Outsourcing: The Good, The Bad, and The Ugly

Leo and Claudine discuss the logistics behind modern-say outsourcing, cover new legal bills in California that affect outsourcing, and identify the good, bad, and ugly of it.
Prefer to read? (Transcript)

Speaker 1 00:11 Hey, good morning everyone. Happy Saturday you are listening to business illegal talk with Leah and Claudia and I am your host Lee Yolanda Verda and my cohost right here, Claudia and Sharon. Hey, what’s up? Good. Just getting busy. Happy Saturday. Yes. No sleep this week. No sleep. Well, the good news is that we’re busy. Right? That’s a good thing. Getting new clients. I’m signing up a probably tour the whole state of California ones this week. Really? Yep. Really? So I was looking at my miles, uh, for this last week and it looks like about 3,700 miles
Speaker 2 00:51 business miles. Wow. In one week. Wow. That’s crazy. I’ve been all over. That is crazy. I was in Tillery this week, had to be there for eight 30 calendar and I, I thought, Oh my goodness, that’s a long drive at that hour, which is great. I don’t mind the drive and it was actually really nice to see the sun come up. But I’ve been on the road too. But it was really nice to I w I think I must’ve been, you know, along about child chill about the, the time the sun came up and it was a beautiful, beautiful sunrise. What time were you on the road? I left at five because I was really worried cause I’m not sure what kind of traffic I’m going to hit coming through Fresno and you know, you’re on the eight 30 calendar. You better be there and ready to roll. I mean if you’re not there, you’re a default and the clients are not really thrilled with that. So I’d rather sit outside the courthouse door.
Speaker 1 01:44 You’d rather be earlier five minutes early than a minute late hour. I’ll take an hour. I’d prefer an hour. Yeah. Well you’re a consummate professional. Cannot, cannot be late. God bless you. So I’m a, if you’re listening to this show, we are very excited. We keep doing this. We keep getting great feedback. We are here to help you, the business owner who is, whether w regardless of whatever stage you’re in business, you need good people on your corner, cheering you on, telling you what’s up, whether it is business or legal. And that’s what we do. I mean, and, and, and, and what is being great and well-received about this show is that, uh, it’s actionable. You know, we’re, we’re, we’re sharing things that are happening and, and, and, uh, in real time, right? In fact, I’ve decided to, uh, you know, the first segment of our show, we usually talk about what’s happening on the business briefing and the legal briefing.
Speaker 1 02:36 So I got some stuff to share with you guys. And, um, I know that when a Saturday morning as you’re going to and fro, I’m pretty go into the store. You know, it’d be just good to kind of put a twist on, you know, how some of the things affected in a central Valley. So I read, um, this week, uh, but this article in the wall street journal about the death, uh, you know, we keep saying, you know, retail is right. Right, right. And, uh, you, you know, malls are just disappearing and, uh, all the mineral we’ve been talking I think consistently throughout the show for the last few months, that every week it seems like a new retail store is going out of business.
Speaker 2 03:12 That’s right. Yeah. I’m really bummed out about dress barn.
Speaker 1 03:15 Yeah.
Speaker 2 03:16 650 stores. They’re great. They’re a great store for, um, you know, for, for women to get, you know, comfortable, casual business clothes.
Speaker 1 03:25 So loan as anthropology doesn’t go out of business. Right. My wife is very happy there. Here’s a plug. There you go. Okay. So you would think, right? I mean, this is what I thought. Okay. Retail is dead. Amazon came and they just reinvented the whole thing. Now, um, the costless will stick around. That woman would always be there. But what about the rest of us? Right. The world is, and here’s what I read. Okay. So, um, so what is actually happened, this is according to the wall street journal. So what is actually happening? It’s more, it’s not like it’s going away. It says the death of the brick and mortar stores has been greatly exaggerated and is not that it’s going away is more of an industry transformation about that as the vast majority of sales continue to be made on site, I suppose to online.
Speaker 1 04:18 Hmm. Right. Uh, interesting. Especially for groceries helps your products in cars with e-commerce, giant, Amazon and others even slated to open as many as 150 stores in the next few years. All that can really be said is that retailers evolve in to accommodate new customer behavior according to journal. And you know what, here’s the deal. I go to the bigger cities are quite a lot with the Bay area or LA, which is kind of gravitating that muesli to LA. And I was at a mall on the West side, the West side pavilion or somewhere in West, um, West Los Angeles. I came to this mall. I was just there to work for a couple of hours. I, it went on forever. Right. I mean it was beautiful. He had, so malls is changing this whole thing. There’s this, there’s a paradigm shift going on in the industry. You’re not there longer to shop. You were starting to go into malls to be entertained and stay there for the day in a stair there for hours. We want to have meals there. We want to have, go to the movies there. We want to, we want to play there in this whole, you know, um, uh, games and, and th it’s basically a destination.
