The Web Developers Field Guide to Outsourcing
By Peter Ferrigan Admin@...


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What is Outsourcing?
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Whenever you hire someone or a group of people that are outside of
your business to handle business functions. This can include,
auditing, payroll data entry and work in Information Technology.

Outsourcing is essentially hiring a contract employee for your
business. While the concept can be used for businesses and projects of
any size the work involved is about the same. You will still need to
manage your work and employees, answer questions, make sure that work
is completed on time and within budget. This guide will explain how to
do all of this. In the next section you will learn about the benefits
of outsourcing your development work and what this means for your
bottom line.

Not currently spending anything on web development? Doing it all
yourself? Hi, my name is Peter Ferrigan and this was me 3 years ago. I
used to do the same thing until I realized that my job was to smoothly
run successful websites and build new online ventures. You can look at
the passion for new business or the pure number value. Either way
there are larger things that you could be accomplishing with your
time. How much is one hour of your time worth? If you are currently
working for someone else, the number is easy to place. If you are self
employed, it gets a bit harder.

Starting out as a programmer, when my work load increased and I was
self-employed I naturally assumed that I would continue doing what I
was best at, programming. The change from programmer to Project
Manager happened when I started to put a number value on my time. One
hour of solid coding, how much could I charge for this? As the work
increased and my life got busier things started being measured in
smaller amounts of time. Instead of basing my pay on the entire
project, I began to look at how many hours it would take to complete
and then my average pay per hour.


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Developer Fantasy Land
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Let's say you take a small job that will take you an hour to complete.
For this work, your client, or boss pays you $40. So your wage per
hour is $40. This is of course assuming that you have an unlimited
amount of clients or a rock solid job, which is why these figures are
used as just an example. So you are currently making $40 an hour at a
rock solid job or self employed with a waiting list of wealthy
clients. Life is good. You set $40 per hour as the cost for 60 minutes
of your time.

Change your perspective just a little bit and you can see that there
is lost opportunity. I read once that when investing in real estate
you should avoid all contact with a hammer, paint and nails. Why? Your
job should be a professional check writer, because time spent
hammering or painting is time lost doing something more profitable.
Actions such as looking for another house to purchase.

Regardless of your current title, I am sure you know there are larger
opportunities in your field. Most of the time these opportunities are
lost because you are too busy focused on mundane details rather then
the bigger picture of what you could be achieving. Included below is
an example of how outsourcing can benefit you.


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Outsourcing for Increased Profit and Productivity
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Back to developer fantasy land, you're making $40 an hour. What if you
could find someone to do the same work for $5 an hour? What if they
were available 24/7 and could work while you were asleep? How much
would your time be worth then?

If you could find someone to do the same work for $5 and you were
charging $40. You would make $35 an hour right? That's the common
assumption for the starting Project Manager (your new title).

How much time would it take you to find the programmer, explain the
project and check the work. Usually from my experience (for a one hour
job) only about 10 minutes. So what is your total pay? $35 for ten
minutes of work. We are still in fantasy land, so after you have hired
someone for $5 to complete your $40 job you go to the next client on
your list.

Another $40 project appears, you spend $5 and 10 minutes. This keeps
going on 6 times. So in one hour you have made $210 ($35 X 6) as
opposed to your previous $40 an hour.

You have just given yourself a 525% percent raise.

One thing to remember is that we are in outsourcing fantasy land where
each programmer does exactly the right work; it is always completed on
time and to your exact specifications. This of course does not happen
all of the time. You will have some programmers cancel, others not
respond and some might complete the work incorrectly. If you leave 20
min out of each hour to review and handle these issues, you are still
making $140 / hour, 350% raise.

The best part is that outsourcing not only allows you to be more
productive and profitable while you work, it also provides these
benefits in the time your off work.

Let's say you work just 8 hours a day, and no more (in fantasy land).
This means that you are unproductive (on work issues) for 16 hours of
every day. These 16 hours can start making you money. Let's take a
look at the numbers:

Stated before the average project that takes only 1 hour of your time
can be done for $5 and 10 minutes leaving 20 minutes of every hour for
exceptions. As you will be planning ahead for the next 16 hours this
will take some additional time to prepare the work. Let's give each
project an additional 5 minutes to setup. This means each project
takes 20 minutes: 10 to find explain and check work. 5 to plan ahead
and 5 to cover mistakes. These 20 minutes are split between when you
leave work and arrive the next day. We are going to outsource just 6
projects, which means this will take just one hour before you leave
work and one hour when you arrive in the morning the next day.

