Money Talk.

Outsourcing and the Money Equation - Deciding How Much to Pay and How

In any business association, money is of paramount importance because that is why business exists in the first place. So, it is extremely important that you have the money equation set right.

The beauty of looking for outsourcing professionals on the Internet is that you can benefit from a very wide range of budgets. Since it is people who are going to bid on your projects, you can select them according to what you can pay. You initially set a ballpark figure of what you can pay and most people will bid within this range.

Whatever your budget is, you are able to find good professionals to work for you within that range. Remember that you are looking at the global marketplace here, and people in other countries may work for much lesser or much higher than what they do for in your local area.

Different jobs have different money equations. It is quite all right if you bid a low budget project initially just to get the feel of the professional's work. You can tell them that you will review payments after you have seen their work. This works well and it also keeps the professional motivated because of the better payments that are poised to come their way.

When you are posting your project on a jobsite, do take some time to check out similar projects that are posted by other people. This will give you a good idea of what you should pay. But, more importantly, you must keep your own budget in focus when posting the project.

Escrows

Escrows help the employer as well as the employed in an outsourcing equation. We shall learn more about escrows in the next chapter.

Online Banks

PayPal (http://www.paypal.com/) is the most popular online bank used by freelance outsourcers. It is followed (though not closely) by Moneybookers (http://www.moneybookers.com/). If you are going to outsource a lot, it is also a good idea to have a Payoneer debit card (http://www.payoneer.com/) since it is affiliated with most of the freelance jobsites including GetAFreelancer, ScriptLance and oDesk. Releasing money from these sites to this debit card does not attract any fees either.



Milestones and escrows help in building mutual trust factors. Use them well.