5 outsourcing mistakes that have cost me over $10,000

by Liam Martin
outsourcing mistakes

Self-inflicted wounds. That’s what cost me over $10,000 in outsourcing mistakes.

I used to blame the person I hired, which was the easy way out. I plowed through freelancers and outsourced talent, thinking that if only I can find someone “good”, then all of my troubles would be gone.

But the truth is, the problem wasn’t in the talent I was hiring. It was that my hiring process was completely flawed.

I used to think that all I needed to do was simply place an ad on Craigslist, and pick someone who meets your credentials. And that line of thinking cost me a lot of money when I was just getting started.

Here are five of the most critical mistakes that I made when I first started outsourcing.

No vetting process

Until you’ve worked with someone, you won’t know how well you’re going to work together. It’s a problem that every business has, no matter if you’re a solopreneur or a fortune 500 company.

I did what any small business owner would do. I carefully studied portfolios and resumes. I conducted thorough interviews. But it still wasn’t enough.

Looking back, I realize that I’m not an expert in the skillset that I was trying to hire. So I didn’t know what questions to ask in the interview process.

And I underestimated the chemistry required for a successful relationship between me and the outsourced worker.

To combat these two problems, I needed a simple vetting process.

After I conducted the interview with a qualified candidate, I gave them a small job to complete just to get a sense for how they worked and whether they could perform the tasks that I needed them to complete. While this cost me more money up front, it saved me a lot of time and money on the back end because projects were completed on time, and to my specifications with minimal tweaks and modifications.

Unclear expectations

Never, under any circumstances leave anything up to interpretation. More often than not, you’ll end up being disappointed.

Two instances come to mind when I reflect on this mistake.

First, there was the time I let a designer use his “creative license” in creating a logo. I don’t have a lick of design talent, so I gave him the freedom to create whatever he wanted.

That was a big mistake.

He created 3 designs and I hated every single one of them, which meant that I would have to pay extra for the modifications.

Instead of giving him the freedom to create something from his vision, I should have sent him pictures of 10 logos that I really liked and explained what I liked about them.

The second instance where I left something up to interpretation is when I failed to set a deadline. The developer told me that a particular job wouldn’t take long.

Instead of nailing down an exact date for the deliverable, I said “just get it to me as soon as you can”. Three weeks later, and I still didn’t have it.

What a waste of time.

Use graphics whenever possible

A picture is worth a thousand words, especially if you’re looking to outsource your work.

These days, there are a number of tools that you can use to represent what you’re trying to do using pictures and videos. For instance:

  • Skitch: From the makers of Evernote, Skitch is an app that enables you to easily take a screen shot and manipulate it with annotations, arrows, and even create your own quick sketches.
  • Balsamiq: If you’re looking to create a software of any kind, Balsamiq will enable you to wireframe the individual screens for your software. You can hyperlink to simulate how you want the app to function.
  • Screencast: You may need to create a video in order to give more explanation to your image. Screencast is the perfect tool to help you create free videos of under 5 minutes.

By taking the time to draw/sketch/record your ideas instead using text to describe them, you’ll be able to clearly articulate what you want your freelancer to do.

Cutting costs

Small business owners are often faced with a limited budget. And finding deals and bargain hunting can become a way of life.

I’m all for finding competitive prices when I look for freelancers. But when you’re outsourcing your work, many times you get what you pay for.

The key is knowing where you can cut costs, and where you need to find the best possible talent.

As a software entrepreneur, technology is critical to the success of my business. Not just the app itself, but also the delivery of the app, the servers on which the app is hosted, the website where we do our marketing are all dependent on engineers.

Therefore, when I’m looking to find a freelance developer, I’m going to find the absolute best that I can afford. Because if I cut costs and find a cheap engineer who can’t fully perform the tasks that I need him to, then I put the most critical part of my business at risk.

However, other tasks like logo design could be areas where you can cut costs as a small business owner. The now famous Google logo was designed by using the free graphics program Gimp. And the Nike Swoosh was designed by a graphic design student from Portland State University.

Neither design was overly expensive, yet each company was able to grow into corporate giants.

Determining where you can cut costs will enable you to stretch your outsourcing budget without putting critical areas of your business at risk.

Poor communication

Three of the mistakes that I’ve listed above can be directly traced back to poor communication.

Not vetting the candidate properly, giving unclear expectations, not using visuals, are all symptoms of not communicating my vision for the project correctly.

And if you do heed these three warnings, no doubt you’ll have much more success outsourcing your work to a freelancer. You’ll save yourself time and money. No doubt your most precious resources.

However, I want to give you one more bit of advice with regards to communication: Request that your freelancer checks in with you daily, especially for long term projects.

I know it can seem a bit overwhelming, but it doesn’t have to be that complicated.

Each night, I request an email from my freelancers with the one sentence that describes the progress they’ve made, the challenges they face, and what they need from me. That way, I know exactly where the project is each day, and I can help them with whatever issues they are going to need resolved.
I also request a weekly call for about 15 minutes.

Again, I know it sounds excessive, but I discovered that if I nip little problems in the bud each week, we prevent them from becoming big expensive problems down the road.


Whenever you outsource, there is always going to be some risk. You’ll never know with 100% certainty whether or not the person is going to work out for you.

But if you eliminate these five mistakes that have directly cost me over $10,000 when I was getting started, then you’ll be able to stack the odds in your favor and find good freelancers when you decide to outsource your work.

If you also want to dive deeper on outsourcing, check out our comprehensive guide: The Complete Guide to Outsourcing.

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