Speaker 2 05:36 Well, it’s interesting because I along those same lines, I think when you see some of the bigger box stores, let’s just say for example, the Walmarts and the targets that have combined groceries with shopping for clothes or you know, oil for the vehicle or whatever it is because groceries are that product that you really want to buy. When you see it, you touch the apples or the tomatoes or whatever it makes. Yeah. It makes you a little nervous. It have, you know, to order your, your produce. Um, I think by combining them, they kind of capture that, that’s part of the, of the shopper that wants to actually be there and touch it. And then while you’re there, you’re like, Oh, you know, I’ll go get shampoo or you know, you know, clothes or socks or what, you know, whatever it is. So they’re able to kind of, because they’ve combined it with that, that product that people definitely want to have their hands on. So it’s interesting that you bring that up about the mall is that it’s the combining of other things with the ability to purchase where it used to be. You went in and it was just nothing but purchasing,
Speaker 1 06:35 right? Yeah. But there is a blending of the online world in the offline or the onside versus online in clearly when Amazon did, the leader of online shopping experience acquires a whole foods, was it whole foods? Right, right. They put a stamp. So you’re not going to a whole foods and you see the, you know, the Amazon logo and it’s just blending the two worlds together and this is what’s going to happen. So I was, Oh, it was interesting. I wasn’t interested in read. How about this one? Uh, I was shocked. But this is according to, you know what the word on the street, and this is according to the Washington post, are around 5,400 hidden apps trackers operate in an ordinary iPhone. Let me say that again. About 5,400 hidden app trackers operate on an ordinary iPhone. Not 10, not 100. Wow. I says, talk about data collection. So where the Washington post privacy statement found over the course of just one week using monitoring software on range of trackers, shared personal details such as email addresses and locations, uh, with third parties, particularly overnight, creating a trove of personal data for marketing and political messaging. Denton, while some apps require trackers to function properly, the experiment raises concerns about the transparency of consumer data. Here’s what people are saying, right? So if kind of creepy,
Speaker 2 08:11 it is very creepy. I, and you know, I’m word may, I’ll speak for myself, that generation where that piece of the generation where, you know, computers came along, you know, in my late teens and so forth, but really obviously evolved in my adulthood and yeah, it’s about my time to you any, anyway, um, it, um, you know, we weren’t like our kids grew up with this technology all, you know, that was just thriving as they were growing up. And so they’re very, very accustomed to their life being, you know, involved with the technology and the apps and all of this business. And so for, for me it’s, it’s almost as it’s gone too fast that we’re just now going, okay, wait a minute, hold on, hold
Speaker 1 08:56 on. There’s a lot of other things happening here than just me being able to log onto my phone and you know, open an app and, you know, whatever. Read a book or you know, whatever the app is doing, check my bank balance or whatever. Right. Hey, listen, I, I know we got a break coming up. We should probably talk about, you know, introduce the topic that we’re going to talk about shortly. And that is outsourcing. Hey, so outsourcing the good, the bad and the ugly. What’s the verdict? Right. Um, and um, we’re going to be developing this topic today and I think you should stay tuned because it’s going to be very important as a business owners to know when to outsource, right? So, Hey, stay tuned. You’re listening to business and legal talk with Leo and Claudia and we’ll be right back.
Speaker 3 09:35 welcome back. You’re listening to business, illegal awkwardly
Speaker 1 10:07 and bloody. And we’re having fun here in power talk 1360 Modesto, Stockton. Just talking about now outsourcing. What is the deal with outsourcing? And you know, I’ve got to tell you not to long ago clubbing, this was a bad word, right? Oh, you outsourced? Oh my gosh. Are you, why are you doing that? Um, well, and I think we probably should define what is outsourcing because I think everybody’s got a different version. I know when you and I started initially talking about this, the word kind of triggers a different meaning to different people. And it doesn’t necessarily mean outsourcing offshore or to other countries. And on a very small scale it can, it can be outsourcing just simple tasks and projects where, where, um, you know, you, you use, like for, for our services, there’s legal services, there’s one legal. And so they will, you know, have renters that will go to the courthouse and pick up documents or file documents and stuff like that.
Speaker 1 11:06 So there’s, you know, there’s a, there’s different types of outsourcing. Yes. Um, thank you. So sometimes I S I assume people know, so you, you’re very good at helping clarify what I, my own definition of outsourcing is anything that, where the technical competency will be greater elsewhere than have it in, in house, for instance, um, in the areas that are non-core. Right? Okay. So, um, areas of marketing, if, if you’re, you know, if you’re not a marketer, then marketing, right? If you’re not an accountant, then accounting, uh, if your lawyer, any other support areas where this strategy, because face it, it, otherwise you have payroll in house, right? And you know how that much costs, right? Right. Yes. We want to have great and we want a great employed, great amount of people who we want, uh, us to be with our companies for years to come.
