Listen instead on your Monday Morning Drive:

“Balance is just about outsourcing!”

I hear this pushback a little too often, especially from people in the administration and planning spheres. But “balance is just outsourcing” is a vast under-interpretation of scalability.

Scalability means I can make money during busy months and slow months. I can handle more business with the same overhead, allowing me to make more profit. That’s it.

Unless we solve our business’s seasonality issue and earn the same revenue year-round, we’ll always need to outsource. Nobody’s arguing about the merits of outsourcing. Instead, we’re debating how much outsourcing we have to do.

But outsourcing alone doesn’t make you scalable.

Why Does This Misconception Persist?

It’s easy to believe that because what’s unique about scalability (our goal) and balance (our tool) is outsourcing, organizations that use balance to achieve scalability outsource more.

That’s a correct conclusion, but it’s not the most important one.

People take this concept to the extreme. They think, “If outsourcing is good, then insourcing must be bad.” But both can be good.

Balance isn’t just outsourcing. Balance is taking a holistic look at an entire business, making sure it has enough energy to:

• Have a consistent flow of business coming in
• Deliver a reliable gross profit from that source of business
• Manage the company so that it can focus on selling and planning every day instead of getting sucked into mundane problems

If scalability is the goal and balance is the tool we use to achieve it, outsourcing is the tactic — and it’s one of many, along with marketing, estimating, proposal writing, etc.

The Risks of Imbalance

If you don’t manage your balance long term, your problems become much more difficult to solve. You’ll only address pain points in one sphere of business at a time rather than thinking of how all three spheres (planning, selling, and administration) connect.

Suppose your planning sphere is experiencing a pain point. Your instinct is to hire another project manager, drafts person, or labor coordinator to make planning easier. But all that did was plug a hole in planning, knocking you out of balance.

If there are no systems and processes in place in the other two spheres to handle that new team member, your business won’t get the full benefit of that tactical Band-Aid.

If you don’t manage your balance, you’ll get out of balance, and the pain of the out-of-balanced systems could be greater than your existing pain points. When your organization is balanced, staying in balance becomes easier.

Balance Requires Constant Energy

“Balance” isn’t a static state. It requires constant energy.

As balanced companies, we constantly examine our three spheres. We also monitor execution, which is the internal customer of a balanced organization.

If execution fails, we look at our three spheres. If planning isn’t keeping up with staffing shows, we must put more energy into recruiting. If selling isn’t keeping up with our revenue needs, we must put more energy into marketing.

This greatly simplifies business management because we merely need to examine the constraints on our business at any given time.

For instance, you’re doing okay right now with your current level of outsourcing, given your business’s current size. But when your revenue is 50% higher, the results won’t be as strong if you follow the same balance.

If you don’t keep track of your balance and evolve it as the company grows or shrinks, you won’t optimize your income.

Balancing Many Tactics

While outsourcing solves some challenges and helps keep your overhead down, it’s only one tactic of many.

What about recruiting? Cost management? Travel management? Logistics management? Inventory allocation? To outsource effectively, we have to become experts in all these fields.

But none of this matters if we don’t have actual demand for our services, which manifests as profitable revenue.

The Takeaway

Balance isn’t just outsourcing. Balance is a constant energy exchange between selling, planning, and administration.

If you get out of balance, problems multiply. Stay balanced as you grow, and you’ll achieve sustainable scalability and optimize profits.

Outsourcing is one important tactic, but it’s not the whole picture. To truly achieve your goals, focus on balance in all areas.