For enterprising professionals, this trend spells tremendous opportunity. Jennings says novice outsource contractors can use the knowledge and expertise gained from their professions to build businesses. Indeed, anyone from a janitor to an electrical engineer can become an outsourcer. And the number of potential clients is almost limitless.
Sound good? Don't jump in quite yet. Jennings suggests that before taking the leap into this industry, you should start building a client base. "You should have at least one contract before going out on your own," he says.
That's how Warren Wiggins broke into outsource contracting. In 1986, Wiggins, 41, was working the night shift as an electrician at General Motors, but during the day, he started doing some electrical trouble-shooting on his own. The next year, Wiggins quit his job and launched WW Contractors Inc. from the basement of his Randallstown, Maryland, home.
day, he started doing some electrical trouble-shooting on his own. The next year, Wiggins quit his job and launched WW Contractors Inc. from the basement of his Randallstown, Maryland, home.
"I was just a one-man company at the time," says Wiggins, "but I took out the biggest ad in the Yellow Pages and put a lot of phone numbers with different extensions to make it look like I was a big company." The ploy worked, and today, Wiggins' efforts include a five-year project worth $8 million for the Social Security Administration and a $2.2 million project for the city of Baltimore. Even though Wiggins now employs 49 people and boasts annual revenues of $4.5 million, he still runs his business from his basement to keep overhead costs in check.
Wiggins isn't alone. Many outsource contractors keep overhead at a minimum by working from home. And because outsourcing is often a service-based business, start-up costs aren't prohibitive.
For Jim McCalla and his wife, Jane, the desire to start a business with low initial costs and minimal overhead led them to outsourcing. "Outsourcing had a low break-even [point], it didn't matter where we were located, and it could provide a recurring source of income because the projects are ongoing," says Jim McCalla, former president and CEO of the Memphis, Tennessee, Boys and Girls Clubs of America. Using an office in their Cordova, Tennessee, home as their base, the couple launched Twenty-First Century Solutions in 1994 to provide attendance and payroll services to small and medium-sized businesses.
The McCallas run the business on their own, but with it growing at 150 percent per year, they anticipate a need for some help soon. "We're bursting at the seams," says Jim McCalla, 54, who plans to practice what he preaches by outsourcing the business tasks that aren't part of his company's primary focus.