Speaker 1 12:07 But the reality is, you know, payroll will be your most expensive costs of course. So what the paradigm is now, this is not something that we just came up this decade. It’s been quietly going on for in corporate America for decades. Of course, you know, first when the, you know, this whole call center started and that was outside as offshoring, right? So when you go, you know, to the Philippines when you go to India, um, you know, long before he was a, a kind of a sexy word. Um, Microsoft was outsourcing stuff for India for long, long, long time, right? Before everybody else caught up to that, right? Because it’s mostly driven by costs, but that is much more than that. So my definition is if there are areas that I could hire someone that may not be as good as somebody in my non core area that I could benefit from having them, that’s a way to go. That will be at a fraction of the price. Right.
Speaker 2 13:10 So this, so let me present to you, um, uh, kind of, um, we are in quite a conundrum, particularly in the state of California when it comes to outsourcing because outside sourcing is also known as independent contracts. You would bring that of course because it’s one of the biggest legal issues we’ve got right now facing us as business owners is how do we, um, legally use independent contractors with the Supreme court here in California, making this big effort to change how we classify people. So we use to classify them on a balancing test. And I think we’ve talked about that before and now we’re the ABC. Yep. And now we’re back to ABC. So what the ABC says if is, if you, you cannot be an independent contractor if you are performing the same type of work as the hiring entity.
Speaker 1 14:03 Yeah. Well they call the core business, right? So you’re an a lawyer, you know, you’re an attorney in the legal work, a cow, can you outsource some of that if that is your core base,
Speaker 2 14:12 that and that. So that’s the question is can I outsource paralegal work? Can I outsource, um, you know, court runners, do they fall under the umbrella of what the hiring entity does? Exactly
Speaker 1 14:30 how we, where are we with that? Anyway,
Speaker 2 14:32 we, we right now have competing ledge legislation sitting up in Sacramento and one, uh, side is trying to put into law this ABC test. Um, so that we were basically it making a huge move just to outlaw 10 99 subcontractors altogether. Say that again. It’s a big effort to just outlaw 10 the whole concept, the whole concept, not that they’re making it so stringent that very, very, very few times does somebody fall under that umbrella. So for example, as an attorney, if I hire a plumber to come in and do plumbing work at my office, that is the clear example that that is an okay independent contractor to hire because the plumber is doing something that nothing falls within the umbrella of what the hiring entity does. So we typically, in even before the ABC test, we would use the construction industry, um, as an example.
Speaker 2 15:34 And they are the classic independent contractor. So you have your general who’s running your job, right? And then you, yep. Your prime. And then you have your general who hires your electrician, who hires your plumber, who hires your sheet rockers, your painter and so forth. Um, they hire them, but they are truly independent contractors because each one of those subcontractor trades has their own licensing, their own business. They have their own insurance, their insurance, their own marketing and, and so forth. And so they are the classic examples. So whenever you’re looking at using an independent contractor, keep in mind that classic example and think to yourself, how close am I to that example? So in the past we would work with clients and we would, if they wanted to use somebody as independent contractor, then we would insist that they can be completely set up as their own business.
Speaker 2 16:23 A micro businesses, fine. Just a single person. They would need to get their own liability policy, have their own business cards printed, give the hiring entity an invoice on regular interval intervals. Um, and so they would truly operate in that spirit. Now we’re really in a place where we don’t know where it’s going to go because one, when legislation is trying to codify it one way and the other legislation is trying to go back to the old way that we considered and I read something to you. Yes. Ironically, this is such a hot topic that today I get an email from an insurance broker really and listened to this. He says, Hey, FYI, his California residence wore, this is both of course, if you’re, if you’re listening to this unit side of silk California, that doesn’t apply to you, but for us here in California, California residents working for companies like Lyft and Uber will get the rights of employees entitled to a minimum wage if workers’ compensation under the law, the state of assembly passed on Wednesday, the sweeping bill, which now goes to the Senate, carries new standards defining whether workers are employees or independent contractors ending how workers are treated in industries from trucking to the bargaining gig economy.
Speaker 2 17:38 Yet, hold on, there’s more under this than this. For example, workers could only be classified as independent contractors if they are free from the controller direction of the employer. And they do work outside of the company’s usual course of business, which we’ve
Speaker 1 17:50 been talking about. The measure assembly bill number five includes exemptions for some sectors such as physicians and insurance agents. So there carve out, and this bill is, is, is physicians and insurance agents, Democrats in major labor unions back into bill a content. It will protect workers. Right. And he goes on and on and on. So what do you make of that?
Speaker 2 18:13 Well, it sounds like I’m, the new ABC ABC test is halfway to the finish line and it’s going to be interesting to see exactly what industries get carved out because I know in speaking with some, um, what about the realtors? That’s where that exactly what I was going to, I’ve been speaking with some of the legal folks within the association of realtors in our area. Um, and kind of getting their field, they have, um, always relied on a business and professions code that they got classified under. Um, and at the, I don’t recall what code it was, um, what the number is, but I read the code and essentially it says that, you know, real real estate salespeople can be classified as independent contractors or employees. And so they’ve always kind of apparently used that to say we are statutorily exempt from being classified as a, as an employee, which I think goes a little farther than what the code actually says.
