Quick Outsourcing Comparisons … Before Outsourcing vs After Outsourcing my Back Office Work

Before I outsourced my back office, my distributorship consisted of my own sales and a handful of sales from part timers.  Collectively we sold $650K in sales and our margins were around 34%.

Since outsourcing my own sales have more than doubled and my average gross margins have increased by 43%.  Plus I have built a network of reps (I call them Swag Coach® Licensees) that contribute to over 60% of my annual income.

Here’s a quick comparison so you can see what I am talking about:

MY INCOME …                                        Before Outsourcing (2000-2005)      After Outsourcing

SALES FROM ME                                                        $625,000                                 $1,500,000

SALES FROM MY SALES REPS                                  $25,000                                    $3,500,000

AVG GROSS MARGINS                                                   34%                                             43%

TOTAL GROSS PROFIT DOLLARS                              $221,000                                   $2,150,000

MY COMMISSION SPLIT                                                100%                                             55%

SALES REP COMMISSION SPLIT (40%)                     $3,400                                       $602,000

COMMISSIONS EARNED ON MY SALES                     $221,000                                    $354,750

COMMISSIONS EARNED ON MY SALES REPS           $5,100                                         $225,750

ACCOUNTING/BOOKKEEPER COSTS                        $30,000                                             $0

SALES SUPPORT PERSON COSTS                             $30,000                                             $0

OFFICE EXPENSES                                                     $24,000                                             $0

Personal Income (before taxes)                                $131,900                                      $580,500

 

Not only has outsourcing been an impetus in helping me to more than triple my personal income, but it has absolutely impacted my “freedom of schedule” and time spent on the parts of business and life that make me the happiest.  Check this out:

TIME SPENT ON …                                 Before Outsourcing (2000-2005)      After Outsourcing

SELLING & BUILDING RELATIONSHIPS*                 30%                                                 70%

ADMINISTRATIVE/OFFICE WORK                             30%                                                 0%

MANAGING OFFICE EMPLOYEES                              10%                                                  0%

COLLECTIONS/CASH FLOW TASKS                          10%                                                  0%

PERSONAL/FAMILY THINGS                                    20%                                                 30%

Look at the areas I have now been able to focus on.  On average I spend 70% of my life working my business and 30% of my time on personal matters most important to me.  I control both areas and can dip in and out as I choose.  This may fluctuate based on my week but the reality is 100% of my time is focused on the things most important to me.

If you dig deeper into my sales and where they are coming from, it’s obviously not just my own sales.  I now have the time to focus my energies on the BUILDING & GROWING pieces of the business, including:

OF MY TIME SPENT ON SELLING/BUILDING …    Before Outsourcing               After Outsourcing

NETWORKING/VOLUNTEERING                                    5%                                           15%

MEETING WITH CLIENTS AND PROSPECTS                90%                                          40%

GENERATING LEADS ONLINE/OFFLINE                        0%                                          10%

RECRUITING                                                                     0%                                          10%              

TRAINING & COACHING                                                  0%                                          25%

You know what the common denominator is for every single one of these activities?  They are all revenue generating activities with a laser focus on growing my annual gross profit dollar volume.

Now you may say … “Yeah Josh, but if you were selling $1.5M in sales running the business yourself and keeping 100% of the commissions then you would be making more money”.  You would be right. However, the challenges I faced, that many of you probably face as well, are time and the “mental freedom” and discipline to focus on growing the business. 

Why?  Because when I was doing it all, even with a staff, there were simply too many distractions getting in my way. These distractions were affecting my ability to sell and grow the total gross profit dollar volume.  I also couldn’t figure out how to make the cash flow work.

Since outsourcing, I have been able to take the time to properly train and effectively coach my recruits, all newbies to the industry.  I have been able to make time for shadowing and sharing leads and clients, to help them grow their own sales and be successful.  Their success is my success.

But most importantly, through outsourcing, I have been able to grow my business with my vision intact while creating more time for myself and my family. 

If you are the kind of distributor owner or sales rep like me with a wide array of clients, you love selling but hate the back office and are looking to grow your business and total gross profit dollar volume by leveraging outsourcing, then I am more than happy to share my experience and chat! Email me at josh@swagcoach.com for more information.