Should You Hire A Full-Time Employee or Outsource to an Agency?

0:08

to Chase the Vision with Isaac. Hey, what is going on everybody? Isaac Mashman here and welcome back to another episode of your favorite podcast, Chase the Vision with Isaac Mashman, the show that is all about helping you become a more capable individual through me sharing my experiences and knowledge and business, life, and personal growth. Today, I want to have a pro and con conversation about hiring an employee versus hiring an agency or a firm to get a specific task done. Now many of you are business owners or maybe you're building out your personal brand and you're like, do I need to bring on somebody to help me with my content?

Do I need somebody to manage my social media? I need to outsource this. Do I need to have somebody else come in externally and help me out?

1:07

Well guess what guys? You are in luck because I'm going to be speaking from my own experience and what I have observed And as a business owner and as somebody who does have a PR firm and I have independent contractors on my team that have their own agencies, I want to have this conversation. I want to have this discussion. And I want us to be as unbiased as humanly possible as well, being that I do have a firm. So it would be easy for me to say, Hey, well, all the benefits are going to be over here when that would be lying, right? because there are benefits to having somebody full time.

And I want to break those down and have that discussion in today's episode. And before I jump into it, though, I want to remind you of the fee for listening to my show.

1:50

And that is to share it with a friend, share it with a family member, share it with somebody that you know personally in life that you know could get value from the things that I'm talking about. I ask that you do that for every single episode. And it could be as simple as taking a screenshot of where you're listening and putting it up on Instagram, putting it up on Snapchat, putting it up on Facebook and saying, Hey, go check this out. I would greatly appreciate it. I'm not running advertisements for the show yet. We are still gaining traction, gaining numbers. And for the past two months, we have been charting on Apple podcasts in Gambia.

crazy to think, but we are consistently in the top 50 for self improvement in, well, Gambia, right? And you've gone to start a chart. And so it's pretty crazy because now we are starting to have an impact and influence all the way across the world, literally six, seven, eight thousand miles away in entirely different time zones.

2:48

And it's a wild thing. And I'm blessed to be able to say that. So anyways, I want to start off with a story. And this was a recent client conversation, recent prospect conversation. It was somebody who I met through a mutual networking event and we were talking, I set up a discovery call, he reached out to me, he's like, hey, let's go ahead and hop on a call. I wanna learn a little bit more about what you do and then possibly make some introductions and whatnot. I'm like, okay, perfect. I sent him over the link to my discovery call, which has a list of perspective budgets.

And he ended up picking a very specific number and I was great. Okay, cool. So this is going to be a high ticket client that I'm going to possibly have the opportunity of working with.

3:30

And we have her call, the energy is great. We're having a phenomenal conversation. I'm learning about what he has to do. And then I'm starting to realize that by working with him, I'm going to also have to be training virtual assistants. I'm going to have to be spending a lot of time with this one client because of the caliber of the project. then I'm like, okay, even though it's done with you service, that doesn't mean that I'm just going to be able to do a call and get in and out. No, I'm gonna have to be really staying consistent and being on call for this guy, right?

I'm going to have to say, hey, let me help you with virtual agent. Like they're going to probably have to put me in a group chat. I'm just starting to really understand that this is going to be a lot of work.

4:14

And that's okay. That was perfectly okay with me, but at the same time, I'm like, I need to go ahead and adjust my pricing to meet the standard of what I'm going to be doing. And then I started to include my future value ads, which I'm offering to my larger clients. And I'm like, okay, it's time to introduce these. Because whenever you're starting out in business, you're going to have your rates at a specific rate. And then as you have more experience, as you increase your team, as you increase your value, as you increase your level of specialization, it's normal to raise your rate. I'm like, this is time that I go ahead and present this rate. And we went ahead, got off the call, I typed up the proposal, I sent it over to him.

4:56

And a couple of days later, it was on the week. And I was down in Orlando having a family vacation, so to speak, meeting with family members that I never knew personally. And I'm not here to get into that. But regardless, I'm on family vacation, I think I'm an ethcott. And I go ahead and I see that he declined to follow up meeting. And I'm like, okay, well, let's see if we need a reschedule. I send him over a voice message and then he's like, hey, go ahead and check your email. And I check it. And he's like, you know, the prices are exorbitant. And I'm like, what the heck does that mean?

I'm like, so I go into Google, I'm like, exorbitant, right? Unreasonably high. And I'm like, hmm. And it got me thinking and I'm like, okay, great.

5:37

You know, I'm willing to negotiate with this guy because even though I'm not one to negotiate prices, the price that I proposed was higher than what I typically charge because I knew that it was going to be an unusual case of what I needed to do. It would be unusual for me to do work like that and to help other people on the team. But I'm like, you know what, I will rise to that occasion. And so I was like, you know, I'm going to be willing to have a conversation about negotiation. But the more I was thinking about it and going out through my day, my family trip, I was thinking and I'm like, you know what?

crazy that the price that I pitched, which was $60,000 for a year, which boils down to about $5,000 a month, somebody else who runs a company would pay an entire department of PR professionals 200, 300, 400, 500,000 or even more than that, depending on the size and the scale of the company, to have that PR capability, that PR system. And I'm thinking to myself for the price of $60,000 somebody can have not only me, but they have every other person on my team of Mashman Ventures, all the resources, the access, the one-on-one work, and all of the different things that we provide with our clients.