Speaker 2 19:11 But nevertheless, real estate agents are your classic 10 99 contractors. Um, but if you read the new, the new ABC rules, and I have not read the, the legislation that’s being proposed, but if you, what from what we know of it, real estate agents would be, they would fall under the employee classification because they are selling. That’s what the broker does. Coldwell banker is selling real estate. So the sales people, they’re just sales people just like a salesperson in any other industry. Um, but they have just traditionally been classified as 10 90 nines and so interesting that one of the prongs is the control over the employee or the, the contractor. What kind of control is exerted. So if you go back to the classic construction model, which is again what we’ve looked to traditionally, your general contractor has some control over the plumber. I mean the general is responsible for that entire project being done correctly.
Speaker 2 20:15 Right? So he does, or she does provide oversight to, to the various trades people, the sub contractors. So even in the most classic sense, there has been some level of oversight and control. Hmm. That is between the two is is it’s just gonna virtually eliminate the ability to use independent contractors, which is sad because a lot of people really like being independent contractors. They like the freedom. They like paying their own taxes, their own write-offs. How many industries can you carve out? I mean, I’m thinking about hairdressers. Hairdressers have already, we’ve seen them already start to move to the employee model. Really? Yeah. Wow. In our area for sure.
Speaker 1 21:00 There’s that. I think there are at least 2 million realtors in the state of Cal, I mean in the U S
Speaker 2 21:05 and you know, so does this boil down to the ability to lobby? Who’s got, who’s got the most lobbying ability pockets and industry association. Right? Right. Can you, how can you carve out what’s the fairness by which we carved out various industries
Speaker 1 21:21 and who did sales furnace is, right. So, wow, okay. So we digressed, but not withstanding this whole thing about 10 90 nines we’re talking about if you were to be able to, and you are sound, um, and any makes sense. I think I like to kind of go into some of these articles that I have here. The ad, there are advantages and also as a business owner you should look at the good, the bad and the ugly, right? Right. Because it doesn’t, is not a one size is not a one glove fits in or what is a one size fits all kind of situation, right? There are, you have to be what it is. And so, um, you were talking about this, this idea that there are areas that you actually have done it yourself, you know, as, as working together and in a lot of companies are realizing that, Hey, wait a minute, I don’t have a core competency on this. And I need some help, right? Should I go in and hire a full time controller? If I don’t need one, should I go ahead and hire a CFO if I don’t need one? Well, you, even if you do need it, there’s a cost associated with it. Right? So that’s something that you’ve taken advantage of.
Speaker 2 22:26 Well, and one of the things that you have to keep in mind is there’s a balancing act because the person who you’re outsourcing to, they have their own operating costs, they have their business costs, and they have their profit margin that they also also are probably trying to maintain to some it to some level. So usually the outsourcing comes from a place of really wanting to work more efficiently. Um, and it’s more efficient if I hire you to make the widgets because you’re really set up to make the widgets and for me to make the widgets that just are not really set up efficient. Yeah. And so that’s really, I think the balancing test does. And the, there, there are several trends and we can talk, talk about it in the next segment, but there are several legal trends, um, that come along with outsourcing as well. Um, and things we should be looking at.
Speaker 1 23:15 So, okay. For the record, I’m a huge proponent of this. You know, I, I strongly believe in it. I have built a business model around it. I think you should too. If you’re a business owner listening to this, I think you should be aware of the options that you have because as coming in as a CFO, I’m always looking for way to increase revenue and decrease costs. Correct. And your biggest cost will always be staffing. And um, and I’m talking about, I’m not even talking about cost of goods or the inventory, but your biggest, it is going to be staffing. So, Hey, if you’re curious to know how to make an extra couple million dollars in a lifetime just by listening, you probably should listen to the next segment. All right, we’re back. We’re back. This is Leo. This is a legal talk with Leah, Claudine
Speaker 3 23:58 .
Speaker 4 24:13 are you still listening? I hope so. Is everybody still listening out there? This is,
Speaker 1 24:36 I mean, Hey, I thought last segment with w, you know, it’s not con is not what I intended it to be, but I’m so glad we had the discussion because this is also such a hot topic. So are you a business owner and you’re driving to and fro. This is the place, this is what we do, business, illegal talk with Leah and Claudine. We’re all about figuring out how to squeeze more money out of that dollar and how to help you make more to the bottom line and how to scale profit about how to be sustainable and how to protect yourself from a million and a half. Things that can go wrong in his precious state on liability and right and unduly my ability in hiring and this is what we do. And I, and I, and um, if you met me, you probably would get a lot more of the same that I, I am energetic, but I’m also very passionate about small businesses.
Speaker 1 25:28 Absolutely. Just like you are, where are the lifeblood and the economy of the state. Yeah. We doesn’t seem to realize it yet, but you know, we tread along so, but it is because of our passion that we are, we are telling you certain things in of course you have to make up your own mind. But I know what is like to start a company into not just one but multiple and having to worry about meeting payroll and you know, and paying rent and getting insurance and filing for taxes. So this topic is really comes out of doing it for a long time, you know, so outsourcing. Okay. So let’s get back to that. So there are some clear advantages to outsourcing. Of course. Okay. So point number one, right? You access to our larger talent pool. Let me give you an example, right? I do accounting and advisory.
