these are from my real experience. And one is that, “I’m not there to look over the shoulders of my team.” And my team, I’m talking to the camera right now because they’re the ones that edit this video. I have a lot of trust in my team. Clearly. And I’m going to share a couple stories when it’s kind of backfired. So, it’s listed under the the disadvantages section here. But I’m not there. You know, to look over the shoulders on my team or to supervise them. And when they say they work 8 hours, I just choose to trust. I expect to see results and stuff like that. Right. But of course get the job done. Yeah. I mean, and so, that would apply to remote worker of any sort i guess. Sure. Yeah. I’ve also found that through outsourcing to a foreign country, there’s a little bit more a hand-holding that’s required. This could be a good or a bad thing. I mean, if I create a system and I hire somebody to then, follow the steps of that system whether it’s to design, you know, a video logo, video intro in a certain way. When they created it first time, it won’t be what I am hoping for. But I can then go back in and say, “Okay, well here’s what you did right, here’s some things that I need corrected.” And they’ll go through and they’ll make some improvements. But it still won’t be exactly the way that I want. But over time they’ll get what I want. And so then, when I had them another project, I might have to give them feedback once or twice. And then it’s all… Over time they learn and so… There is time required to train. And I called it hand-holding. Maybe that’s… I don’t mean that in any derogatory way but it just takes time. You know, I’m going to talk about one more advantage. The time that you put into people in the Philippines especially, is well worth it. Because they’re very loyal and they’re not going to become your competitors. I was really worried about that at the beginning. If I share all my secrets, what stops them from leaving and going starting their own company? Becoming my competition. Yeah. It just doesn’t happen. We’ll talk more about that in another episode. But it does take time but it’s worth it. You put the time into training somebody. And now, it’s it’s really… I’ve replicated myself because I trained them to do things exactly the way I’ve done it. And I’ve replicated myself and I can do it again and again. We were talking about disadvantages, not advantages. Well, you jumped on to the advantage list. Alright, so here’s a disadvantage. I have found that some people are flaky. And this is just a practice. I’ve found that if I hire two people that will typically end up being one good person because one person will just flake and disappear.
So, it disadvantages. Sometimes people are going to be flaky. You know, there’s things that you can’t… But that’s also disadvantage in a face-to-face setting. You know, if you’re working with them locally, you’d still also end up with a flaky here and there. It just may take you longer to weed out the flakes, if they’re 9,000 miles away. Yeah, definitely. I mean, because you don’t get to meet them in person and and we’re going to make another video on how to find somebody and how to hire them, how to get them started. I have some great tips on that that I’ve learned over the years. But it’s different. It’s different than meeting somebody in Person and getting to to shake their hand and whatnot. Now, I’m going to tell you the story. So, Scott asked me about my first experience outsourcing. Tell us about your first outsourcing experience. I’m going to need some water for this one. Oh, boy. He’s going to get all moistened up here. So, this is going back almost 9 years ago. I had already listened… You mean at the start of this episode? No, I’m saying it feels like it’s been nine years since we began. No, you’re fine. Keep going. So, almost 9 years ago. Cue the music. I had learned about outsourcing from an audio download that I had. And I got so excited about because I’ve learned about outsourcing in the book “The 4-hour Workweek” by Tim Ferriss. That you’re listening to? Well of course I listen to that one. When I listen to that one multiple times. But the outsourcing thing seemed really foreign to me. And I’ve used that line before and realized that that’s kind of a… Of course it’s outsourcing is form. No pun intended. Yeah, unintended pun there. Now, outsourcing was just it seemed too big of a step from what I learned from 4-hour Workweek. But then a friend of mine John, he’s a friend of mine now. I listened to this audio and within 36 hours I had hired my first person. Wow. Because it just like I had a paradigm shift about if I can actually do this. And I didn’t realize that you could hire somebody for 400 bucks a month. So, I hired my first person. This is what… I was still an employee back then. I was an employee doing telemarketing sells