Self-Improvement vs. Outsourcing

I just read a blog post entitled “Screw It, I’ll Learn Programming” over at Daily Blog Tips. In it, Daniel describes how he’s tired of not being able to write the code he needs for projects he wants to take on. He’s decided to learn how to code in 2010. This really made me think about my situation.

Is it better to spend the time and money to learn additional skills, or should you hone the skills you have, and outsource the rest?
I wrote in a previous post that you can’t be everyone. At some point, you have to stop taking on new tasks, and focus on the core of your business. If you are a good carpenter and a bad web designer, you should train to be a great carpenter, and pay someone to design your site. Being a good carpenter and a good web designer doesn’t do a lot to help you grow your carpentry business.


Does this logic apply to a freelancer?
Not necessarily. You have to find a way to separate yourself from the crowd. With the growth of social media, you are competing against a much bigger group. When you’re a carpenter in Toronto, chances are the carpenter in Calgary isn’t affecting your bottom line. If, however, your business doesn’t require your client to live in the same city, it can be much tougher. The important thing is that the time and money you spend learning a new skill MUST translate into the ability to either charge more for your services, or spend less on your expenses. In Daniel’s case, I think it’s a great idea for him to learn to code. If he’s constantly running into roadblocks, learning to code could really give him the skills to take his business to the next level.

How do I know if it’s worth it?
There’s a quick way to eliminate some of you from this decision. If you are used to billing out at $40/hour, and the job you’re wanting to learn can be outsourced to an expert for $20/hour, stop right now. By the time you’ve become an expert, you’ve spent so much time and money that you’ll never see a return on that investment. If that’s not the case, let’s move on.

There are a lot of ways to look at this, but I’m a numbers guy. Let’s pretend that you are a small business consultant, but you’d like to be able to offer basic web design to your clients. So, you decide to sign up to Lynda.com to learn web design. The premium subscription costs $37.50/month. Please do not stop there to calculate your costs. Let’s also say that you spend an average of 1 hour a day for the next couple months, learning Drupal, Dreamweaver, CSS, or whatever else you decide to learn. That’s 60 hours you spent. If you normally bill out your services at $30/hour, that’s up to $1800 worth of revenue-generating hours you spent, on top of the $75.00. So, after 1 month, you’ve spent $1875.00, and you now have a good basic knowledge of web design.

You will now need to make up this money at a decent mark-up, just like any product you’d buy and then resell. For a really simple calculation, let’s say you mark up your “product” by 100%. This means you need to generate an additional $3750.00 in order for this investment to make sense financially. How long this takes depends on you, and how long until you feel you’ll need to update your training to keep up. Let’s just say 6 months. If you feel like you can add an additional $625/month in revenue over the next 6 months, then this might be a good idea.

Bottom Line
Improving yourself is not just a business decision. If you really want to learn how to speak Spanish for more than just business, then go ahead. The question here is whether or not it makes sense for your business. If there are 1000 bloggers in your demographic, but only 5 are bilingual, that’s a great way to stand out, and it’s hard to outsource an understanding of a language. If you are a truck driver, improving your mechanical skills will save you more than just money if you break down in the middle of nowhere. However, choosing to add web design to your list of services doesn’t mean you have to be the one to do it. Paying someone $300 for build you a site that you can charge a client $500 for makes a lot more sense than spending the next few months learning a skill that may or may not pay off. At the end of the day, spreading yourself too thin never works out. Discover what you’re good at, find a small niche you can market to, and focus on making yourself the very best at serving that group of people. Focus your training on honing the skills you already have, and outsource the rest to the other experts who are doing the same.