Effective outsourcing for Business Owners Radio
Last updated August 28, 2019
Business Owners Radio podcast
In this episode, I’m being interviewed by Craig Mohen and Shy Goulash of Business Owners Radio. I have shared critical insights on what business activities to outsource as well as the changing role of the employee. Learn how you can use outsourcing as part of your growth strategy to reduce staffing costs by up to 70% and streamline core processes throughout your business.
Derek Gallimore: Welcome to the Outsource Accelerator podcast. This is a short format podcast where we explore business and outsourcing mastery. My name is Derek Gallimore and I am really excited to bring you the leading podcast in outsourcing. Hi and welcome to another episode of the outsource accelerator podcast. My name is Derek Gallimore and this is episode number 221 so today I am being interviewed by Craig and Shy of the business owners radio podcast. This is a US podcast aim squarely at the smaller, smaller, medium size business owners and I was really excited to be able to share my experience and insights in outsourcing and how they can really benefit the small and medium size business. So, I really enjoyed this conversation and I hope you do too. If you’re on any of the show notes, then of course go to outsourceaccelerator.com/221 enjoy.
Craig & Shy: Welcome to Business Owners Radio. Business Owners Radio. We’re established business owners get the latest insights, strategies and practices to grow a sustainably profitable business and now taking care of business. Your hosts correct Craig Mohen and Shy Goulash.
Craig & Shy: Welcome to Business Owners Radio episode 125. Our guest today is Derek Gallimore, founder about Outsource Accelerator and leading outsourcing marketplace, an information resource. Derek has been involved in business since his first venture at age 17 he has been leading the industry and outsourcing for over six years and has extensive firsthand knowledge of the sector. Derek founded Outsource Accelerator in response to the growing need for an independent source of outsourcing information and education. Good Morning Derek. Welcome to business owners radio.
Derek Gallimore: Hi Thanks for having me.
Craig & Shy: It’s great to have you on board today. And Derek, I was just going through your background and it’s quite extensive and prior to outsourcing you been involved with a number of activities. One was pretty large and the property management side.
Derek Gallimore: Yeah, absolutely. Yeah, I’ve been around a bit. I’ve always been entrepreneurial. I was lucky enough to get into the tail end of the property boom in the London market when I was just 24 I built a pretty significant property investment portfolio at that point when the market called, I segwayed into property management or basically the airbnb model of service departments in central London. I bootstrapped that up to about 20 million US revenue company. So by stage kind of young thirties I was pretty successful and living a good life. I had also then outsourced a lot of my office and operational functions out to the Philippines and then it all came crashing down pretty quickly when the market got hyper, hyper competitive and margins disappeared and we would carry in an overhead of nearly one and a half million dollars per month. So I closed the business and I lost a lot of my prior wealth with that or the property development wealth. And so I really experienced the whole rollercoaster experience of entrepreneurship within that decade or so.
Craig & Shy: Jack, that must’ve been really painful for you. What kind of lessons did you take from that kind of experience that informed what you’re doing today?
Derek Gallimore: Yeah, it was definitely painful. I suppose the lessons I learned was a don’t do it again and you know,
Craig & Shy: what do you mean by don’t do it again? You got back into business. So what, what’s The it part?
Derek Gallimore: Yeah, well, you know, they say you learn a lot when there’s hardship, you know, and I, I really do believe that you’d learn a hell of a lot when business is tough. If your Zuckerberg and Facebook and you’re making sort of a few hundred million a day, I think there’s a lot of cushion there in business. Whereas if you’re really up against the wall, your margins are so tight and you’re running at losses, you’ve got to make payroll. And for our company, it was a tough trading environment for probably 18 months. You really learn every kind of thing you need to to pull out all the stops to try and turn this thing around. So of course, I don’t want to have a failing company again. I don’t necessarily wear it as a badge of honor as maybe silicon valley might. I want to stay away from unsuccessful companies, but I’ve learnt a huge amount from going through that process and also what I’ve learned as well as that some industries, some businesses are maybe harder than others, so when I closed that business down, I took a step back. I took breathing room and I was able to get creative again, kind of go back to my knowledge entrepreneurial roots, but also have this experience in the back of my head so that I could start up my next journey, but also choose the path a little more selectively.
Craig & Shy: Yeah, that’s such an important point. You know how bad strategy, because so often our first business ventures are in industries that we just happened to know that we’ve developed some expertise in. We haven’t really analyzed what the dynamics are of that. You know, what the cost structure might look like, what the competition might look like. We just jump in because there’s an opportunity and we sort of already have some skills in that area, but it doesn’t mean it’s a good business to be in.
Derek Gallimore: Yeah, absolutely. I think it’s kind of a selection bias because you either maybe get into a business that your friends doing that your parents have done or maybe it’s a business that you have personal interests or skills and but it doesn’t necessarily mean that it’s the most effective businesses, the most optimal business or or necessarily the the of his business to be in. So I think as we get older and also as we have a lot of resources like the business owner’s radio and we hear a lot of other experiences and, and you know, you can take that experience instead of assess business more generally and kind of then dip your toe in and be a little more successful. Hopefully that’s the benefit of getting older. Anyway,
Craig & Shy: Derek, I know that during that time you were getting involved with outsourcing and what were your experiences for your business?
