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Last Update: Wednesday February 21, 2018

Key Idea: Outsource Manufacturing

Donna Baase is not interested in running a manufacturing plant. She wants to give her customers unique, botanical based skin products.

Key Question:

A: 

Donna has organized the business so she can focus on what she does best.
She is  building a virtual corporation. She has just one full-time employee, several part-timers and four business alliances. An outside lab makes the liquid products. Two other companies make the bars and lip balm. And, of course,  prisoners do packaging.

This is the new way to run a business. You do what you do best, then find others to do the rest. The old way is to hire employees. The new way is to form alliances. This way is efficient and saves you from burdening yourself  with infrastructure and overhead. Donna may change her mind as she grows, but for now, she's glad to have teams of people  who don't work for her, but with her.

Q:  What is the downside of outsourcing?

A:  You don't have as much control as you would if you employed every person who is working with you. The part-timers can be irresponsible or inconsistent in their work schedules, and then your service suffers. In the manufacturing processes, you may not always get what you negotiate for.

Q:  Is building a virtual company only good when you don't have enough money to do everything yourself?

A:
This is the reason Donna is currently still virtual. She doesn't have the money to build labs and plants to make her products. However, she accidentally discovered that this is a great way for her to work. She personally likes it.

Q:  If the people-part of running a business is the most difficult part, then isn't forming alliances for specific tasks a viable solution?

A:  It is for Donna and plenty of others. Her bookkeeper does bookkeeping for others, her artist does design for others, her sales reps handle other products, the plants that manufacture her products do so for others, and the team of workers at the jail does work for others.

This business model is the future.Small business can start small and stay small today because it allows everyone in the supply chain to only do what they do best.  With digital workflow, everyone can work as if they are in the same room 24X7.

Q: Is managing all of these strategic relationships/alliances really easier than simply hiring people?

A: If you pretend you have all the money you need to start and build a business, you ask yourself, what's best for me? What fits my personality? What makes me happy? What brings me the most joy and the least frustration? With technology, you can now have anyone in the world working for you.

Do you envision walking into an office and dozens of faces raise up from behind computer screens and greet you with a smile and a verbal, "good morning?" Do you see yourself pulling up in your pickup to a job site and you not only see work being done, but also you see individuals you have hired and invested yourself in? You know their spouses' names and the names and ages of all their children? You feel a warm family feeling when you call these employees into your office to discuss how to solve a customer problem?

Or, do you see yourself in a state-of-the-art office on the phone doing deals with the owner of the manufacturing plant that makes your products? And you're in an e-mail "conversation" with independent sales people who handle your products. Also, you work strictly online with your web site developers You don't want to know people too well. You don't want to fuss with all the personal problems people bring with them to work every day. You don't want to think about employee benefit packages and training and parking places and clean rest rooms.

You get to choose! What kind of life do you want?

Think about it

Is your payroll a big burden to you?  Would it be possible to re-organize your business to outsource the tasks you don't enjoy?  Could you do more with fewer people if you added more technology?  What strategic alliances do you have now and do they work for you?  What strategic alliances should you form?

Clip from: Cowgirl Enterprises: Just Do it! Take charge!

Boulder, Colorado: In this episode of the show we visit with all American cowgirls. They actually ride horses and Harleys. They know how to sweat, roll up their sleeves and get the work done. There are no prima donnas here. They stand in sharp contrast to so many woman in the world. And because they embody the American spirit for freedom and adventure, we encourage the vision, "Take it global, Donna!" Encourage all woman who are held back or in the dark.

So many of our viewers ask, "How do you get a business started?" Here is a good story to study.

Donna Baase had a vision about skincare products that come from botanicals -- herbs, flowers, roots, etc. In the dry air of Colorado, especially in this mile high city, she knows women need and want skin moisturizers that really work.

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Cowgirl Skincare

Donna Baase, Founder

833 W. South Boulder Road
Building A Tel: 303-440-7549
Louisville, CO 80027

Visit our web site: http://www.cowgirlskincare.com/

Toll Free: 888-440-7549

Business Classification:
Personal Products

Year Founded: 1987

Outsource Manufacturing

HATTIE: (Voiceover) Donna consults with Ben Fuchs, a pharmacist and owner of the Rocky Mountain Natural Laboratories, which produces her liquid products.

BEN: I develop a very strong personal bond with all my customers. I get to know them personally. I need to know what her needs are, not just as a businesswoman, but also from a personal standpoint, so I can provide the best service. And also, I love my customers. I love working with people who are creative and...

HATTIE: But she couldn't afford you. She could not afford to have you on her payroll.

BEN: Right. She doesn't need to. She can just pay a fee. She can have a product developed for her and then she can pay us to manufacture it and bottle it.

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