Taking a wage of $35 per project this translates into $210 for 6
projects outsourced while you sleep. After this we need to deduct the
$80 of time spent (2 hours) preparing the work and your total profit
each night is $130. Over a year (without holidays) this is a $30,000
raise.

Of course the above example is just an example. I wish it were as easy
as breaking down projects into 15 minute segments, and each segment
only took 15 minutes. Also it's important to note that no one is a
machine. Unfortunately as your work increases, so does the number of
people you need to manage. Without a reliable management structure in
place this would also increase the number of delays and chance of
error. Then there is the waiting list of wealthy clients, which for
most developers, doesn't exist.

So if you could be making $210 an hour during the day, and right now
you are only making $40, not outsourcing is actually costing you $170
an hour of lost potential.


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Outsource Today's Work
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The best way to start is to join a freelancer marketplace such as
ContractList.com. These websites are broken into two sections; one for
Project Managers (that's you) and the other for Freelancers; this
includes people who are skilled in programming, design, writing and
other talents.

As a Project Manager on ContractList.com outsourcing your development
work is broken into four steps: Signup, Post Your Work, Select a
Freelancer, Payment and Feedback. Below you find a description of each
step followed by the relevant link to complete this action.


Signup :: The first thing you will need to do is to signup at
ContractList.com as Project Manager. This allows you to post projects,
accept freelancers and make payments online.

After filling out the short signup page, a letter will be sent to the
email address that you submitted. This is done to confirm that your
address is valid and you are able to receive important announcements
pertaining to your projects. http://www.contractlist.com/wm.php?a=signup


Post Your Work :: After signup, gather the project details together
and login into your account. After login you will be taken to the
Account Management page. Here you can see the information relevant to
your account. To post a project, click the link `Create Project' at
the top of the page. You will need to fill in the Title, Project Type
and description of the work that you would like to be completed. Later
in the guide I will explain how setting the right budget lowers your
cost, and which details to include ensuring you get the most qualified
bids. http://www.contractlist.com/wm.php?a=create


Select a Freelancer :: ContractList.com is setup in a way that allows
Freelancers to openly compete for your business. This known as a
reverse auction, where competition actually lowers the bids instead of
increasing them. Each Freelancer will be able to submit a bid (the
cost for the posted work to be completed) and a time frame for the
delivery of completed work. As there are hundreds of Freelancers on
ContractList.com your project will receive multiple bids from people
around the world eager to complete this work for you. Go through each
Freelancer's bid and select the person that you feel is best suited
for the work.

Payment and Feedback :: After the project is complete you will then
need to log into your account to submit payment and feedback about the
Freelancer that you worked with. ContractList.com creates online
accounts for both Project Managers and Freelancers, which are used for
transferring funds related to work completed. As a Project Manager
there are several ways in which you can add money to your account:
Checks, Money Orders, Bank Transfers, PayPal.com, Authorize.net,
2checkout.com, eGold.com, StormPay.com, YowCow.com are all supported.
Once the funds are placed in your account, you will then need to
transfer funds to the Freelancer you worked with. These channels are
also used for Freelancers withdrawing funds so you don't have to worry
about how to send payment to a Freelancer in a different country.

Leaving feedback is a valuable way for you to record your experience
with this particular person. When doing so, it is important for you to
include comments about their skills, communication and working in the
time deadline. This information is then used for other Project
Managers considering them for work.
http://www.contractlist.com/index.php?a=account


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Completing Projects Faster, Accurately and Cheaper
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In this section of the guide you will find practical things that you
can do to ensure that you project gets started smoothly, progresses
quickly and finishes on time.

Detailed Description :: Include a detailed description of the work
needed. Each word you add to your description saves you money. By
spelling out the work required for the project you do not leave this
up to the freelancer to figure out. A clear concise description will
save you money on each project.

Place your website address in the description. It always helps, and
saves money to give a live example of the website you are referring
to. If you are not comfortable placing your website, place one that is
similar. Or if you do not have a website created, give a detailed
description of the work that you would like done and give a few
example websites, highlighting the features you would like to include.

