How to Create a Budget for your Outsourced Project

Creating a Budget
Creating a Budget

You have a project you want to outsource. What is your budget for it?  Should you get it done cheap?  Or should you spend more to get it done properly the first time around?  The answer is (drum roll, please)… it depends.  First answer the following questions:

1. Do you already have an established brand presence?

If you already have a brand and an existing user base, then you have already set guidelines and expectations for the quality of your brand.  Any new projects you release under the same brand need to maintain the same quality, or your brand image will suffer. You cannot afford any bugs or slip-ups that may arise from poor workmanship.  Can the project maintain this same quality if done cheaply?

2. Do you have very clear and specific guidelines on what you are looking for?

The more clear and specific you are in your original proposal, the cheaper your project can be done for.  If you’re not too sure what you’re looking for, or expect to make several changes, then prepare to add to the final budget.

3. Can you benefit from expert advice?

If you have all the design work done already, and are just looking for someone to put it together, then that can be done for a cheaper budget.  If you are looking for someone creative to take your guidelines and turn it into something appealing, then it is worth paying for better talent.

I have two outsourcing partners that I’ve used in the past, and continue to use today.  A low cost provider in Russia and a higher priced provider in Canada.  Both can handle the same types of projects.  I use the low cost provider, when I know exactly what I want – eg. I can provide the logos, color scheme or design I’m looking for and just need them to implement it.  I use the higher cost provider when I’m not sure what the best approach for my needs would be and need advice.  I provide him with the concept I’m looking for, and he sends me mockups that I can choose from.

4. Can you start with a simpler design, then build off that?

If your project is complicated, see if you can simplify it somewhat for the first version. Then use revenue from early initial sales to reinvest back into further improvement and additional features.  I have used this approach for pretty much all my projects.  The key here is to make sure that the initial version is fully functional, and doesn’t make any promises that it can’t keep.  I.e. if you plan additional features, don’t mention them until they are functional.

Following the above guidelines should help you decide when it is worth investing more in a project, and when you can save money by getting it done cheaper.  After you have made this decision, you can then decide which company you want to outsource to.

If you have any additional advice that has worked for you in the past, do let me know.


Make Your Weakness Your Biggest Strength

Teaching Chinese
Teaching Chinese

When I started teaching Chinese, I was immediately different from competing products, because (spoiler alert) I’m not Chinese!  Who would want to learn Chinese from a non native Chinese speaker?

Instead of focusing on that as my weakness, I made it my strength.  I told potential students (truthfully) that I was just like them.  I had struggled like them to learn Chinese.  I had tried all the ways that didn’t work.  Then, since I couldn’t find what I was looking for, I created my own teaching system.  I designed it to overcome the battle that other students like me had to go through.  How would those experts out there know what we were going through?

Now of course I did have real experts to back me up.  I was in Taiwan, enrolled at a university, so I had access to native Chinese teachers.  The content was good.  But I was the one who was teaching it.  And instead of shying away from the fact that I wasn’t a native Chinese speaker, I actively promoted that as being my strength.

Is there a perceived weakness you have, that could be turned into a strength?  Is there a way to turn the tables on others, so that suddenly you’re the one on top?

Think Different. Be Different.

stand out © by zaps06

Be a contrarian.  Sometimes, the best advice is to not be like everyone else, or do what everyone else is doing.  A great line I heard once is that during a gold rush, you should be the one selling shovels, rather than digging dirt with the rest of them.

Take a look at the world’s biggest tech company – Apple.  Other companies like to cram as many features as they can into their products.  Apple prefers to keep their products simple.  Other companies compete on price point.  Apple focuses on quality, maintaining a higher price point.  The list goes on.  Apple prefers to march to the beat of their own drum, and last I checked, it hasn’t hurt them one bit.

When I built my STL Contacts app, I took a different approach to apps than other companies.  Instead of building an app that did one simple thing really well, I attempted to combine features from several apps into one.  Is this the best approach?  Time will tell.  But it’s one way to stand out.

You’re right.  I’m not like those other guys.  And here’s why that’s a good thing.

Is there anything in your industry that you can do differently from everyone else?  A different solution to a problem that people have?

Get More Sales Through Unmarketing

Here are some notes I’ve been taking from the book UnMarketing: Stop Marketing. Start Engaging.  If you are interested in purchasing this book from Amazon please use the above or below links, as I will earn a (tiny) commission.

