Small Businesses Save Big with Crowdsourcing

(This blog series -- -- is sponsored by HP Officejet Pro. Did you know that inkjet printers can create professional color documents at about half the cost per page of laser printers?)

When you run a small business, it's easy to fall into the trap that you have to do everything yourself. If you don't have the money to hire experienced employees or engage top-notch professionals, you feel like you're pretty much on your own.

Doing Business in the Crowd

But it's not true. With the ever-growing freelance economy, there are skilled pros around the world eager to work for your company on flexible and affordable terms. And with the rise of online outsourcing and crowdsourcing services like eLance, Guru.com, oDesk, CrowdSpring, and others, you don't even need to build your own network of freelancers.

Crowdsourcing, essentially, is the idea of connecting large numbers of potential contributors with a particular task. Internally, especially at larger enterprises, projects are often informally crowdsourced to employees, soliciting ideas and suggestions from across the company. (In fact, we're tried this approach with some success here at AllBusiness World HQ, using it to come up with names for important projects.)

At small businesses, though, crowdsourcing usually becomes an external process, using open calls to connect large numbers of freelancers to prospective projects and employers. The sites listed above are all designed to facilitate that process (including pitches, bidding, the selection process, delivery, acceptance, and payment) in various ways.

While most crowdsourcing activities center around popular categories like design, computer programming, marketing, writing and editing, and even administration and finance tasks, it's possible to outsource and crowdsource just about anything. All it takes is the ability to carve out a specific task and deliverable, and to explain what it is you're looking for.

Crowdsourcing Pros and Cons

Many small business owners report , consistently getting quality work at bargain prices.  Sometimes they don't even need to pay cash for the work, instead offering nominal prizes to the winners. Sometimes the "crowd" comes up with solutions that smaller groups simply . And many freelancers are thrilled with the ability to reach new clients they would otherwise never have access to.

But -- and you knew there was going to be a "but" -- there are downsides to crowdsourcing, too.

Some will seem fairly obvious, like increases in project management costs and hassles, and the possibilities of delays and miscommunications and drop-outs. You also may not be protected from problems with the finished work, including copyright and trademark issues.

Those issues are all real enough. But here are a couple of other things to consider:

First, crowdsourcing is not your best bet for regular, ongoing work. Any savings you'd find will be eaten up with management hassles. Better to find a single great contractor for such tasks and stick with them.

Second, keep in mind that always searching for the lowest possible price can be a mistake. The most talented, seasoned professionals simply can't work for bare-bones rates. You'll likely get junior folks, often offshore, with limited experience. And they simply won't be able to afford to spend the time needed to do the best possible job.

Sometimes that's OK, of course, particularly for low-value, one-off jobs. But often it's simply not good enough.

Find Your Crowdsourcing Comfort Zone

That leads to my final point about crowdsourcing. There are two basic ways the process can work. One way is that you put out a call for bids on your project, select the one that best meets your needs, and then contract with the "winner" to do the work.

The other kind of crowdsourcing is best suited for one-off projects where you're looking to commission a relatively small, well-defined project, such as a new company logo. In this model, you send out the request and requirements -- including a fixed price -- and freelancers submit their finished work "on spec." You select the "winner" from the submitted entries, and only that winner gets paid.

Everyone else gets, well, nothing -- except the satisfaction and experience of having tried.

That kind of arrangement makes me uncomfortable, but it works well for others. Ultimately, every small business owner needs to choose the arrangements that make the most business sense, and crowdsourcing can often be a very useful option.