The Smartphone Business Model

In today’s world, great small and medium-sized businesses in the start-up and growth phases operate like smartphones. Light and portable. When they need a particular expert in a certain field they download the relevant app. For example, if they need a finance department they find the best person in town to outsource it too. They don't hire full teams inhouse.

 The Smartphone Business Model as a name for this concept was coined by Ben Marris, CEO of NZ Leaders. The reason this model really resonates with me, as opposed to the traditional factory model of growing a business which is everything in-house, is that it allows you to get the level of expertise that you need to deliver the product and service to your customers, without having to pay the full hiring cost of that expertise.

 The benefits of the smartphone business model for start-ups

 ●    Lower costs and overheads

Essentially, you can hire a specialist without all the additional costs that come along with hiring those individuals internally, the ongoing overhead costs, and the need to take that capital that you're spending on that person and get a maximized return out of it. Instead, you can just hire a specialist per-job that you need them for, and you spend the amount that is reasonable to deliver that work for your client.

 ●    Higher quality products or services

When you hire a specialist for a job, you're able to achieve a lot more for your clients in whatever service that it may be. You're able to make sure that you're always delivering the highest quality product or service because you're getting the best people to deliver on all the different parts. It also allows you to deliver better quality to your client without having to charge crazy amounts to be able to afford all the crew that you need to deliver it because you're just hiring as you need.

 ●    Outsourcing to other geographic locations

Another thing when you take on the smartphone model is that the people you hire don't need to be in the same town or country as you; they can be anywhere in the world. You can go and find that person who's the best person for the right price for you to deliver your work. This makes your business portable, your business can go anywhere now, you are your business, it can walk around wherever it wants to go, and then as you need things, you can just go on to the phone, download what you need, and apply it to the business. That’s what really resonated with me when I first heard about the smartphone business model concept.

 ●    The ability to flex up and down as business demands

One of the beauties of outsourcing is that it can flex up and down as your business demands. If you don't have as much prospecting to do one week, you're able to pick up some of that slack yourself and save some costs there. Or you might have some additional profit that you can spend on people doing some of your work so that you can maybe go network, or maybe go and create some content, or whatever it might be that you need - Work on your business, not in it. Not having that time is always such a common problem for business owners so it's a way of overcoming that.

 But I’ll have to give up control and let go! The risk vs reward...

Many business owners find it hard letting go of control, not knowing what they don't know or how to manage people from afar. They’re often too scared to take risks on letting people outside of their business give things a go. The truth is you may be losing some money on trialling that outsourcing person.

For instance, if you're trying to produce content, and you're outsourcing it to someone for $500, they might come back with a whole bunch of crap content. That was a waste of money, because you're not going to use it, and now you have to go find someone else.

BUT for that $500, they also could come back with all this amazing content which actually, if you had hired that person in-house, it might be $5,000 a month. Humans are more loss averse than gains seeking. Most of the time, they’d rather not lose $500 than have the potential to gain $4500 which is what stops a lot of people from outsourcing.

 A good leader doesn’t let outsourcing make their people redundant.

Will outsourcing parts of your processes to specialists make your in-house staff redundant? Short answer? Yes, it will. But the long answer is - not if you're a good leader.

If you're a good leader, you can start developing them into a generalist strategist, or putting them in sales or marketing, or whatever they can do to help grow your business in a real high-level way. Give them the time that they need to build their expertise and their knowledge so they can affect more outcomes for your business. You can then produce more for clients, deliver a better service, potentially take on more clients.

 Here’s how you can start applying the smartphone model in your business...

1.Map out your processes

You’re probably sick of hearing me say this, but as I’ve said in previous articles, the first thing is always pulling apart your business processes and understanding what it is you actually do. Everything has a process. Make sure you know exactly what happens in each process. Break it down to the minute details.

 Related: Why SME’s should be collecting data just like the big boys!

2.Review what can (and can’t) be outsourced in your processes

Next, ask yourself, and your team, honestly - Do we have to do every one of those parts? Is that essential that we do it? Or should we outsource it? Should I find someone cheaper than you at $30-40 an hour? Then, if you can and should, ask yourselves - What does that system look like to be able to have that seamless integration between you and your outsourcing team?

3.Have some faith in people; let go and give over the control

Once you've identified the parts in your process you can outsource, and what that looks like, the last part is just to have some faith in people. You’ve got to be okay with getting it wrong a few times before you get it right. When it comes to people's businesses, they hate making mistakes so they can really struggle to let go and give people control of what they’re the best at.

 Read this carefully - my biggest learning will save you time, effort, and money

My biggest learning from outsourcing over the last 15-16 months was understanding that that person you're outsourcing actually does this for a living, they probably know better than you, so just ask them for some help. Ask them to tell you the process of what they're going to do. Give them an idea of what you want but then ask them to tell you the process and let them manage that process instead of telling them how to do it or retaining the control. If you’re paying them to do it, release that control over to them. If there is one piece I want you to take away from this article, it is this. It’s the piece most business owners miss and so outsourcing doesn’t work and they go back to hiring internally.

 A final note - every single mistake can be fixed.

If you're fast enough to act, and you're okay to have that tough conversation with the customer you screwed up with, every single mistake can be fixed. Yes, tough conversations suck but we all have to have them at some point in life.

If it’s the risk you have to take for the reward of being able to scale faster, deliver better products for your customers, and earn more money with less effort so you can have a better life, then I mean that's a risk I'm willing to take - are you?

What has your experience been with outsourcing work in your business to specialists?

?Tell us your story in the comments or send me a DM!