The advantages of outsourcing for small businesses are significant. Hiring outsourced resources can help your business grow. A review of the history of outsourcing shows that business owners are able to lower their labor costs and contract specialists in functional business processes. In today’s economic environment, all businesses are looking to contain costs yet improve services; outsourcing can help them achieve those objectives. Small businesses are also looking at outsourced services to help their business growth.
How to manage your small business for business growth without increasing your employees? How to keep focused on your defined business scope and manage the day-to-day business activities? Outsource needs that you can’t meet from within the business.
Outsourcing is about hiring outside resources or specialists to do what you can’t, or don’t want to, do yourself. You might not have the skills, experience or education to do everything that needs to get done. Or you might need more help than your existing staff can provide. For example, you might want to do a telemarketing blitz for the introduction of your new product. You don’t have the internal resources to do it efficiently, so you hire a call center in Las Vegas to do the calling. Or you might be able to do the business accounting yourself but you don’t have time in your day, so you outsource the bookkeeping.
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.
Keep track of your expenses on outsourced services and recognize when it’s more cost effect to transition from outsourced services to a full time employee. Although you do need to analyze when your business needs more of a specialist; as compared to a generalist. For example, if you need a specific direct mail campaign to announce or launch a new product or service, it might be more cost effective to hire a specialist in the field; rather than have your marketing coordinator (who does not specialize in direct mail) handle it. Your marketing coordinator’s efforts might take twice as long and not include some of the ‘best of breed’ measurement tools.
There are a number of excellent reasons to outsource. The best reason to outsource is that by outsourcing you can focus on what you do best. Hopefully your best includes running your business; sometimes it doesn’t - if that’s the case recognize what your strengths are and outsource areas where you are weak - you don’t always have time to invest in learning and minimizing weaknesses. Always balance the decision to hire or to outsource against what you might lose or gain (money, results, time, etc.).
As a small business owner or manager, your goal is business success. The advantages of outsourcing will help you achieve that goal by saving time and money, focusing on your strengths and weaknesses and improving results. Find more proven strategies and resources from the More For Small Business site to better manage your business.
categories: advantages of outsourcing,history of outsourcing,outsource legal research,direct marketing campaign,business vision,outsourced services,benefits,management,marketing,accounting,bookkeeping,human resources,small business,management