And I'm thinking to myself, you would probably pay if you were running a company and you know, brought on W2 employees, you could bring on three or four different professionals, and you'd be paying multiple six figures versus paying less than six figures at $60,000. And And that's something that a lot of different companies do.

7:14

A lot of companies will not allosource to somebody else, but they will hire. And I think that there are some great benefits to hiring and to bringing people on like that. But you're going to be spending a lot more money and you're not going to have the same system set up. You're going to have to work hard to get those PR systems set up internally rather than trusting somebody externally on a contract. Now, whenever you bring somebody on your team and I'm talking W2 employees, depending on the scale of the company, you're going to have to be able to offer health insurance. And I believe that the law is over, you know, a company that has 49 or 50 people over, you know, you're required to offer that. But then you have to take into consideration, you need payroll services, right?

7:58

For example, if you were a sole proprietor or an LLC owner and you yourself are not on payroll yet, Now you have to 100% absolutely start being taxed as an S corp and having a W2 employee. Or even if you don't know what that means, you might not even go and be taxed as an S corp, which means you're going to be paying higher taxes. And then on top of that, you have to take into consideration federal income tax withholdings, right? You have to withhold, you know, social security, you have to withhold Medicare or, you know, the Medicaid tax. talking like 7.8%, whatever the actual technical number is.

And so now you're introducing this complexity. You're introducing this additional cog into your organization versus bringing on a firm or an agency, which you don't have to worry about with holdings because it's a tax write off.

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So let's say you're paying $60,000 to a PR firm or to a social media agency, you're not going to be taxed on that $60,000. You're going to submit Form 1099 or whatever the form is. And now you're going to be able to write $60,000 and because you paid that money out of your businesses, bank account, now you're able to write that 60,000 off and the PR firm has to pay the taxes on that. So if I was to work with this client, He isn't going to be paying taxes on the money that I did. Right now he's going to have this huge write off off of his tax bill, which can actually come out a great time, let's say if there's, you know, tax season, which is right around the corner and he had to pay a bunch of taxes.

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Well, let me lower my tax bill and work with the firm or work with somebody to where now I have this right. And then I, as the business owner of the PR firm, have to take the responsibility of paying old Uncle Sam that $60,000. And so there is the complexity and the the the complication of well, you know, the firm can terminate the contract. There isn't the same company vision. But if you're working with a professional firm, if you're working with somebody that is a professional agency, and I'm not talking, you know, some some dude who's like, let me manage your social media and do a post and isn't professional, I'm talking working with somebody that has their shit together, you are going to be getting the equivalents of somebody who respects your vision because that firm, that agency respects their own individual vision for their company.

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They're going to respect your own and they're going to want to contribute to your company's vision and the mission and what you're trying to do and what you're trying to solve in the marketplace to the best of their ability because they know that if they were to work with somebody else, else, they would expect nothing the less. They want to provide the same caliber of service as they would expect to receive. And with this particular case, it just sent me down this mental spiral in a bit of an official way. It wasn't a negative spiral because it just had me thinking and reflecting and saying, why is there this cognitive bias, this limiting belief of saying $60,000 to an entire PR firm or to somebody who can provide ex-results and help me with my life is too much, but I've been paying $60,000 to an employee.

11:15

Now, I'm not saying that he is doing that. I'm just saying that in a different situation, I imagine that this bias still exists where a company would say $60,000 outsourced is too much, but $60,000 to a PR professional is perfect. Let me bring on a second and a third and a fourth person because one person can only do so much when it comes to PR. And then you bring on multiple people who all have similar skill sets or in Mashman Ventures case, you know, I have an entire media team on the back end of, you know, the PR firm and then I have Eric Chow and then I have myself and I have, you know, this growing company that has these connections. I don't have to go out and, you know, seek connections for you.

11:57

I already have the connections. I already have the knowledge, I already have the value as I have the resources and you don't have to worry about creating them. And so you have to go through this pros and cons and you have to measure these out. You have to say, well, should I bring on somebody? Should I bring on an independent contractor or should I bring on an agency? Because then you could bring on an independent contractor. You don't have to worry about the insurance. You don't have to worry about any of that, but they have a specific job that they are tasked to do. And then you have to build out that company culture internally and hope that that extends to that person who is associated with your company and with your team. It's all about establishing a company culture and continuing to increase your value as you scale.

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And if you're staying at the same exact rate, I think about the world offline, the world our physical reality where we go to a car maintenance shop or we go through somebody that maybe cuts hair and we go to somebody that, I don't know, maybe mose lawns. There's only so much that you can do to increase your rate as a service provider in those specific fields, right? Sure. I guess if you're a barber, you could go and become a celebrity barber, right? But even then you're going to be limited, right? I think Floyd Mayweather pays a thousand dollars a haircut, but if Floyd only needs a haircut a couple times a month, you're only making a few thousand dollars and it's like, what's scalable about that? If you're cutting lawns, you can only make a lawn look so damn good and you can only charge so much.