Speaker 1 26:26 I know nothing or close to nothing to marketing or branding, but I’d done a fairly decent job on my own. But basically I’m like the blind leading the blind. And then I am so happy that I just brought somebody into our team who is going to take us marketing and branding to a whole new level. It’s so exciting with ideas I didn’t even think about. Right. I mean, I spent two hours with now has become a really good friend of mine who is going to be my secret weapon in pretty soon your secret weapon. But this is where there is absolutely no way that I would have been able to hire someone like Dave. Right. Um, if you’re there listening, Dave Martin, shout out to you. Hey Dave. Hey Dave, you’re listening. You’re listening. You better be listening. So I’m just, because when you look at as someone who’s been doing it for a long time and it basically stuff comes out of his mouth that you like, I feel, I feel like I should be writing this. Like this is like this,
Speaker 2 27:26 right? Yeah. That thoughts coming through your brain is, I’ve got to remember this. I’ve got to remember this. I’ve got to remember.
Speaker 1 27:31 And there he’s gotten, just as I remember that he’s got somebody, something else taking notes for me already. Oh good. Sorry. I was taking notes. Right. And, um, the point is that I would have never been able to bring somebody on board and I couldn’t have paid somebody enough money to have somebody full time minding my business or marketing
Speaker 5 27:47 .
Speaker 1 27:50 That is the whole point of outsourcing. Right? Right. You get somebody great at a fraction of the price right now, if that was the only point I had, I made the point, right. And no matter what the outcomes are and you know, there, there is the drawbacks and we’re going to talk about those. To me that is heavy to have somebody like that, but that’s just one. Right? Um, Hey, you know, again, you know, not to beat a dead horse, but you don’t have to hire more employees. Right? And then what every progressive new employee you fall into this federal and state guidelines,
Speaker 2 28:24 payroll costs, payroll costs. I mean, I think every business, every business, Effie, if you’re not pleased, start looking at how much is your payroll, what percentage of your, of your gross revenue is that taking up? And do you need the, I know, really, I said that through the G R word in there. Two words. Yes, it made you smile. But you have to, you really do have to be looking at it particularly once you start getting to a point where you have, you know, more than five or six because the oversight on five or six employees becomes a little bit of a challenge in terms of managing their productivity. Um, you, you get to a point where you almost have to have somebody who’s managing the pro. That’s all they do is manage the productivity of the other folks.
Speaker 1 29:12 Here’s one thing that I’ve learned and we are not at, I recently took in any computer, the Enneagram test, Enneagram, Enneagram, angiogram. Is any a gram? Oh no. E N N. E. a GRM. So it’s a personality test. Oh, neat. So I, it’s a big thing in LA right now. It’s like everybody’s taking this test right? So I had to take it and uh, it tells you this like 9% of the profiles is really cool. Right. And I think you should take it and just, I’m just curious to see what your personality type and I would love, you’re never just want you to kind of a blend
Speaker 2 29:42 of a correct. Correct. And the best thing is to be a, a balanced blend of all of them. Right. That that’s the goal person will be like one ninth of all nine. Right. Exactly. Exactly. Exactly. None of us are like that, but um, what was interesting is that some personality types hate managing people. Absolutely. No, no, no, no. I’ve, I have my policy, my policy has been people fall into, you know, one of two cat categories and I know that this kind of narrows it down to just two, but there’s project managers and people managers. Huh, okay. It was, some people really enjoy managing other people and working in the social aspect of it. And then other people really enjoy a project where you take it, you know you have a deadline, you have certain metrics that have to be met, certain things have to be done, but it’s a project that may or may not involve some people, but it’s the project that you’re managing to fruition, not
Speaker 1 30:36 people. So you have this project manager and a people manager. People manage it as a skill. It is project to them probably because they have different levels of skills, but not everybody can do it. The problem is the more you have, the more his tax into the person who was not equipped to handle it. That’s correct. Right. When you’re in the wrong job. I have, you know, I F I have managed people that really my entire professional career, but I had to train myself to do that. I, I, you know, I was in my personality. I am a like a sniper, right? I can, I can travel alone. Right. I can. And that’s just how I’m wired. I’m a, I’m, I go into a mission fee. I, you know, I, I can get my mission done and get out alive and uh, without having a lot of assets, a lot of people around me, but I had to train myself through my college into my corporate years, how to really manage people.
Speaker 1 31:31 But it comes, some people are just naturally gifted an empathetic and uh, they inspect what they expect, but that’s not all of us know. So, but if you’re not one that can have 10 employees, you shouldn’t have that. So there are a benefit it and there’s the whole thing space. Where are you gonna put them? Right? Once you hire them, right? Then you need more office space and we’re just talking about getting more office space. Is it? We’re hunting book, but then it’s going to be more a little more expensive, right? That’s crashed. So we spend a little more so you can pay a little more payroll and then just increasing your costs. So we want more sales on top of that. So that’s where we’re getting off the topic.
