Small businesses can find the advantages of outsourcing to be significant to their bottom line. The history of outsourcing demonstrates that low cost labor and a focused specialization were key factors in successfully going outside the business for support. Small businesses need to focus on keeping costs down while they work on development and growth. They also need to invest resources in recruiting competent labor; and then training and developing that labor. Small business owners need growth for survival; outsourcing will support that growth.
How do you grow your business without increasing your staff? How do you stay focused on your business vision and strategic plan? Managing your every-day business activities can be hard work; adding growth objectives to that day-to-day effort can be overwhelming. Hiring outsourced services can help you meet your business plan.
What is outsourcing? It is hiring outside resources to do what you can't, or don't want to, do within the business. Large scale outsourcing is becoming more common on a global basis. Businesses are trying to narrow in on their core competencies and to contract out services that don't align with their primary business. For example, a number of North American phone companies outsource call center work to India. Law firms outsource legal research to countries with lower labor costs. On a small business scale, outsourcing is about hiring services that a small business owner can't handle internally.
Outsourcing specialized services can help your business contain and minimize payroll costs, reduce the need to recruit more staff and to manage more staff, and improve your utilization of resources (people, equipment, time and money). There are excellent benefits and paybacks to contracting out services, particularly highly specialized services.
There are many functional services that can be outsourced. Here is a short list of some of the most common ones: human resources support - including recruiting, training, salary surveys, writing of job descriptions, writing of employee policies, payroll and benefits; accounting support - such as accounts receivable, accounts payable, bookkeeping, financial statements; marketing - such as specific direct marketing programs, new product launches, promotional brochures, and email campaigns; information technology support - such as vacation relief, backing up remotely, hardware maintenance, and software analysis; transportation - such as warehousing, inventory, shipping; building and grounds cleaning and maintenance; sales - such as independent sales agents or distributors; management consultants; and more.
When the cost of outsourcing grows to be significantly higher than the cost of additional staff, you will need to assess the cost/benefit relationship for outsourcing. If the work you are outsourcing is fairly broad or general, it might be time to hire full time staff. However if the work that you outsource is fairly specialized (for example, legal services, accounting services, IT services) then it might not make sense to hire a generalist to do a little bit of everything rather than a specialist who can do a lot of focused work. Whenever you make the decision to add full time staff you need to ensure that there is a cost, a time, and an effectiveness improvement in bringing the work back in-house.
There are many good reasons to outsource but the best reason is that it allows you to focus on what you do best, and to focus on what's harder to outsource (your passion for the business). Consider your strengths and weaknesses and focus your efforts on the higher impact and higher profit endeavor. Your decision to outsource needs to be balanced with what you gain or lose by outsourcing. - 31963
How do you grow your business without increasing your staff? How do you stay focused on your business vision and strategic plan? Managing your every-day business activities can be hard work; adding growth objectives to that day-to-day effort can be overwhelming. Hiring outsourced services can help you meet your business plan.
What is outsourcing? It is hiring outside resources to do what you can't, or don't want to, do within the business. Large scale outsourcing is becoming more common on a global basis. Businesses are trying to narrow in on their core competencies and to contract out services that don't align with their primary business. For example, a number of North American phone companies outsource call center work to India. Law firms outsource legal research to countries with lower labor costs. On a small business scale, outsourcing is about hiring services that a small business owner can't handle internally.
Outsourcing specialized services can help your business contain and minimize payroll costs, reduce the need to recruit more staff and to manage more staff, and improve your utilization of resources (people, equipment, time and money). There are excellent benefits and paybacks to contracting out services, particularly highly specialized services.
There are many functional services that can be outsourced. Here is a short list of some of the most common ones: human resources support - including recruiting, training, salary surveys, writing of job descriptions, writing of employee policies, payroll and benefits; accounting support - such as accounts receivable, accounts payable, bookkeeping, financial statements; marketing - such as specific direct marketing programs, new product launches, promotional brochures, and email campaigns; information technology support - such as vacation relief, backing up remotely, hardware maintenance, and software analysis; transportation - such as warehousing, inventory, shipping; building and grounds cleaning and maintenance; sales - such as independent sales agents or distributors; management consultants; and more.
When the cost of outsourcing grows to be significantly higher than the cost of additional staff, you will need to assess the cost/benefit relationship for outsourcing. If the work you are outsourcing is fairly broad or general, it might be time to hire full time staff. However if the work that you outsource is fairly specialized (for example, legal services, accounting services, IT services) then it might not make sense to hire a generalist to do a little bit of everything rather than a specialist who can do a lot of focused work. Whenever you make the decision to add full time staff you need to ensure that there is a cost, a time, and an effectiveness improvement in bringing the work back in-house.
There are many good reasons to outsource but the best reason is that it allows you to focus on what you do best, and to focus on what's harder to outsource (your passion for the business). Consider your strengths and weaknesses and focus your efforts on the higher impact and higher profit endeavor. Your decision to outsource needs to be balanced with what you gain or lose by outsourcing. - 31963
About the Author:
As a small business owner or manager, you are focused on getting, and improving, your growth. The advantages of outsourcing are significant: save money and time and improve results. And use more proven strategies and resources from the More For Small Business site to better lead your business.