13:34

Now it's about quantity. It's not a conversation of quality. It's about a conversation of quantity to be able to increase the amount of money that you're making. And now let's say you're somebody else who, I don't know, is a window washer. You can only wash so many windows and get them streetless and then get them looking crystal clear before you can't do anything else to increase the quality. Now it's going to be about quantity and reputation. It's not a scalable. And a lot of these internet businesses, we have the benefit. We have the blessing of increasing quality and quantity and our rates because now we're able to do these different businesses.

We are not in the traditional realm of service providers that our grandparents and our great grandparents and their parents knew. This is a different conversation. It's also funny because there's this different psychological thing that happens when you're making money online versus making money offline. It's almost like we lose the value of the dollar and it becomes more of a system of conversation and less of an actual currency.

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When I was down in Orlando, I was going and I was actually using cash and I don't use cash really at all. I use card and so it's a virtual currency. It's the number that goes up. It's the number that goes down when you deposit money into the bank or a check. The money just, they click a number and bam, it's there. The bank takes that digital number and then they're like, okay, let's go invest it. I'm using cash, which is unusual. I'll usually only keep like a $20 bill on me. And I was using it. I'm like, man, I'm giving like dollar bills. And I'm like, I'm paying $5 here, I'm paying $10 here, I'm paying, you know, $20 here. But at the same time, I'm like, I could easily spend that on Amazon in like literally two seconds.

15:28

I'm like, I could literally go and like, bam, check, check, buy now, buy now, buy now, buy now. And that value is different. It's a psychological phenomenon that happens to where the value is almost in existent when it's in our bank account, when it's digital, but we hold onto it more when we're in person. And that's the thing. We're playing in this digital realm, in this realm of we're building out companies, we're building out people. And then I want to introduce another subject. How can you merge the digital realm of providing services with the physical? And so one of those value ads that I had in my proposal was I will fly out to you.

I will pay out of my pocket to go train you for a full day. I will train your team and I will provide up to 250 copies of my work, personal branding and Manifesto on Fame and Influence.

16:20

And so as I'm building out this digital empire, I'm also looking for ways that I could expand into the physical space and have that physical connection. because that physical connection is what is going to help you really grow and know somebody. You can put on a front online, but you cannot put on a front in real life, you know, face to face. When somebody sees you going out and having conversations with people, are you being fraudulent or are you being legit? Are you going and doing and practicing the things that you preach or are you not? And so I introduced these different things and I would recommend that you do the same.

And what can you do to take this digital relationship into the physical realm for your clients? Can you provide additional resources that they can print out?

17:05

Can you provide additional incentives saying, hey, I'll fly out. I'll train you. I'll work with you. I'll show you the systems. I'll do X, Y and Z for you. And I know that this is getting a little bit off topic of the original conversation, the pros and cons of hiring an employee versus a firm or an agency. But just know that whenever you do do an employee or an employee rather, excuse me, you're going to introduce a lot of complexities to it. You're going to be introducing a lot of different things. But if you want to scale and you want to take it to the next level, that's not necessarily a bad thing.

But if it's something that you do not see yourself needing, let's say a decade from now, or you don't want to necessarily make that commitment, and agency is the way to go.

17:51

the other thing is you bring on somebody on the payroll, now they are reliant on you, right? With an agency with a PR firm, you know, you have more power and a lesser degree to where you can cut the contracts. You could go ahead and cut the negotiation. You could, you know, you could say, hey, I'm parting ways. It's less personal and it is less personal. Although it shouldn't be, it is less personal. And so as you're making these decisions, weigh the pros, weigh the cons, make an educated decision for you, but also realize that you could probably save money with going with an outsourced agency or a PR firm, especially in the case of this client.

If he was to pay a couple of people to help him with PR and professionals, and I'm not talking like virtual assistants out of India or the Philippines, I'm talking to somebody who is building a firm state side, you might be paying a little bit more than you would be paying a couple of virtual assistance, but what is the value that you are receiving from that?

18:53

If you're trying to cut costs and if you're trying to be cheap and you're trying to say, hey, I don't want to do this. I want to keep the prices low. It's like, at the same point, you're binding yourself in the butt. You're binding yourself in the butt. And then you want to go ahead and build out a company that have people in house internally. You're going to be paying two, three, four, five times the price that a firm or an agency might charge you. Even if I was to double my rate to $120,000, still that's two PR professionals. And you don't oftentimes see PR departments with only two people and companies.

Yeah, it depends on the size of the company, but not many companies are hiring full-time people if they only have two or three employees.

19:38

I'm talking about larger scale businesses, people that are making millions a year or hundreds of thousand dollars per month. That is what I'm talking about. That is the conversation I'm having. And if you're not to that point where you can hire full-time employees, consider hiring a full-time firm or full-time agency that you could call, that you could get the assistance from, that you could get the value from. And the results might shock you. So guys, thank you for listening to this episode of Chase the Vision with Eyes to the Mashman. If you got any value from today's episode, make sure to share it with a friend or a family member or a business partner. And until next time, always remember to chase after your vision and may your coffee be strong. Much love.