There are different schools of thought on this topic but most agree that, at minimum it is important to understand the process for supplementing enough to either do it internally or keep your outsourcing partner accountable for the work they do.
One thing is sure, supplementing is not something you just “do”. It requires intentional preparation and dedication even on a small scale. Here are two variables which should bring measure to your decision for whether to supplement your own jobs or outsource.
If you are experiencing fast growth in sales you should guard this from being derailed. Don’t try to fit a round peg in a square hole. If you don’t know how to supplement at this pace then get help; at least for a short season until you figure out how to manage successfully. Even large companies who have a pretty decent internal supplementing department find it more lucrative to outsource during growth streaks. Then once they level out they don’t have to lay-off their people.
Fast growth is known for highlighting a company’s weaknesses and challenging its processes. You would be wise to examine how your company is performing under the current pressure before adding new processes, people or technologies. This could go either way depending on the answer.
A fast growth rate is just one perspective to consider when deciding if you should supplement your own jobs or outsource. Now take a look at the size of your company for more perspective.
→ Small / solo sales operations – This size company should be able to supplement their own jobs at just 1-2 jobs per week assuming they have the skills to do it. Depending on the goals of a company this size it’s reasonable to assume they want to increase their workload and profits. If so, they should outsource a few jobs just to become familiar with the process. If they don’t have the skills to do it then they should outsource 100% of their jobs while they learn how. Either way they will be ready when demand increases or their sales team starts putting bigger numbers on the board!
→ Medium-to-large sales operations – Once you are at the point of handling 10+ jobs per week it becomes critical that you prioritize based on strengths, keep cash flowing and watch your net profits like a hawk. It’s time to segment your processes and responsibilities. Each area should be examined based on the part it plays in the grand scheme; using metrics for measurement and bottom-line results. Following this assessment, it should be apparent what your strengths are and are not, but at this pace you can’t pick a fight with every weakness; you simply need to ensure your core areas are running smoothly.
If supplementing is strong for you, and going well, then don’t outsource more than 50% of your jobs. This is enough to help you handle waves of growth keeping you healthy and steady. However, if this isn’t something you prefer to handle internally, or have confidence with just yet, then don’t be afraid to outsource 100% of it. Just make sure you know exactly what you need in order to make this work for you and find a partner based on these needs. The right outsourcing partner’s estimate and supplement approval handling will exceed your own ability to accomplish the same results but without the increased overhead and management.
→ Nationwide sales operations – At this level a repeatable product is key and decisions are made on averages. Averages are then determined by repeatability. Usually this involves: a dedicated supplementing department, policies and procedures, metrics and outcomes reporting. If you are at this stage and you still have salesmen supplementing their own jobs; you are leaving untold amounts of money on the table.
Even if you have a dedicated team to handle supplements; their averages should be weighed against what an outsourced supplement management company could provide. At this stage in the game outsourcing should be a necessary part of your working business model. It will keep you aware of comparative results and provide a scalable solution should you need it.
One more tip, you should not be just looking at bottom-line numbers because there are plenty of ways to cut corners and hike profits. What you need are experienced partners who understand the importance of extending the reputation of your company’s brand; both internally and externally. They must successfully collaborate with your employees and accurately represent you in the marketplace, especially if as a white-labeled partner. You will be much happier with their performance if they are positively impacting your brand, too!
Making the decision for whether to supplement your own jobs or outsource can be a hard pill to swallow given this is known for being the profit center. After all, who wants to let go control of their profit center? We understand but the facts don’t lie. If you are a small-to-large sized restoration contractor, and growing, then outsourcing is most likely the best answer for you.
While returns may vary, most supplement management companies will return a per job average that is much higher than most restoration contractors are able to accomplish because this is their specialty. Overall, you should expect profit margins to increase and cash flow to be more consistent.
Contributor: Aaron Cutler