The Key Outsourcing Concepts for Small Businesses
Derek Gallimore x The Small Business Surgeon Podcast
Outsource Accelerator Founder and CEO Derek Gallimore was interviewed by Samuel Smith of The Small Business Surgeon Podcast for its 222nd episode.
In this podcast, Samuel and Derek went on a deep dive into the latter’s entrepreneurial background, outsourcing in the Philippines, and discussed the best tips for new outsourcers.
Derek Gallimore’s entrepreneurial background
Before becoming the outsourcing expert he is today, Derek dabbled into several businesses.
He described himself as “an entrepreneur through and through,” adding that he has “been in business all my life.” Outsource Accelerator is actually his third company, as he “started very early, very young in property development” before moving on to hotels hospitality.
“It’s been a great ride. It’s been a brutal ride, like I have sort of felt the full highs and lows of the entrepreneurial roller coaster stuff… It’s been an incredible journey,” Derek says of the experience.
At 14, Derek started working in the local supermarket. “And then I had part time jobs, I became really interested in the gym when I was about 17.”
Interestingly, he became a national bodybuilding champion, then worked as a personal trainer at age 18.
“[I] was the youngest personal trainer in this very well-known gym brand at the time. And that taught me a lot as well about entrepreneurship, because as a personal trainer, you are a solopreneur, you’re your own business…”
Derek then moved on to property development. “I managed to save up money and buy my first property, which was about £300,000, a year after my backpacking trip across South America.
And then what ensued thereafter, in about the next sort of 9-10 years, I bought about another sort of 40 apartments, 40 houses or apartments… So yeah, that was a really interesting journey.”
Discovering offshore outsourcing
Moving forward to the financial crisis of 2008, banks “went out of business… [Banks] sold my mortgage and it became very difficult to do property development.”
While Derek thankfully didn’t lose any money, he knew that he “could no longer do this. The times with easy mortgages were gone, so I had to find something else.”
“From that, I went into service departments, which is pretty much the Airbnb model… It was about three or four years before Airbnb was even a known thing and certainly in London.
I then built a bootstrap [company] to $20 million business with about 250 central London properties.”
This business led Derek to the Philippines, and the rest is history.
“Ironically, the thing that led me into the Philippines. I realized that with hotels and hospitality, you need 24/7 sales and customer service, because [guests are] booking from different time zones, and they’re staying in your hotels.
It was too expensive to do in London. So I got an offshore team in the Philippines, and without knowing that, that’s what started this journey that I’m on today.”
Derek built a small offshore team in Manila to handle his UK business’ customer service.
“Then very quickly, I realized there was capability in the Philippines. And I then built all of the functionalities of business in the Philippines, whether it was web dev, sales, marketing, HR, accounts, or customer service – all of the logistics for the London properties were done from the Philippines.”
Derek went to the Manila office in 2014 – and he has been living here since.
The Outsource Accelerator founder recalled going to the Philippines “a freaky concept… Entrusting your business operations to someone so foreign was kind of freaky.”
Eventually, he learned about outsourcing firms, where there is a “sort of co-parenting relationship, you have the contract with them, and then they have the staff. the offices, and, almost like WeWork on steroids.
That whole industry is in the Philippines. And it’s thriving, and it’s helping businesses.”
Top tips to outsourcers
Derek is a huge advocate of outsourcing. He says, “Literally 99% of jobs across 99% of sectors can be done offshore. If you or your staff can do it in front of a computer, then it can be done offshore.
There’s really no limit. It can be the common administrative assistant, but it can also be a data scientist, a rocket scientist, an architect, an accountant… depending on if they have the right digital interface. It can literally be every single role out there.”
He also provided tips to first-time outsourcers:
Start by outsourcing simple tasks
“As a first time entrepreneur, you don’t really have the processes, you don’t have a proven track record in terms of product and sales and all those things. So there’s so much like this has to go 100% correct. Otherwise, the whole thing is blown up.
That creates a really difficult environment. Generally, if you want to outsource, you want to outsource with simple tasks – a clearly defined set of tasks that are quite narrow in terms of their scope.”
Set people up to succeed
“You need to set people up to succeed. Give them very clear instructions. Allow sufficient onboarding time.
You need to give yourself, your business, and then this new person, enough warm up time to get to know each other, get to know each other’s communication norms and things like that.
He added, “[Do not] expect a unicorn to rock it up to the moon in the first half an hour, because otherwise it will be a bit of a rough landing.”
Don’t scrimp
“In a business, it’s not about getting the cheapest person possible. You want this intersection of value and capability.”
“People come to the Philippines, virtually with the mindset of “I am gonna pay the cheapest possible.” And when these workers turn out to be unprofessional, “it’s like, what do you expect? This is a different environment. Education is a lot different.””
Derek advises, “My counter-argument is, come to the Philippines, do not go cheap, Pay as much as you can for a reasonable service… If you can save 60 to 70%, that’s amazing. Be happy with that.
Don’t try and save 80%, 85%, 90%. You can, but then you get enormously frustrated.”
Do your due diligence
“You have to do your due diligence. I would suggest that you should shoot for a BPO with at least 500 to 1,000 staff because then they have a little bit of a track record.
You want to look into the types of clients they have, whether there’s a sort of alignment to your requirements. There are a lot of different types of outsourcing, so if they’re predominantly a call center doing call center work, and you want an accountant and an architect, then that isn’t so corresponding.
Follow The Small Business Surgeon Podcast. If you’re interested in outsourcing, feel free to send an email at [email protected]
Independent