Speaker 2 32:07 I’m really good at managing people who don’t need to be managed that work independently. It just comes through. You tell you, look at all the stuff that I’ve done today. I know people, folks who just, you know, that are absolutely inspired by their own job and their own projects is really good at, on time. That’s right. I’m rolling an
Speaker 1 32:24 inside joke. All right. So, um, you don’t have, so the, the advantage is you don’t have to go and hire more w two people who are, have you, you know, you have to take care of, you can access to a larger pool. I have actually, I have a website that I’ve used for special and just different things. Like if I wanted a something to convert or transcribe something or convert to a PDF or just little projects, uh, I once hire someone to help me, uh, insert some videos and a website, um, for like 30 bucks. What would it be in 150 bucks in little things like that. It’s called Upwork. Right? So it www.upwork.com O P no. Ah, up work. Oh, like up, up, up, work. And, um, it used to, it, it came out of the, the, the merger, you know, I think he lands back in a day and an old desk. And remember those two, they, they now they’re there, but they have people or talent throughout the world. So, you know, I have a, I have a client that has a, we have development in India, we have people in Canada. I mean, this thing about outsourcing,
Speaker 2 33:34 it’s here to stay. Well, we know this is a global economy. Yeah, absolutely. And, and with the advent of the technology that we have and so forth, it just is, it’s a natural piece. It’s a, it’s a, it’s a natural flow.
Speaker 1 33:48 Yeah. So we’re in a world economy, so, so what are the drawbacks? What is the problem?
Speaker 2 33:53 You ready? Are you ready? You’re ready? Go ahead and tell me the double edged sword. Yes. Whichever you attorney comes to the table trying to explain the double edged sword. Please tell me reliability and quality.
Speaker 1 34:04 Mm.
Speaker 2 34:06 How do you maintain the reliability and quality? How do you do that? Well there, the challenge for the person or the organization that you’re outsourcing to, as I mentioned before, they’re still managing their profit margin. They’re still managing their budgets, their payroll. They also have the same legit logistics to manage that we have. So then what you need to be looking for is, is outsourcing particular tasks to an organization that does just the particular task
Speaker 1 34:40 who are good at one thing. Right. Okay. Wanna throw this your way. Um, a few years ago I was doing research on outsourcing. I came across this law firm, I forget the name it was, I’m not, I w I wouldn’t say it anyway in Miami who I was looking at outsourcing nearshore so it wasn’t, it wasn’t really, you know, across the world they was in central America. So it was looking, cause I mean I’m from a central America and I was kind of looking at my own in her own backyard to, you know, a two hour flight from Miami. Right. And then I found this law firm, that big, big size law firm that was outsourcing all of the research.
Speaker 2 35:14 absolutely. That’s very common. It’s very common. Very common, but I’ll tell you what, you better hope that they’re right. Because in our world, we completely rely on our research resources. Everything researches, everything. It’s like the backbone of what you do, right? I think, and some people are very, very good at it and some people are not so good at it. Some people get kind of wrapped around the axle and they get caught up in it, you know, hours and hours go by and they haven’t narrowed down and zoomed into the issue. Whereas some people, um, are very good at getting to the point, finding the cases, finding the statute and having it be right. Right on point.
Speaker 1 35:51 But what if, what if he works even if he was working, if you look up his works, how much will you have to pay somebody in the U S to do research?
Speaker 2 35:58 Oh, per hour. Oh, if you want somebody good. Probably 30,
Speaker 1 36:04 30 bucks an hour. Yeah. Okay. 20 to 30. That’s 60 K a year at 2000 hours. Yeah.
Speaker 2 36:11 Well. And the reality is is do you have that many hours of research too to give to somebody to justify the position?
Speaker 1 36:16 But, but, but if you did let’s say, but that would be dead versus paying someone who is just as good and maybe a subject level expert because that’s the only thing that they do. Right. And in some other countries now the 10 99 plays a role. If there’s somebody who’s outside of the U S no, I don’t think it’s only for the U S right. So you’re beyond that anyway. So what I want you to think about as a business owner is starting to think about which areas of your business does it make sense to you to save some money, get the same stuff done even better. Right? But getting it for a cheaper process. Stay tuned. You are listening to business and legal talk with Leo Glodean we’ll be right back.
Speaker 0 36:57
Speaker 3 37:10
Speaker 1 37:22 yes, you are in the right place. You are listening to business illegal talk with Ian Claudine. So how we learn anything today.
Speaker 2 37:32 Yeah, absolutely. I mean outsourcing is something that we should always be monitoring any and gaging a, at what point do we have enough of this particular type of work? Um, oftentimes the outsourcing comes when you have a consistent flow of a certain type of work. Say for example, in our industry it’s research. We have a certain need for research, but it’s not something that we have a full time position for. And you know, then the consideration is, is not just cost, you know, not just can I, if I outsource it, can I shave a few dollars off of it? Because there are advantages to having that person within your office or your organization because then you control them. You, you can control the work quality. Um, so there’s a lot of, there’s a lot of reasons to not outsource it until you need to, but oftentimes when you need to is when you have like 80% instead of full time for that amount of work. If that makes sense. So in world, could I, could I employ a full time researcher? Probably not. If I had 10 associates, I could probably justify. It would justify a full time researcher. So until then we use outsource.