Use Escrow :: ContractList.com employs an escrow system which allows
you to place funds in a neutral account and release them once the
project is complete. It is recommended that you use this system for
each transaction, the reason being is that it gives each person 50%
control over the money. Only you can complete the payment into the
freelancers account and only the other Freelancer can release the
funds back to you. Disagreements do occur and the best way that we can
help you as a Project Manager is if the funds are placed in escrow. A
good policy is to make your payment into escrow for the freelancer
when you select his/her bid. This shows that you do have the money and
it is committed to the project. Once the work is complete you simply
complete the transfer into their account.

Post a Budget :: The worst mistake you can make is not included a
budget at all. This outright says to people bidding on your project
that you are clueless about the work required and money is no object
in the completion of this work.

Post the Right Budget :: I half-jokingly suggest to anyone that brings
this up that they should place a max budget of $10 for each project.
By placing a $10 maximum you eliminate the idea that the Freelancer
will be able to over charge you for this work. Instead you place them
in the state of mind of "How can I win this contract for the least
amount possible?" Obviously the $10 trick will not work for every
project however if you are not sure how much your work will cost then
put a $10 maximum.

Avoid Attachments :: Including an attachment in your project
description, i.e. "please see the included file for complete details".
I have seen it time and again. Projects with attachments that are
included in the description receive less bids and higher estimates.
The reason is that there is an automatic assumption that if the
description is to complex to be laid out in plain text, then the work
involved must be equally as complicated.

Delay the NDA :: Personally I feel that NDAs are over used. If you
feel that your project and work absolutely requires this level of
secrecy then include this requirement down the road after you found a
few good candidates for completing your work. By saying in your
description that you require an NDA to be signed by all freelancers
scares off a majority of potential candidates. A solution would be to
put in the general description of the work you need done. Such as the
type of website you would like to create or the specific steps
involved. Once you have a list of qualified freelancers talk to them
each individually about signing your NDA.

Don't Modify the Posted Description :: Some people post a project and
then the next day make a change to the description. After answering
some questions and thinking about the work a little more, then make
another change and another. This leads to inaccurate bids,
uninterested freelancers and a very bad start to your work.

The best thing to do is before you place a project, write down every
thing that about the work that you can think of. Include what you
would like to end up with, what you have now, examples of similar work
and your estimate of the work required. If you have started a project
and need to make a change, the best thing to do is to rewrite a new
project description and post it again. On ContractList.com there is no
charge for posting projects and this simple action can save you a lot
of time and stress.

Once the new project is posted, go back to the old one and invite each
programmer to bid on your new project. This will give you clear and
accurate bids to ensure that you pay exactly what the work requires.

Open Communication :: Issues in development can start out small and
grow quickly you do not catch them early enough. For this reason it is
crucial to keep open communication with all of the people you are
working with. One idea is to create series of events according to the
project deadline. Short deadline projects are relatively easy to manage.

For projects extending over 5 days, I have found it helpful to work
out a list steps to measure progress. These include the dates for the
first mockup, when revisions will be completed and the final deadline.
Having a series of smaller deadlines breaks down a large project into
smaller, easier to manage pieces. Having and sticking to your smaller
deadlines consistently reminds the Freelancer that completing the work
on time is very important to you.

Use MSN :: By far the most popular communication tool when doing
business online. MSN Messenger allows you to instantly connect with
the people you are working with to hammer out details and check on
progress. After you have accepted a freelancer to work on your
project, immediately send him your MSN address and ask the following
questions:
Do you have any additional questions about the requirements?
What do you need from me to get started?
How much longer are you available to work today?
Consistently check in and make sure you are available to answer
questions. Once in a while ask "How is your work coming?" "When will a
mockup be available?" "Do you have the demo ready?"


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Additional Help
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You now have all of the tools that you need to get started. Each step
has been covered from posting your project to leaving feedback. We
have also gone over some advanced topics that will help ensure your
work is completed on time and to your satisfaction. You are ready to
start outsourcing today.

If you have any questions about how to post your project, or the best
way to word your description I would like to help you get started.
Please send me an email via the Contact Form on ContractList.com and I
am happy to review your project and help you get started.

Also if you are not sure how much you should expect to pay, just send
me an email and I will get back to you shortly.
http://www.contractlist.com/index.php?a=contactus

I look forward to hearing from you and I hope that you have found this
guide helpful and informative.

Please let me know if you have any questions or concerns.

Thank you,
Peter Ferrigan
ContractList.com
Admin@...


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Author Information
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Peter Ferrigan is the Administrator of the popular Freelance
Marketplace Contractlist.com http://www.ContractList.com. He can be
reached with questions or concerns by sending an email to
Admin@....