Derek Gallimore: So about two years after beginning my service department company, we had a fantastic growth, but also very quickly I realized that we needed 24/7 customer service because we hand people staying over the night. We had bookings from all over the world and I very quickly realized that customer service 24 hours was not viable if you’re having people sitting in London, man in the phone, it’s man in the email. So I looked overseas and a business friend of mine told me to consider the Philippines for outsourcing the staffing requirement I did back in 2011 with one person. Within about four years I actually went captive. I develop my own office in the Philippines and I had about 50 people sitting in the Philippines serving the London operation.
Craig & Shy: And why the Philippines?
Derek Gallimore: Well, it’s really the Swiss banking of outsourcing. I really believe that the Philippines is the primary destination for outsourcing. Basically the Philippines and India have been outsourcing the longest. I’ve been outsourcing suppliers now for about 25 years. They are, the grandfathers would be industry now India is about three times bigger in terms of the service provision, but the Philippines has the most incredible cultural alignment and it has incredible grasp of the English language. And I don’t know if you know, sitting in the US but there are very close cultural and political times between the Philippines and the US. So they’re very closely culturally aligned. And to back that up, you know, most of US big business has been outsourcing and has Philippine back officing for about the last 20 years or so. So now it’s your opportunity of the smaller medium size businesses to take up on that opportunity.
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Craig & Shy: And what types of services would a business owner be looking at for outsourcing?
Derek Gallimore: The opportunities are so broad to give people an idea. I basically say anything that is done in front of a computer can be outsourced and probably should be assessed to see whether it can be outsourced. So as you know, most things now I’m moving in front of a computer screen and so if it can be done in an office, if it can be done remotely, then those are roles that can really be considered for outsourcing. Unless it’s something obviously like a plumber or mowing grass or you know, something that’s really needed on site or that has a lot of locational geographical or cultural relevance, then probably do those things last, but literally every on the task can be outsourced or considered to be done.
Craig & Shy: What are you finding that is the biggest obstacle for business owners to actually implement that first outsourcing strategy?
Derek Gallimore: I don’t suggest do everything too quick. What I suggest is basically dip your toe in and get comfortable with the concept of outsourcing. Outsourcing is no more complicated than really just employment, so if you have staff already, then moving some staff over to an outsource model really is very, very similar. So what I suggest is start with low hanging fruit. Pick out one, maybe two roles that you think could be easily replicated in an outsourcing role. Examples of that are basic office Admin, content production for your website with maintenance, sales, prospecting, sales research, you know, these sort of backend back office jobs. Also accounting, general operations. These things can very successfully be handed over to an outsourced role. Start with one role, get comfortable with the concept of managing a person remotely and then get comfortable with the whole concept and then look to see the opportunities from there.
Craig & Shy: What kind of mistakes do you see people make, Derek, when they try to first jump into outsourcing?
Derek Gallimore: I suppose it’s a little bit polarized. People overthink it a little bit. The fruits of outsourcing are so incredible, and to me, I find that the biggest disappointment is that not more people are aware of this because I really do feel that it is the most potent tool in business today. You can save 70 80 90% of your staffing costs. So I suppose the biggest mistake is just not being aware of it and not considering it for your business once you’re involved. I think what people may be underestimate other nuances of managing a remote team. So that’s regardless of where they’re sitting and then the nuances of managing someone that is from a slightly different culture. So these aren’t major show stoppers, but there’s kind of nuances of new remote team management that just takes a little while to get to terms with.
Craig & Shy: They’re getting started with outsourcing of course is a major leap for some small businesses. But can you give me some examples of some success stories that you’ve had that might make it more visible to a new business owner?
Derek Gallimore: Yeah, absolutely. There’s endless success stories and you know, I’ve been involved in a lot of companies were outsourcing has really either turned around the company or you know, edit rocket fuel to, in companies outsourcing is not just about saving money. It’s actually the incredible opportunity that it brings with it when you have access to more abundant, cheaper resources. So one of my clients, he was in Australia, a property manager where they manage hundreds of rental properties and within this industry now there’s a huge amount of regulation. There’s a lot of paperwork. There’s the fire ranks, there’s the tendency contracts. And because of the regulation he was just being buried by the back office costs and the industry was progressively getting unviable to manage because of the sort of burden of the regulatory compliance. So he was basically beginning to close his business because it wasn’t viable.
Derek Gallimore: So after a while he actually realized there was the opportunity of outsourcing. He realized that these tasks were easily transferred over to the Philippines. These are tasks that can be easily learned and processized. And then he was able to pretty much reduce the cost of this backend processing by about 70% which meant that instead of contracting as business could actually scale his business significantly, you then scale that so much that he was in actually able to offer his backend services to other property management companies. So he not only reversed the contraction, but actually as a result of this outsourcing opportunity, he was actually able to expand his business through expansion of the business models that he applied to his business. And we see this very commonly that people gingerly explore outsourcing. They find that it’s not scary, it’s easier than they thought and they are saving so much money so it really brings with it a huge amount of opportunity where people can then try new business models, they can start to expand where previously it was relatively expensive and it’s a win win for everyone.
