How Can Outsourcing Help Your Business Grow?
Outsourcing has become increasingly popular over recent years. Many businesses turn to other companies to handle their accounts and payroll processing, rather than employ a company accountant.
Large companies often transfer their call centre needs to overseas contractors where the costs are far lower. And many small business outsource website building and content writing to freelancers.
Outsourcing can help your business save money and it gives you a wide pool of talent to call on whenever you need a specialist task carried out. There are downsides of course but in general the benefits of outsourcing for small businesses outweigh any disadvantages.
Let’s take a look.
- What are the benefits of outsourcing for your small business?
- Are there any disadvantages to outsourcing for your business?
- What Kinds of Business Insurance Will You Need When Outsourcing?
What are the benefits of outsourcing for your small business?
There are numerous benefits of outsourcing for your small business.
You can’t do everything yourself when you run a small business. There are not enough hours in the day and you are unlikely to have the right skills for everything. Book keeping, accountancy, HR , social media , building your website and writing new content can all be carried out via outsourcing , leaving you time to concentrate on maintaining the efficiency of your products and services.
Outsourcing is extremely cost effective. It is far less expensive to hire staff when you need them than it is to take on permanent employees and then lay them off if you don’t need them or can’t afford them. With outsourcing you can hire the people you need and you don’t need to worry about the wages bill.
Focus on the core business
Outsourcing enables you to focus on your core business and find ways to improve and refine your own service without being caught up in areas that you don’t fully understand nor have time for.
By employing experts in their fields, you can benefit from top class professional work carried out on your behalf, without having to worry about staff training or getting involved in areas outside your expertise. Outsourced bookkeeping for small businesses is something that most small companies choose, but what about other necessary functions such as social media outsourcing for businesses or even choosing one of many HR outsourcing companies for small business?
The great point about outsourcing is that these professionals are as focused on their core business as much as you are.
Reduce Labour Costs
Outsourcing definitely reduces labour costs. It means that you don’t have to pay for full time employees or worry about the time and expense of training them. In addition you can benefit from the global market and find outsource partners from countries that have a lower wage bill. However one of the best factors of outsourcing is that your outsourcing partner should understand your project and have the skills and expertise to hit the ground running.
You don’t need to replace your staff with a team of outsource labour. It isn’t an “either or option”. However outsourcing reduces your employees’ workload so they can be more productive on key tasks creating a more streamlined environment.
Reduce short term risk
Trusting your business to a third party company, possibly on the other side of the world, does come with a risk. After all how can you know that these unknown professionals can be trusted with your data, your website, your IT or your customer services? To reduce short term risks always do your research first.
Check out the company’s feedback and see how many successful projects they have completed over the year.
Look at the company’s website. Is it crisp and functional or is it laden with typos or other mistakes? If the company’s website is sub standard, they are unlikely to be able to deliver the quality you need. Does the outsourcing company work for good quality clients?
If others have tried the outsourcing company and the results are good, they may be a good choice for you. Ask for examples of work and communicate with the company. Successful business partnerships are often based on getting along with your partners and this is the same in the virtual world of outsourcing.
Match larger competitors
Outsourcing enables you to match larger competitors. It gives you access to high quality and low cost services so even if you are a small local business , you can compete on equal terms with the major players in your industry. One of the major benefits of outsourcing for smaller companies is that it enables your business to grow, rather than be limited by issues of staffing.
When it comes to employing staff, HR outsourcing companies for small businesses can help. A specialist HR company will streamline the recruitment process and be able to find the right candidates, rather than leaving these decisions to just one person who may not fully understand what is needed for specialist positions.
So whether you are looking for social media outsourcing for small businesses, considering outsource book keeping for small businesses, outsourcing can help you match larger competitors.
Are there any disadvantages to outsourcing for your business?
There are some disadvantages to outsourcing.
You risk losing control when you farm out work to independent contractors or freelancers. This doesn’t need to be a huge issue but it is important to trust your outsourced workforce so it is important to tread carefully before you hire.
There may be a security risk if you trust yours and your customers’ data to a third party company on the other side of the world.
Quality control may be an issue. A freelancer for example will have other customers so may not be able to focus on your project as well as an in house employee.
You risk annoying your customers. Many people feel very strongly about companies which use overseas based staff. If they believe you are doing this, you could risk a backlash and loss of revenue.
If you choose the wrong outsource partners, it could cost you more money if the work is substandard and has to be put right.
What Kinds of Business Insurance Will You Need When Outsourcing?
The type of business insurance you need when outsourcing will depend upon the services that you are using.
If for example you are sub contracting your work to another company such as building or gardening it is important to bear in mind that these individuals will not be covered by your employer’s liability insurance. You should also ensure that these types of sub contractors have public liability insurance.
There can also be contractual issues when outsourcing so it may be necessary to incorporate certain clauses. These may include protection of copyright and intellectual properties, signing a non disclosure agreement, penalties for late delivery or poor workmanship.
The best way to protect your business from the risks of outsourcing is to contact your business insurance provider for more information. You may find that bespoke business insurance is the best way to protect the unique demands of your company. However in many cases if you decide to outsource your services, you are not covered by general business insurance so it makes sense to weigh up the risks before you act and to tread carefully.
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