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Is Outsourcing the Key to Your Agency's Growth?

Is Outsourcing the Key to Your Agency's Growth?

This week on Agencies Drinking Beer, Kevin and Kyle interview Paul Higgins, CEO of Think to Act, a Melbourne, Australia based company that helps agencies grow through outsourcing. Paul talks about how the powerful combination of the right people in the right roles along with the right technology can make a big difference to an agency's bottom line. Tune in to see if Kevin and Kyle outsource beer drinking.

After a successful 18-year career with The Coca-Cola Company in Australia, Paul Higgins was ready to jump from the corporate world into entrepreneurship.

The challenge Paul faced right off the bat was that during his time at Coke, he worked with a 150-person team, but all of a sudden he was alone in trying to get everything done.

He was working a crazy amount of hours and not making much progress. He needed to find a cost effective way to grow and manage his business.

In his efforts to crack the problem, Paul discovered two things that turned the tide: outsourcing and an online work management platform.

The combination of people and technology was the tipping point for Paul's own business and when companies heard about how well it was working for him, they wanted to know more.

And that's how Think to Act was born.

Outsourcing + technology = efficiency and growth

Paul and his team work with an agency to identify the skills gap in its current people that can be developed, and where there are gaps that can be supplemented by building a virtual team.

What kind of agency can benefit from outsourcing?

The typical agency that Think to Act works with has been in business about 5 years with between 11-50 employees. Things may be going well but the agency owners realize that while they're paying everyone else and their revenue is growing, their profit is not growing.

They're also out of time themselves, being pulled in lots of directions with never enough time to work on the business.

The agency may not want to be bought by a bigger global agency or go into a pool but they want to grow from where they are and start to scale.

They want to start making better profits, which means they'll be able to service their clients better.

What's the biggest reason an agency would outsource vs. growing their team locally?

1. Outsourcing gets local people to play to their strengths

People often end up doing stuff they don't know how to do or just don't like doing so outsourcing removes that.

2. Outsourcing can provide a better client experience

Agency owners know they should spend more time with clients but they just don't have the time. By having other people take care of the back end, it frees up time to spend investing in clients.

3. Speed to market

Outsourcing helps get things done quicker, thereby compounding profit.

As a result, the cost savings allows you to better manage your cash flow.

There's never been a better time to do it. People have a fear because they've never done it before but once you get past that, outsourcing can be really exciting and really beneficial.

Know your billables

A lot of agencies don't track their billable vs. non-billable tasks so the first thing Think to Act does is help an agency see what’s happening team-wide on a per month basis.

This lets the agency know where the people are who are performing really well and where the people are who can improve. It sets a baseline for growth.

Client need vs. agency capacity

Next, Think to Act looks at what an agency's clients needs are vs. what they don't have capacity to fill presently.

The strategy is to recalibrate that imbalance by bringing people in at about 1/3 price of local talent.

Often the local employees are spending 50% of their time doing admin that isn't billable. By removing those tasks, there's more capacity and more billable hours.

Are agencies afraid to hire people in other countries?

According to Paul, everyone has a fear of hiring people in other countries but like many situations, the actual is often less than the fear.

Think to Act works individually with each agency to sort through their concerns, and provides case studies of how they worked with similar agencies who ended up with profitable results.

How can agencies outsource?

Paul says most agencies outsource through a combination of situations:

1. Freelancers

This is a common relationship for an agency and there are qualified, available people all over the world.

2. Working with an outsourcing provider

An agency might have a satellite team working in an office together.

3. Setting up your own satellite office

This works if your agency has 50+ people on the outsourced team.

4. Outsource anything that is not face-to-face

Paul recommends starting with tasks that touch the client the least, and then move to things that are more client-facing.

Most agencies start with admin and finance, then non-voice customer support, and sales would be last.

There's a progression with outsourcing that reduces some of that fear of protecting an agency's brand, which is really important.

How do you build a culture within different time zones?

Building culture is an important part of any successful business and human interaction can help build and strengthen teams.

Paul suggest three things to help you stay close with your team even if they're far away:

1. Daily online huddles

Hosting even a quick huddle on Skype or video every day can make everyone feel like they're just down the road.

2. Weekly Updates

Schedule a weekly conference call where everyone shares updates on their projects and what's happening within the company.

3. Face-to- Face Meetings

Paul recommends that agency owners jump on a plane and visit their satellite teams 3-4 times a year. Not only does this give owners confidence in the work their people are doing, it builds loyalty and morale among the outsourced teams.

Is your agency thinking about outsourcing?

Paul suggests starting off by talking to colleagues and peers to see who might have gone through a similar process so the unknown isn't as scary.

Then find a trusted company like Think to Act who does outsourcing professionally and can guide you easily, safely, and profitably through the process.

  • Has your agency tried outsourcing?
  • What has your experience been?
  • Was it a positive move for your agency?
  • Leave a comment about your thoughts and experience on outsourcing!
Proposify Biz Chat

About the show

The Proposify Biz Chat is hosted by Kyle Racki, co-founder and CEO of Proposify proposal software. Each week, Kyle chats with friends and special guests about tips and strategies to help entrepreneurs, startups, and agencies grow profitable businesses.

author bio

About Jennifer Faulkner

Head of Content , muse for . Channeling Maria Von Trapp, Queen Elizabeth II, and my taxi-driving, yard-sale-obsessed grandmother. Professional word nerd and unapologetic disciple of the Oxford comma. Follow on Twitter

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