Not only can you hire someone to do your PowerPoint presentation and maintain your database, you can procure a competitive analysis or even a business plan for little more than what Denny’s pays its busboys.

While exact figures aren’t tracked, small-business outsourcing is rising fast. Timothy Ferriss, with his book The 4-Hour Workweek, urged small-business people to outsource the daylights out of their duties. Mountain View, Calif.–based Elance.com, which connects employers with freelancers, has seen help-wanted postings grow 40 percent over the past 12 months. And business at similar facilitating agencies, like Brickwork India, Get Friday and Bpovia, has also ballooned.

Still, entrepreneurs who’ve tried it say that outsourcing work can take an awful lot of work. “It’s hit or miss,” says Jeremy Reither of R3R, a San Francisco Internet-marketing agency. Reither had a good experience farming out routine duties, like compiling reports, but more complex tasks led to frustration. When he hired China-based Bpovia to design a Web page, he and his outsourced software developer went back and forth endlessly over corrections. Reither eventually concluded that Bpovia wasn’t willing to invest more time on his project for the agreed upon fee—a whopping $150. (Bpovia founder James Huang says the task was more complex than Reither believed but adds that his agency didn’t “know how to say no.”) Reither’s ultimate lesson: Use outsourcing only for straightforward, repetitive tasks.

Others have had better experiences tapping overseas tech skills. Mike Merrill, of Jacksonville, Fla.’s Smartphones Technologies, which makes applications for mobile phones, has employed engineers through Elance.com since 2006. There were some false starts: One Pakistani software team simply disappeared before finishing a Web page design job. But a team in Kiev, Ukraine, has proved rock-solid. “We would never have got the company off the ground” if it hadn’t been for these workers, Merrill says. They cost him 70 percent less than he would have paid a comparable team in the U.S.

Though it’s growing easier to find English-proficient freelancers abroad, some idioms don’t translate well across borders—making it particularly hard to outsource creative tasks. Humor site Zug.com recently contracted some humor writing through Get Friday so its creative team could take a vacation. (Zug founder John Hargrave jokes that it was also an experiment to see if he could lay off his expensive American comedy writers.) The result? A Bangalore, India–based recruit gamely came up with some sketches. One involved a Sudanese goat herder. Viewer comments were merciless.

When assigning tasks to an overseas team, Hargrave suggests paying keen attention to detail. With most communication occurring via e-mail, it is difficult for workers to ask questions or pick up on nonverbal cues. Spelling everything out can be challenging for some managers, who might end up wishing they’d simply done the tasks themselves. “On the other hand,” notes Hargrave, “it’s perfect for micromanagers, who can finally turn their obsession into a productive use of time.”

Source: smartmoney