The author, Scott Stratten, defines “Unmarketing” as “the ability to engage with your market.”  There are some great snippets of wisdom here.

“If you believe business is built on relationships, make building them your business.”

Stratten encourages entrepreneurs to be authentic.

“Focus on what you uniquely bring to the table.”

“If you are your authentic self, you have no competition.”

He describes the hierarchy of buying as having the following levels:

  1. Current satisfied customer.
  2. Referral by trusted source
  3. Current relationship but have yet to purchase
  4. Recognized expert in the field
  5. Random searches through ads
  6. Cold calls.

If you are a customer, ready to make a purchase, you are more likely to purchase from someone at the top of the list than from someone at the bottom.  The top starts with a  business that you are already satisfied with.  The bottom, least likely source, would be a cold call from a stranger you have no relationship with, who interrupts you to ask for your business.

If you are spending time and money marketing to people, it would be in your interest to start with position 4 (becoming an expert in your field), and then work your way into moving up to position 1.

Most people don’t do this however, because it takes time to become an expert.  It then takes more time to develop a relationship with your potential customer and become a trusted resource, before finally getting the sale.  So they take the shortcut.  They try to win sales from ads and cold calling that have much lower yield rates.

Are you in your business for the long haul?  If so, are your marketing efforts focused on moving up the ladder?  Or are you sitting on the sidelines, waiting for the easy kill?

How Your Site Can Transform Browsers Into Buyers

© by avlxyz

Whenever I visit a Best Buy and a salesman asks if I need help, I instinctively respond “Just looking!”.  This happens even when I could use a hand.  I then end up taking a look around on my own, picking up a few brochures, then leaving to “go home and think about it.”  I might come back.  Or I might not.

The same thing happens online day in and day out.

Websites can be passive or engaging.

  1. Passive sites (which are most sites):  You visit the site, which talks about all the great services they offer.  You are then shown pricing plans and asked to choose one.  There is a free version, but it seems quite limited.  After reading some testimonials about how great the product or service is, you decide to think about it and wander off.
  2. Engaging sites: You are drawn to the site by some great content that is being given to you for free.  You are encouraged to subscribe to get more of this content (still free).  At this point, you are not sure whether you trust the site or not, but hey, you like what you’ve seen of the content so far.  And it’s free, so what could go wrong? You sign up.  During the trial, you enjoy the content you’re receiving.  You comment on some of the material, and hear back from others in the community.  You decide that if so many others like it, then it can’t be all that bad.  So you end up signing up for it.

Is your website more like the first website or the second?  If it’s more like the first, is there anything you can do to make it more like the second?

Minimize Your Risk and Maximize Your Reward

Risk! © by junkmonkey

Starting a business of any sort is risky.  An online business should be less risky as the associated startup costs are typically lower than a conventional business.  However there is still risk involved.  So what kinds of things can you do to manage your risk?

  1. Take intelligent risks.  If you’re going to take a risk, be smart about it.  If you have a product that you’re able to sell boat loads of, then it’s smart to increase your inventory in it.  It would be less smart to increase your inventory in a new product whose success you’re not sure of yet.  Treat the process like driving a car – you can speed up on highways where it’s safe to do so.  But slow down at intersections and school zones where it’s less safe.
  2. Measure upside.  Look for risks that have limited downside versus unlimited upside.  Stay away from the opposite scenario.  Drunk driving is an example of a risk with limited upside (there are several other ways to get you home safely) versus unlimited downside (injury, loss of life, jail time, loss of reputation etc. etc. etc.).
  3. Learn from your experience.  Mistakes are going to happen.  Some will be more costly than others.  That’s a part of doing business, but make sure you learn from them so you’re not making the same mistakes repeatedly.  If you’re not getting the results you want, is there something different that you could be doing?
  4. Get creative.  Are there other ways to handle the situation that could be less risky? Can you hire interns or use volunteers, instead of hiring employees?  Can you take a red paperclip and turn it into a house?
  5. Work your way up.  Start with smaller risks.  Use the pay offs to invest back into bigger risks.  I started with a small website, learned the process and then turned it into something much bigger.  My first mobile app was also quite simple.  My latest apps are much more complex.  It wouldn’t have turned out so well if I hadn’t gone through due process.