The idea of outsourcing part of or entire business functions has been around for a long time, and it is pronounced in both established and startup businesses. You may also be considering outsourcing your business operations, which makes you become part of a larger number of entrepreneurs with this idea. Businesses around the globe outsource their functions to boost their efficiency, disrupt the market and improve customer service. This could be the best approach for small businesses that aspire to grow. Small businesses should hire contractors when they are incapable of maintaining a full-time workforce. However, the process of outsourcing business functions is not always easy, especially for small businesses that are mainly run individually. Therefore, this article discusses how small businesses can outsource their work and functions and reap the benefits of growth and success much easier.
Outsourcing for Small Businesses
There are specific simple steps that can help in outsourcing for small business owners that cannot afford the cost of maintaining a full-time, competent employee. The process usually involves a transition in which a business owner hands over the mandate to conduct business functions to a hired contractor. Therefore, you wish the transition to be smooth and ultimately profitable, follow the steps discussed below.
Identify the Tasks that Require Your Attention
Not all small business owners are ready to relinquish any control of their business, meaning they are less willing to assign tasks to someone else. Although this understandable, you cannot perform optimally while handling many tasks in your business, especially if they are essential for success. Therefore, it would be wise to let other people run functions such as marketing, bookkeeping, copywriting, public relations, and client pitching. Most of these tasks do not need to take up your money and time. Moreover, when you are concerned with the bigger picture of the market, minutiae tasks such as answering emails and being active on social media can adversely impact your business. Other business work may require specialized skills, such as tax filing website copywriting, which you can hire someone to save time and instead focus on other income-generating tasks. Therefore, you will need to outsource some tasks to create the time needed to grow your business. In this regard, evaluate the time you need to focus on income-generating tasks and have experts deal with other more complex or less demanding duties. You can still outsource certain functions even when you have employees since some tasks require expertise, which you may lack in the beginning. This saves you the money you would otherwise spend on paying and sustaining a special employee for an increased salary, which comes with other expenses in terms of payroll taxes.
Know All the Legal Requirements
Many business operators will have various concerns regarding outsourcing, such as the security of the data on their business and their customers. Another notable concern is whether vendors will comply with legal requirements, including laws and regulations. Certain laws are passed in this regard, such as the General Data Protection Regulation (GDPR), raising concerns among business owners on the security of customer data. Moreover, several federal, state and local laws have an influence on how businesses are operated, such as tax statutes and wage policies. Interestingly, the laws are inconsiderate of whoever is handling business functions, whether you are handling them individually or outsourcing. This means the total responsibility for whatever happens in your business is assumed by the business itself, which would probably impact the kind of tasks you choose to outsource. For instance, you may decide to personally handle customer data, website updates, and strict production control. Besides, you would find it pleasing to outsource various stages of the tasks. However, whichever approach you decide to employ, you assume full responsibility for understanding and abiding by the laws regulating your business.
Make a Careful Choice of Your Partner
The success of the outsourcing process is heavily dependent on the type of company or person you choose. This implies that you need to carefully select the company or person you intend to enter into an outsourcing partnership with for the transition to be smooth and productive. This is because the selection process much resembles the process of hiring a new and competent employee that works towards the success of your business. For instance, if you are running a small business and are looking for a copywriter or bookkeeper, you need to choose among options to escape the trap of falling for the wrong partner. In this case, many outsourcing companies would prefer spending considerable time with the selection of their service providers. Therefore, you need to perceive any business outsourcing relationship as a partnership. Have many options after thorough research and carefully consider the right partner and the possible impact on the growth of your business.
The Benefits Correlate with the Investment
Surveys show that 35% of outsourcing businesses have higher expectations that outsourcing will lower their expenses, while 32% believe outsourcing will cut down their operational costs by below 10%. On the other hand, 9% of businesses believed that outsourcing would lower their expenses by above 30%. However, companies generally expect outsourcing to lower the costs incurred in operating their businesses. In some cases, outsourcing may result in increased expenses in the course of months or years after entering the partnership. However, despite the increase in costs, many opportunities for the growth of your business are created in the long run as compared to before the outsourcing. This enhances the increase in your profits, the growth of your business, and the ability to venture into new business opportunities that you would otherwise miss if you wasted your time on mundane and unproductive tasks. Therefore, the long-term benefits of outsourcing far much supersede the costs incurred, even if the expenses are initially increased in the first few months or years.
Small businesses that operate on fixed budgets need to carefully consider the partner to outsource their tasks, as this greatly affects the increase in costs. Besides, other factors apart from the cost include the reputation of the service provider, the scope of the services you intend to outsource, as well as the skill and experience of the company or person. Moreover, you have to consider the service speed, work history or portfolio, alignment with the goals and priorities of your company, and the ease of partnering in the business. However, the weight of these factors in influencing the partner’s decision will always vary. For instance, it may be challenging to land a partner with skills in legal regulations and data security, communication, or working within deadlines while receiving low payment.
There are specific simple steps that can help in outsourcing for small business owners that cannot afford the cost of maintaining a full-time, competent employee. The process usually involves a transition in which a business owner hands over the mandate to conduct business functions to a hired contractor. Therefore, you wish the transition to be smooth and ultimately profitable, follow the steps discussed in this article. However, the weight of these factors in influencing the partner’s decision will always vary. For instance, it may be challenging to land a partner with skills in legal regulations and data security, communication, or working within deadlines while receiving low payment.