Entrepreneurs used to believe outsourcing is a strategy only big businesses can afford. But thanks to technology and the proliferation of highly skilled professionals, many small businesses are able to outsource tasks these days.
Running your business with help from outside professionals can build economies of scale and speed up your growth. However, before taking the steps toward outsourcing, it is important that you know exactly why you are doing it and when or how should you do it.
Cost savings is the number one reason companies outsource. Hiring in-house employees mean you have to pay for training, monthly salaries and benefits, while hiring an outside professional means you only pay for the work you get.
Outsourcing also allows you to leverage top talent from around the world – at a fraction of the cost. The money you free up can then be allocated to R&D, IT and other areas crucial for your business’ growth.
Another major reason for outsourcing is time savings. Because you no longer have to deal with mundane yet essential back-office tasks, you are able to shift your attention and energy on developing your products or services.
Outsourcing also helps you gain access to new market areas by taking your service delivery or production location closer to end users.
What to Outsource
Almost any business task can be outsourced these days, from HR management to procurement and logistics. However, that doesn’t mean you should farm out everything. You must also put in the hard yakka to be one of the best in your industry.
Before choosing which tasks to outsource, determine your business’ strengths as well as your own core competencies and capabilities. Where there is lack in time or expertise, a skilled professional can help. Say, if you can barely keep up with your bookkeeping and payroll administration tasks or if you need a company website created, get an expert to do it for you.
When to Outsource
The right time to outsource is never the same for two companies. In general, though, the right time is when you no longer have enough hours in your hands to pursue business growth or when you have a new project that doesn’t require a full-time worker to complete.
It is normal to feel like you are the only person who can carry out a task satisfactorily. It is your company after all, and you have worked hard to build it. But if you really want your business to scale, you will have to delegate those tasks so you can focus on the big picture.
Start by delegating one task at a time. Get a third-party accounting firm to do those tedious bookkeeping and bank reconciliation tasks, for instance. Once everything is going smoothly, you can move on to outsourcing your HR functions, then your IT needs and so on.
Outsourcing can be time consuming and risky, but it can be worth the investment. The important thing is to find an outsourcing partner that is capable of producing the same results as you – or even better.