"Work On Your Business,
Not In Your Business"

A Business Owners Association has This as Its Motto.
It's a Wise Credo as well as for New Merchant Level Salespeople

By: Biff Matthews, President, Cardware International

The idea of “working on, not in, your business” is to focus directly, and nearly
exclusively, on what earns income for your business, and what you do best. 
And to enlist good outsource talent to supplement your core expertise, rather
than try and wear all hats.

“DIY” is great for weekend handymen.  But there are compelling reasons to
outsource the tasks that are outside your core competence to an entity which
can deliver economics of scale, along with the economies of greater knowledge. 
There’s much to be gained by spending your energies on your core capabilities
and finding partners to supplement areas where you’re not as strong.

Yes, there’s cost involved, but saving a dollar, or earning five of them is not a
difficult choice.  If you’re constantly focused on saving a dollar, you’ll never have
sufficient resources to grow your business to its fullest potential. 

What should be outsourced?  The MLS we’ve known during our 30+ years in
business have benefited most by outsourcing these eight or nine tasks:  routine
merchant service and help desk, programming and deployment, kitting, chargeback
management, encryption, statement preparation, and merchant training.  Of these,
the most critical are the first two, which typically drive the other operational functions. 

In general, the most successful MLS professionals have excellent sales abilities,
and so-so operational skills.  It’s no surprise; the two are diametrically opposed and
individuals who are top performers in one tend to “under-achieve” in the other. 
Clearly, each discipline needs a working knowledge of the other, but the skill sets are
very different and most of us perform better when we’re working to our strengths. 

So, what to look for in a good outsource partner?  Overall knowledge of the
business is #1; experience is #2.  (They do not necessarily accompany each other.) 
Technology tools are also important, along with their commitment to the work,
as measured by resources they’ve invested in people and training. 

When I consider a vendor partner for operational functions, references are crucial,
although the specific references requested are somewhat unconventional.   No one
gives bad references, so to get the clearest picture, I also request that a prospective
partner provide names of his former customers, and names of companies that,
for one reason or another, did not become customers at all.

I weigh the comments of these former customers and non-customers carefully,
along with the reasons why, in the latter case, the fit didn’t make the grade. 
And I compare this with my own company’s requirements.  In a surprising number
of cases, we end up hiring the company that did not get that business.  Either way,
though, this additional effort penetrates the propaganda and allows me to make
the most informed decisions possible.   

The needs of my company and the other firm could have been radically different,
and there might not have been a fit for them.  Fit is, after all, everything when
comes to a working partnership.  If you’re not on the same page, with similar core
values and goals, you’re not going anywhere.   

Other questions for references include why they chose this partner and why they
have chosen to stay in the relationship. What value do they receive?   It’s also
revealing to ask what events would cause them to terminate the relationship.  

Understand from the beginning that no partner is perfect, and there will be times
when partners will be out of compliance with the agreed-to level of service. Does
the reference receive information about the out-of-compliance issue before he
discovers it himself?  Once addressed, how is the situation resolved, and with what
frequency does it recur?  The “bottom line” you want from the reference is: 
does the partner respond to problems with band-aids, or meaningful solutions?

Next, you need to get inside the head of the company you’re working with, and be
willing to let them inside yours.  Just as a sound marriage is based on straight-on
communication, so is a sound business partnership.  It’s important to allow time for
the parties to get in-sync with each other.  And to have in-place short-term and
long-term exit strategies should the relationship prove unsound. 

I believe the best outsource partner is also one for whom you are an important client. 
Being a small fish in a big pond is not a formula for satisfactory results.   It’s important
they have the wherewithal to support your activities as you grow, too, and this may
require that you choose multiple partners for the various skill sets you need.  An
individual or team who excels at one skill set may not be proficient in another skill set,
though one partner can be proficient in many areas.

Due to the importance of the potential relationship, a site visit to any outsource partner
you are considering seriously is recommended. Telephone communications are one-
dimensional; a site visit, on the other hand, quickly cuts through veneers and PR. 
A site visit allows you to know, as one important example, that your outsource is
not outsourcing.

Outsourcing is critical to the growth of any new business.  You and other MLS can
generate abundant new sales, but if the business you brought in is not serviced and
retained, your success will be constrained.  More critically, you’ll never maximize the
value of your time.   Learning to identify partners that can help you succeed is a skill
every bit as valuable as sales itself.

Once you’ve qualified your outsource partner, be prepared to pay a fair price for the
level of service you expect.  You must be profitable to succeed, and they must as well. 
And you want them to be in business long after you have sold your portfolio.  (Note:
this happy scenario will not occur if you try and outsource to Bangladesh, with or
without a site visit.)  Two final thoughts are, you should not have to micromanage a
competent partner – they should be able to achieve what you hired them to do without continuous hand-holding.  If you have to micro-manage beyond the first few days, you
haven’t chosen as well as you might have, and you may want to choose again.  Also,
as a start-up venture, recognize you are a customer of value, but other customers
are valuable as well.  Be patient, and open to their greater insights.  Like parachutes,
all minds function best in the “open” mode. 

Biff Matthews is President of Thirteen Inc, the parent company of
CardWare International.  He is one of 12 founding members of the ETA,
serving on its board, advisory board and committees.  (740) 522-2150.

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