Outsourcing and Cost-Benefit Analysis

Before you skip this entry or fall asleep trying to read it because those two economics terms, please read on. Both of these are things all of us do every day in our ordinary routines. When it comes to their businesses, serious photographers, whether established or aspiring professionals, definitely need to think clearly about outsourcing and cost-benefit analysis.

Right off the top, lets agree on some definitions:

• Outsourcing: The procuring of services or products from an outside supplier or manufacturer, in order to cut costs.

• Cost-Benefit Analysis: The benefits of a given situation or action are totaled up and then the costs associated with taking that same action are subtracted in order to evaluate the costs of the proposed action.

Outsourcing, though associated with sending jobs to other countries, is something we all do constantly. We outsource our cooking whenever we go to a restaurant. Sure, dining out can be faster and usually has a social component (it can be fun) but a part of it is still outsourcing. To paraphrase the definition above, “we have “procured a service from an outside supplier, (at least partially) in order to cut costs.” But wait, you are thinking to yourself, restaurants costs more then eating at home.

On the surface, of course they do. But many times when we eat out (or especially when we get food for take out) we are doing a short hand cost-benefit analysis: Particularly in the case of food that we do not eat in the restaurant environment, we have gone through a quick (if subconscious) calculation. To paraphrase the definition above, “the benefits of a given action are totaled (the cost of the raw food we do not have to buy and the cost of labor that we do not have to do in order to cook the food.) Then the costs associated with taking that action (paying the bill) are subtracted in order to evaluate the total costs of the proposed meal.”

There are many other situations in our daily lives where we do the same thing. How many of us change the oil on our cars? When I was younger and my time was worth less, I used to change the oil in my car. How many of us hire house cleaners/cleaning services. Again, we are outsourcing, using cost-benefit analysis to help us decide what we do not want to do (and/or would rather pay others to do.)

So what does outsourcing have to do with photographers? Well, for most of us, the time we have is limited so we need to make good use of the time that we do have.

As photographers, outputting our images as final prints, is one area where many photographers think they should invest a lot of time and energy. I am NOT one of them. I know how much per hour I can make if I teach a class, do an assignment or work on my stock photography business. All of those activities pay me much better than spending months, even years, learning how to make first rate prints from my digital files. So, I for one outsource my color printing to: http://www.adoramapix.com. Similarly, I outsource my black and white printing to: http://www.digitalsilverimaging.com/index.php I am now able to get first rate prints for very reasonable costs. The one thing that I invest energy in when it comes to printing my images is the calibrating of my monitor and the profiling of my images to match the profiles of the photo labs that I use. Printing your own work can give you pleasure so that is something to put into the calculation but for me, printing images is work, work that someone else can do better and more efficiently.

I indirectly outsource much of the mundane, office work that I would rather not do myself. I regularly work with interns who do the data entry work I need done. In return for doing the office work that we both know is less than fascinating, I tutor them in photography, help them develop photo projects and/or guide them as they work their way into the world of professional photography. The cost-benefit analysis is very straightforward. We discuss and then agree that my time is worth about four times what theirs is worth. That is not a value judgment, just a calculation. So an intern works for me for about four hours and in turn, I give them about an hour’s worth of guidance/advice. The interns I work with do a similar cost-benefit analysis and most view the transaction as fair, fair enough that they usually work with me for as much as a year (or more.) Most internships work this way, regardless of whether the calculation is explicit or implied. The starting point is that the mentor’s expertise makes his or her time more valuable than the intern’s time.

The key-wording of my stock images is an example of work that I really hate but really need to get done. I have experimented with a variety of different ways to outsource that work. I have utilized the talents of foreign and domestic companies that offer key-wording services. I have taught interns how to key-word, then paid those same interns after they completed the internship. I cannot say that I have fully resolved key-wording in terms of a cost-benefit analysis, in the same way I have resolved the way I print my photographs.

In a way, I outsource the marketing of most of my photography workshops. I abhor marketing and I am not good at it. In theory, I might make more if I produced and marketed my own workshops, but using cost-benefit analysis, I have realized I am willing to make less money teaching a workshop rather than being obsessed about marketing, promoting and running the workshop myself.

Recently, I have started working with a writer who is helping me with one other thing that I hate to do, but need to have done, writing. His name is Jeremy Matters and his company is called Idiom Copy. He’s a talented freelancer, and his rates are reasonable. If you need any text written for your website, email campaign, or just about anything else, I highly recommend him. He has skills I lack so for me it is a pretty easy decision to outsource writing work to him. You can email him at info@idiomcopy.com or visit his website here: http://www.idiomcopy.com

I could go on but I hope I have made my point. The starting point is a brutally honest evaluation of how much your time is worth in the working world of photography. This is built on an equally honest assessment of your strengths (and weaknesses.) As a photographer, I know I am good at playing with light and shadow, doing in-depth photo-essays and street photography. Experience tells me I am equally good at teaching these same things to others.

Sports, fashion and food photography are genres where the cost-benefit analysis shows I should not be working as a photographer. I may be able to make good images in those specialty areas, but the effort required (tremendous amounts) and the resulting successful images (very few) keep me away from pursuing those specialties. Other photographers do those types of work much better (and more economically efficiently) than I, so why even try?

Being able to effectively (and efficiently) photograph people is a real gift. The most successful people photographers I know are the ones who embrace this, focus on this aspect of their work and outsource as much of the rest of their businesses as they can. They know what their time is worth and use that knowledge to regularly make cost-benefit analyses. Those calculations may not be written on paper, but they are constantly being made.

I long ago calculated how much I make (on average) if I teach a class, do an assignment or work on my stock photography business (even if that work is not paid in stock image sales until months or years later.) I keep that in mind every time a task comes up that needs to get done. My default is to try to outsource. That is because my ongoing cost-benefit analyses reminds me that the few things I do really well are worth much more per hour than other kinds of work I do not care to do and usually can outsource. What about you?

4 responses to “Outsourcing and Cost-Benefit Analysis”

  1. Lets see, Cole Weston was able to work faster than his father, due to his youth and his father’s illness. Maybe it was outsourcing. On the other hand, it was not done elsewhere, so maybe it is not outsourcing… :):)

  2. does outsourcing necessarily imply it has to be done “somewhere else?” how far away does “somewhere else” have to be to be considered outsourcing.

    In Cole Westin’s case the outsourcing not only involves “place” but “time” since, in a way, he was licensed to continue his outsourcing of printing from original negatives after Edward Weston’s death.

  3. All good points.

    The “out” in outsourcing usually means outside the workplace of the one doing the outsourcing.

    That outsourcing was strategic (resolving the father’s health issue) plus economic AND it was across time as well.

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