Craig & Shy: Terrific. That was curious and the business owner is dealing with or outsourcing support team. What types of communications takes place obviously by the Internet and so forth, but are there certain applications that allow the people who are doing the outsourcing to deal with certain databases or property management or customer relationship management? You see that there’s any dominant software pieces that are used?
Derek Gallimore: No. Yeah, this is the thing now the world is all completely connected. Every software that is used or has been born in Silicon valley as all being used across the Philippines, as you know, every software now is all cloud based and you don’t have to worry about your servers and computers. If you work in a sector specific industry, then there might be software specific that sector, like the real estate industry, you know you very often have the softwares for that hotel industry. You have those backend booking systems and the nice thing about outsourcing, and especially if you’re working with a BPO, they are very used to bringing on board any kind of systems that you need within centers that have high security concerns. So whether they’re dealing with health insurance, whether they’re dealing with medical records, you know the legal aspects, credit cards, all of these things are very commonplace to be managed in the Philippines.
Derek Gallimore: In these centers. There are some centers who have incredible security levels so that they are completely compliant with all of the US standards and to the degree that you know, it’s all remote servers so that basically the people in the Philippines are actually really just looking at a monitor that is pulling the data from US directly. So there’s nothing help locally. The extent of the technology in implementing this really is incredible. To bring it back a little bit. For the small to medium size business owners. All of your common application site does Xero Slack for communication, Asana for project management, Trello for to do lists, some of the basic CRMs and be now all of these things are readily available obviously and understood by whoever you’d be working within the Philippines.
Craig & Shy: So Derek, let’s take an example. I like your property management example and let’s say I have a property management environment and I’ve got about a thousand tenants and I want to reach out the amount of periodic basis and survey them or contact them regarding an issue. How would I get started with your organization and getting a outsourcing mode implemented?
Derek Gallimore: Yeah, absolutely. Good question and quite simply it is so, so simple. You can start tomorrow. I am a part of Outsource Accelerator. We are actually an independent platform for outsourcing. So on our website we have about 3000 articles. We list 600 BPOs in the Philippines, the top 600 BPOs, which is outsourcing suppliers in the Philippines. And basically what we’re trying to do is create an environment where people are able to find information about outsourcing. They’re able to get more comfortable with the concept of outsourcing and then we can also provide the stepping stones for them to get into outsourcing. In terms of the example that you provided, you know very quickly people can be introduced to a outsourcing supplier. That supplier, we’ll find out the needs of the role and they can recruit for that role. I would suggest within about one to maybe two weeks, you can have someone that you aren’t training up for that role and you will have the assistance of the outsourcing supplier.
Derek Gallimore: They’re helping you train up that person. In terms of the customer service role that you suggest, this is my bread and butter for the Philippines. You can get very friendly, very communicative person that is very used to the customer centric roles and those requirements that you have would be put into a process. They would be instead of master diamond suggest within about two weeks and then you can start adding more functionality. So maybe you want to start sending out Christmas cards, birthday greetings. You might want to suggest upsells so that actually you just go from doing the basics to actually over delivering and really exploring how you can then do more dynamic stuff, make more money, and really build your business.
Craig & Shy: Well. Derek, thank you so much for sharing some real insight into the outsourcing the environment and the opportunity to provides us.
Craig & Shy: Thank you for joining us today.
Derek Gallimore: Yeah, absolutely. Thank you so much. I really treasure the opportunity to get the message out there.
Craig & Shy: Derek, is there anything else you’d like to leave with our listeners? Then?
Derek Gallimore: Outsourcing really is an absolute game changer. You can save 70% on staffing costs, which allows you to add rocket fuel to your business. It really is the best kept secret in terms of small and medium size business optimization, so I encourage everyone just to look into outsourcing and for the business owners radio we have a special link which is our website, which is outsourceaccelerator.com/businessownersradio. And there you can get the outsourcing toolkit which has about four of our best articles. You also get the opportunity for three free quotes and you get 10% off your first source superstore purchase. So it’s a great little package, but basically if anyone wants to just learn about outsourcing, get familiar with outsourcing then I really do suggest just having a look at the website, outsourceaccelerator.com and there’s a wealth of information there, just getting people comfortable with the concept of outsourcing. And of course if they want to reach out to me, they can do that, which is Derek@outsourceaccelerator.com
Craig & Shy: Our guest today has been Derek Gallimore, founder of Outsource Accelerator. You can learn more about Derek along with links to his offers in our show notes at businessownersradio.com
Derek Gallimore: Okay. That was Craig and Shy of the business owners radio. If you want any of the shownotes, then go to outsourceaccelerator.com/221 and of course if you want to ask us anything, then just email us at email@example.com. See you next time.