In a direct offshore team, you employ the team members directly. There is no agency sitting between you and your people.
Direct Offshore Team
In episode 358, we discussed offshore labour hire, where your overseas staff is employed by a labour hire agency, but you train, manage and supervise them as if they were your own employees.
In this episode 359 let’s look at direct hires overseas. Charitha Wasala is a tax agent in Sydney who set up his own team with 8 team members in Sri Lanka – directly, so without an agency. Here is what we learned but please listen in as Charitha explains all this much better than we ever could.
To listen while you drive, walk or work, just access the episode through a free podcast app on your mobile phone.
Direct Offshore Team
Having a direct offshore team is harder to set up than just going through a labour hire agency. But it can save you a lot of money long-term.
How exactly you can set up your own team, we will discuss in episode 363. In this episode, we talk with Charitha about how he set up his team and how he manages it.
Central Office v Home Office
Charitha combines working from home with a central office for his overseas staff. That is more the exception for direct hires. Most direct hires work from home and only from home. The office is probably a shared workplace arrangement, so something that is not exclusively for Charitha’s team but that they can use for a few hours per week or month when they need it.
Blueprint Team Structure
We touch in this episode on the team structure Ed Chan of Wize Mentoring and Chan & Naylor recommends. Please listen to ep 200 with Ed Chan if you haven’t recently since that episode is really helpful.
So for Ed Chan’s blueprint structure – for a turnover of AUD 1m – you have a team of five grinders, one or two minders, and one finder.
Of the five grinders, one is the production manager, and the other four are just normal bookkeepers or accountants. Then you have a client manager, called the minder, possibly supported by an Assistant client manager.
The partner aka finder is not directly involved and might have up to five teams each managing a million turnover. The partner’s main task – apart from setting the framework that all of this is working properly – the partner’s main task is client acquisition.
AUD 200k Per Grinder
So for a $1m turnover, you have 5 grinders and one or two minders and then one finder. So when you break this down, each of the five grinders should be able to produce the work for AUD 200k of turnover. AUD 1m divided by five grinders is AUD 200k.
Just quickly do this mental exercise – look at the size of your team that does actual production work, and translate that into full-time equivalents. And if you are involved in production work, then include that as well. So for example, if you spent half of your time on production work, count yourself as 0.5.
And then multiply that number – that full-time equivalent – by AUD 200k. That is the turnover your team should be able to manage given its size. And the big question is: do you hit that benchmark?
If you don’t, don’t beat yourself up. It is just a good general rule to aim for, your full-time equivalent of production workers times AUD 200k. And of course, there is inflation. Ed Chan’s interview was in 2019 – long before COVID – so his AUD 1m turnover benchmark probably has increased by now. But for now, AUD 1m is a good round number.
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