Speaker 1 38:52 Okay, so let’s bring it back to you know, because you know you have a law firm and I have an accounting firms, so it’s an entirely different business model. And chances are our listeners, unless they are lawyers or accountants there, they may have a different business. So what does that mean to you? Driving around right now, owning a business, whether it is a plumbing business, you’re electrical contractor or you have a bakery, you have a restaurant, a marketing agency, um, logistics or ag, whatever your business is, whatever you are in business, I guarantee you that there are areas of your business that you can, you need to think twice. If you’re looking at your financials, you should know what your staffing is as a percentage of sales.
Speaker 2 39:35 Well, you and I did a seminar last week in Fresno and I, one of the, one of the things that you brought up during your segment, which I think is really, really key. And I’m not another stainless plug. No, no, no. And I don’t know that we’ve actually talked about it on the show is knowing the value of your time every, Oh yes. Knowing the value of your hours. So if, if you, you should know what your time is worth on an hourly basis and you should be able to calculate the formula, deconstruct it backwards, you know, how much are we bringing in versus how many hours did I spend doing it? Therefore my, you know, hourly value, um, isX , Y, Z. And I think when you start looking at it from that perspective and you start to consider, is it really worth my time for me to be running the vacuum around the office and emptying garbage cans even though it needs to be done?
Speaker 2 40:29 And yes, I can do it. Is it really the best use of my time? And I think that’s another way that if you’re in a business owner and you’re out there thinking about it, what can I outsource that will allow me to focus my time because my time is worth this year and I can perhaps outsource something else that perhaps I’m not really that good at or maybe I’m okay at it, but I can get somebody who’s really good, really efficient. Um, in my world, for example, apparel, the work that a really good paralegal does or a strong paralegal, they do stuff that is completely different than what I do. I absolutely rely on my paralegals. Um, and my senior paralegal is phenomenal. She, she’s just phenomenal. She, she’s just amazing. She’s efficient, she gets it done, she gets it done right and gets it done on time.
Speaker 2 41:19 So that is something that I would outsource if I had the ability to. Obviously, you know, for reasons that we’ve discussed here, that’s not something I can, I can outsource. But that’s when outsource it for me is when I start to look at what is, what is the best use of my time. Now as a business owner, there are things in various businesses that you can say to yourself, you know what, I’m the one who has been doing all the repair on the equipment for the last five years. I’ve been repairing, doing the equipment repair on the tractors that we use to farm and bring in the harvest. I do the equipment on the vehicles because it’s something that I can do. And I, and in your mind you feel like you’re saving a few dollars by doing it yourself, but you, you haven’t run that calculation, which is, where is my time best spent? So should I make a relationship with a really good mechanic that maybe is willing to come out to my ranch and do repairs right twice a month or do the maintenance on the, the ranch vehicles and so forth. So I think that that’s something that as business owners, we have a tendency to look at it. If I do that, I’m saving a dollar. And I think there comes a point that we get caught in that
Speaker 1 42:35 false logic. Well, um, it was because it’s flawed, right? I, I know what my time per hour is. And so I’m keenly aware of that because I, I’m very much into metrics and naturally, but in our businesses are billed by time. Correct. So, so for, in some ways it’s easier for us, for you and me, but if you have a business, the first thing that I would do, and here’s, here’s what we get into the practicals, right? Really, what is, what will you consider your hourly? What is your time worth paint? I mean, if you’re trading hours for dollars, what is that amount? Are you paying yourself $100,000 a year? Are you paying yourself 50 whatever that is. You know, if you’re paying yourself 50 you’re averaging $25 an hour and you have to pay yourself 150 bucks an hour. If you come across a job on your desk, do it now, is that worth $50 an hour if you pay yourself that, if not, delegate it, right?
Speaker 1 43:31 Whether it’s somebody in your staff or elsewhere, right? Because your time is, should be working on the business. If you’re a business owner now working in the business. So where do you go? Right? So you were talking on the break, where do you go if you want to find people? Well, well, if you own a business and that are areas of your business that you have earmarked, you should be, that are areas that you should be looking at portions of your sales, right? Ways to create lead generation, uh, your marketing. Um, it could be your accounting. Hey, speaking of accounting, you know, I get calls and emails, you know, if you have a question, I mean, we are very, in our firm, we’re very lenient with the knowledge that we give and you know, and it go to Greenland, hq.com www.greenlandhq.com send us an email, give us a call if you have a quick question.