but I also wrote articles for them as an independent contractor. So, they did article marketing back there, back then. They would give me topics and tell me to write an article of a certain length of words. And depending on the length, they would pay me $10 to $12 per article. So then, I learned about outsourcing right after starting this article writing thing. And I decided to hire a writer. A ghostwriter. Yeah, in the Philippines. And so, I give her the topic, she would write the article, I would proofread it, correct a little bit and then I’d sent it off, I’d get paid 10 or 12 bucks and I’d pay her a couple bucks. And it kept going for a while. And over time she got better and better. So, this was a… This is a pretty awesome, pretty awesome setup. I was pretty proud of myself. Yeah, I’m outsourcing and… Okay, well fast-forward a few months and I hadn’t been keeping tabs on things, I had been really taking care of quality control. As you say. And I just decided to check. So, I grabbed an article, something must have triggered it. Like, I read something like, “That’s really good.” It was that… You know. So, I copied… Too the good for the ghostwriter. I copied the paragraph and pasted it into a tool that I think it was grammarly that I used in it. It basically said, “This sentence was pulled from here, this was pulled from here.” And I was like, “Oh, this whole thing that she had written was just plagiarized content pieced together from other sources.” Without attributions at all. Oh, no. It was like, here’s the article. And so, I had then… I had submitted, I went back in the history and found that there were 50 articles that I had submitted to my company that I’d already been paid for that were plagiarized. Wow. So, I fired her. I probably could have gone to her and talked to her and said, “Did you know?” But I think she knew. And they didn’t fire you? Well, as soon as I knew, I’m like, you know what? I’m going to get in big trouble if they catch this. Right. So, I went in that very next morning and I went. And I went to the CEO of the company and sat down and I said, “I have something I need to share with you.” He thought it was hilarious. He wasn’t mad at all. He just thought it was funny. But he wasn’t my supervisor over that position. So, he said, “You got to talk to this guy.” It was a punk kid. Much younger than me and liked having his position of authority and he did not like it. And so, I was allowed to rewrite the 50 articles myself that I’d already been paid for. But I was not allowed to be an article writer anymore. Wow, that’s quite the restitution there. So, is that a… That’s a disadvantage of outsourcing. Well, part of it is a learning experience. Because man, after that happened, what did what do you think I did? Within a couple months I had 10 employees. I had caught the bug. Wouldn’t think you’d have done that. Oh, I caught the bug of outsourcing. So, I realized what I could do. I just blamed myself for that problem happening. Because I realized, “Man, this thing can really work.” You know, I mean, yeah. It had a bad ending in that specific story. But just seeing what was possible, I’m like, “Okay, that was my first try.” Do these people pay taxes? Are you responsible for any of that? You I don’t have to worry about that unless they’re US citizens, then you have to worry about taxes and insurance. But when they’re in another country like that, it’s just like you’re paying an independent contractor. So, I call them employees but technically they’re not employees. They’re like 10-99 type of people or what I hear. That’s an advantage. That is an advantage. Huge advantage. Yeah. Alright. So, I’ve got one more story and this one’s a recent one. And it’s a doozy. It’s a doozy. So, I’ve been outsourcing for 8 and a half years and I really only have these two stories to share of bad experience. Oh, oh! And I’m not hesitant to share this because I had… Why do I hide it? But this was kind of a doozy. So, I won’t mention names. But I hired a guy last November as a video editor and he’s very skilled. He’s very skilled. He could do everything I wanted. Even using Adobe After Effects. And he worked for me for a couple months. But some of the communications that we had, I was suspicious of. I had some suspicions but I was getting work. You know, I had suspicions and the hours that he was reporting. I had suspicions in. I wanted a certain output and here. The report that his computer couldn’t handle it and certain things. But you know, I had experience already. And I knew what should have been possible but… Then, it came to a point where I needed to hire a second person in that same position. And he recommended that I hire his brother. Hmm. And I cut corners in my hiring process. I wasn’t as thorough and hiring the brother. I just kind of trusted. If you’re going to like this story.
