How to Do a Simple ROI (Return On Investment) Assessment BEFORE You Outsource Any Task
With my current team already busy with various monthly tasks + projects, I’ve been searching for my next hire – someone to assist me in posting content across my social media platforms. Unfortunately, I haven’t yet found the right person.
Actually…that’s not completely true.
I’ve been in touch with some amazing women who would totally rock the job and make my platforms shine – but I turned them all down…
Not because I didn’t like them.
Not because I didn’t like their quote.
But because my ROI (return on investment) told me it wasn’t a good fit.
So as much as I want to say “screw it” and hire one of those awesome women anyway just to get this task off my plate, it wouldn’t be a smart move.
Now, you already know that one of my top business investments is outsourcing. But on the flip side, I also don’t spend money in this area of my business frivolously – and you shouldn’t either.
Which is why I’m going to share my simple ROI assessment that you can do BEFORE you outsource any task in your business.
So first up…
How to figure out if paying someone to do a task in your business is actually worth it
First, let me be clear – this particular ROI assessment is specifically for outsourcing tasks like social media, paid ads management, email marketing, podcasting, etc., and not for hiring an assistant – I’ll go into that next week in part 2 of this blog post.
Secondly, you have to be doing some kind of tracking in your business already. If you’re not, why? If you don’t know how your clients are finding you, and how much those clients are earning you from those places – then you’ll have no idea what’s working and what’s not, so you can do more of what is.
If you are tracking, then you should have access to some kind of ROI report that you pull from your shopping cart, or whatever tool you’re using.
Now even though the ROI report is a big part of the equation, I also have to take into consideration what I feel the task is worth.
Meaning…if I’m doing the task myself, how much time is it costing me?
Obviously, I’m no newbie. I’m experienced, and I’m fast. I’m also not managing multiple clients. So I have to keep all those things in mind when I’m placing a value on a task.
Step 1: How much time is the task costing me?
In my case, when it comes to posting content to social media, it literally takes me 10 minutes to share a new blog post across all my platforms (Facebook, Google+, Pinterest, Twitter, Tumbler, Stumble, Linkedin, and sometimes Instagram) and then drop it into my JustRetweet account for additional leverage. The way I see it, an experienced contractor should have no problem doing it in the same amount of time (especially once I train them).
Plus, there are also a ton of tools available now that will do all the posting for you – like meetedgar and coschedule.
Sooo…in my mind to post 3 days a week, it looks something like this:
– Share my new blog post one day (10 minutes)
– Share one of my quote graphics another day (5 minutes – because you don’t really have to post any text with the image)
– Share one of my videos, or audios, re-post an older blog post, ask a question, etc. (10 minutes)
If I do it myself, the actual posting will take me 25 minutes a week.
But that also doesn’t take into consideration any planning time to map out what all the posts for the month will be based on what’s going on in my business, and then organizing everything into folders (images + text), and dropping them into a publishing calendar/spreadsheet.
So let’s say 2 hours max per month for that – because really, it’s only for 12 posts for the month.
Which means to do this, this task costs me about 3.5 hours per month of my time to myself.
In 3.5 hours of time, I can create a new product and make thousands of dollars. So outsourcing this task is a no-brainer for me.
BUT…on the other hand, I’m also not willing to invest $500+ per month (or pay $142.85/hr.) for an expert to do a pretty basic task for me.
Step 2: Run the numbers
Remember that ROI report I mentioned earlier?
It’s time to pull it out.
Now that I have a clear picture of how much time the task I want to outsource will take a team member, I figure I can hire an assistant for $30-$50/hr. and it will cost me $105-$175/month.
But I want to dig a little deeper and find out if I’m actually making any money from my social media platforms before I set a budget for this project.
So I reviewed my social media ROI reports for the past two years (excluding Facebook ads) – and discovered that I’ve only generated a few hundred dollars in sales from those platforms. (I was actually kind of shocked to see that even cold search engine traffic was outperforming this by $100k!)
I know that over time, with more attention + love given to my social platforms those numbers will increase dramatically. But based on what my report is telling me right now, it’s not the best place to spend my money.
So at the end of the day…I am willing to spend $175/month to start, just to see if those numbers will increase. Otherwise, I’m better off investing in other areas, like on Facebook ads, for instance.
Unfortunately, the contractors I’ve spoken with so far require a much larger investment than I’m willing to make at this time. But I’m not ready to give up. I WILL find the perfect person to manage this.
When you take the time to do both of these steps BEFORE you make a decision, you won’t end up throwing money away, and being frustrated by your results.
Run the numbers!