Speaker 1 44:23 I mean, I’ll be happy. I, if you, if you talk to me in that, you’re able to, you know, talk to me or someone in our staff and because that advice you get to make $10,000 that good for you. Right? But you don’t, I don’t want it to feel like you have to have all the answers. We love where we’re, we teach on the subject, we give time away by teaching this subject because we want more people to be equipped. And then you realize, Hey, I really like what you say or did do more. Then we can talk about it. Right. Don’t feel compelled to go to Greenland, hq.com and where should we find you?
Speaker 2 44:54 [email protected] and that’s S H E R R O n-law.com.
Speaker 1 45:02 Hey, here’s something, an endorsement for you. Now I have referred to law firms for years and years and years and I have given uh, leads or you know, basically, Hey, here’s somebody I need you to talk to you because they want you, they want a decision from, you know, as a legal matter. Right. And they don’t hear from the, the for days. You guys are super responsive, so thank you very much.
Speaker 2 45:28 Oh, absolutely. We try to be, we try to be, you know, we dropped the ball every now and then. Anybody who’s out there who’s listening, who’s apologize the way to the day and waited a day or two to get a phone call back with a no, you’re always on our mind. A, there’s just only so many hours in a day.
Speaker 1 45:44 So thank you. All right, so we’re going to start wrapping it up. So where do you go? I think one website I go to, I mean all you need to do is go to your search bar, you know, whether it is being or Google or Yahoo, whatever, and just type outsourcing. And then you’re going to come up with a dozen list. I’m sure if you did that right now you’re gonna come up with that or you life on the internet right now? Yes. Can you just do outsourcing and you know, Google and see what comes up, you know, because the, there’s ways you can go. I mean, you, their specialty type websites, if you’re looking for different niches. Now there are some for accounting, there are some that are for blue collar, white collar, there are project-based. Um, there are multitude of words that you should just take your time. And, and don’t be afraid to try things.
Speaker 2 46:29 Absolutely. And, and also from a, uh, just a practical standpoint, you may not have to even go to the internet once you assess what it is that you think. If, if you’ve, we’re not doing that one task or you know, going back to the example of, you know, the, the farmer who repairs his own equipment. If you really have to get past that fallacy in logic that if I do it myself, then I saved the money because there comes a point in time where you’re doing everything yourself and your time is super valuable. You just don’t realize it. Um, you may be able to reach out to somebody, another business within the community. Um, there may be somebody already ready, willing and able to help you out. Um, for example, marketing, you know, that’s something that’s really obvious and easy. We can outsource that because a lot of it, um, you know, is, is specialty education or specialty experience. Um, but don’t hesitate to reach out the community
Speaker 1 47:30 right here. There’s a lot of ways you can solve your, your problem. You know, here’s an easy one. You know, if you use social media, I mean, I use Facebook, right? Um, I’ve seen this thing, recommendations, you know, Hey, I’m looking for somebody doing X. Can you recommend anybody? Right? You’d be surprised how many people chime in, as I say, call so and so I think people do business with people who they know, like, and trust, right? Correct. And if somebody comes referred to your point from somebody, you know, in your sphere of influence, chances are you’re going to want to talk to the person because it’s highly vetted by somebody else, right? So your solution may not be core to do a blind search, but start with what you know. But the thing is, you have to understand that you can’t just keep throwing. I tell business owners all the time, you can’t just keep throwing people at the problem. Correct? Let me always, sales are down. Let me hire more people. Uh, this is down. Let’s buy more equipment. Or you know, let’s, let’s just throw more dollars in people at it. You got to think about your strategy. First. You’ll need to understand your numbers, then you can figure out if outsourcing is the thing too for you and chances are if you play your cards right, it will.
Speaker 2 48:40 Right. And you know, another, another benefit that just occurred to me as you’re talking is that’s an opportunity for other people to start their own businesses as well. Um, I have a couple of clients, one of them, um, really great guide, never intended to start a business, had absolutely never intended to. Um, he manufactured a high pressure hose for a company. Uh, a friend of his that worked for a big winery. Um, they had a hose go. They were trying to get it made. They couldn’t get it made quick quickly enough. He happened to have um, the equipment and they sent him this hose and said, Hey, can you make a high pressure hose for us? He did. Next thing you know, he’s getting all of their work because they decided why try to do this in house. And he is now got a very successful business doing one thing and one thing only really making high pressure hoses. Wow. And it’s just a hose and it’s a crimper and it’s putting, putting the, the, uh, ends on him hydraulic hose.
Speaker 1 49:43 You just never know what opportunity may come. So you’ve gotta be open to it.
Speaker 2 49:47 I’ve got another card, another client, great, great guy cleaning solar panels, having a fantastic business around. Fantastic. Installing them. No, he, but he got a referral for somebody said, Hey, do you think you could do this? And he said, yeah, I can do that. And the next thing you know, off we went. So it is outsourcing is kind of the, the cycle of life.
Speaker 1 50:08 Well, Hey, thank you so much. We could go on and on and on, but we’re grateful for tuning in every Saturday here, a power talk, 1360, that you have been listening to business and legal talk with Leah, Claudia, and stay tuned. We’ve got more gray shows coming next week. Have a great week. Everybody.