So, now I’ve got his brother and him working for me doing that same position. And I started to have more suspicions but I’m a trusting guy. I mean, I’ve had such a great experience for 8 years. And in fact, one of the editors on this video has worked with me that entire time. He started with me on my web design team. I love my team and I trust them and they deserve that trust. But in this case, I started to have some suspicions and I just started thinking about him more and more often. And and then one of my other team members came to me and said, “Nate, I think…” And I’ll just say the second guy, the brother, “I think the brother is a dummy.” And as soon as I heard that, I’m like, “Yeah, that’s what I’ve been. That’s what my guess was to. Meaning, that… And so, we decided, you know what, we better… Not a real person? Not a real person. Yeah. He just doesn’t exist. Okay. So, here’s the first person I hired and here’s the brother that we hired. Right. I think the brother really exists and has a name but was not really an employee. Yeah. Didn’t really do work for me. Didn’t really do a trial assignment when I went to hire and whatnot. And so, I decided, “Well, before I put the brakes on anything or mix things up, let’s find out for sure.” And so, normally you think I’d be mad. But I felt like, “I’m a detective, I’m going to figure this out.” And I put on my detective hat and we went into the some of the analytics of our project management tools and I found concrete. Almost like, “How did I not see this before?” Just anyway. We found total proof and what we found out what’s happening is person a was actually only working about 80 hours a month. So, just part-time hours but he was reporting full-time hours and he was reporting full-time hours for brother. So, I was paying four times the work that was being done and that had been going on for a few months. So, yeah, that can happen. Because you’ve never been there. That’s never happened to me before and… I mean, you’ve never been there to actually go over and talk to them? And never made a boss visit of any kind right? Correct. That just this morning I was talking to one of my team members that she was asking me if I’d ever been to the Philippines because she’s just worked for me for a few months. And I said, “No, but I I’m hoping to go this year.” I’m really looking forward. But still overall. I mean, that’s a disadvantage but I mean, I know I don’t know if we’re done with the list of disadvantages but those are some doozies. But like you’re saying, in the 8 eight or 9 years, only those two real major kind of issues. Yeah. Aside from maybe attrition here and there or whatever. Yeah, so I want to end this video with a positive… Talk about, so, the the team member, that’s bent there was a project manager on my website team, that’s been with me for over 8 years now, such a cool example or such a good story. He’d worked with me for several years and the there was a time then where I needed to hire another graphic designer. He recommended his brother and I took a look at his brother. I had his brother apply and his brother didn’t have the skills. He wasn’t at the level that I needed. So, I had to pass and I hired somebody else. 2 more years go by and I need another graphic designer. His brother says, “You know what? I think my brother is ready now. I’ve been teaching him. I’ve kind of been tutoring him, mentoring him. Plus he’s got 2 years of school that where he’s been studying graphic design. Can he apply again?” Yeah. And I said “Absolutely.” So, he applied. He had the skills. He had exactly I was looking for. I mean, my project manager knew who, knew exactly, you know, so he could train him perfectly. And he’s been working with me for several years now. And it’s so cool. So, we’ll just call him my project manager. He’s… And this is cool, too. So, he’s a single guy and over the years I’ve given him raises because he’s been such a great, you know, he’s just been so reliable. He puts out all the fires. Company would not be the same. Company would not be the same without you. And so, I’ve paid him more and he’s… I come to find out he actually paid for his brother’s college education. Which just totally touched my heart and like made me so grateful to have him. Good thing you hired him. And the he let me know just a week or two ago that he’s engaged. He’s going to get married soon. The brother? No, the Project Manager. Yeah, yeah. Without dropping name. Phil, Lou, Ted, yeah. So, wanted to end this video on advantages and disadvantages with definitely a positive note. Love, love my team in the Philippines. Oh, that was a long one. A long one. And if you watch this long. Been. I’m sure they’re already a subscriber. You got no kidding and if you’re not, are you kidding me? If you have, you’ve made it this long, you’ve subscribed a thousand times. Now if… How do I make it stop? You’ve already experienced outsourcing and you’ve had good or bad experiences. Love to hear from you. Share them in the comments below, it’ll be a fun conversation.