Outsourcing Tips For Small Businesses

Outsourcing Your Workload:

As a small business, you may not yet have the manpower to handle a steadily increasing workload. Growth is good, but if the work suffers because you are taking on more than you can handle, than you might quickly see that growth diminish because of unsatisfied customers. One solution to this dilemma is to hire more employees, but if that isn’t feasible, outsourcing is always an option.

You may initially be wary of the costs associated with outsourcing specific areas of your business. After all, instead of keeping your full share of the profit, you’ll be handing a large percentage of it to another business. In these situations, try not to think of outsourcing as losing money. Instead, realize that you are still gaining income that might otherwise have been turned down completely due to a large workload. Additionally, outsourcing some of your workload allows you to focus properly on each client without rushing, and completing services efficiently and with care will in turn result in future business from satisfied customers.

When outsourcing some of your workload, you want to be able to trust the supplier you’ll be working with. Remember, anyone who specializes in the same services you do is technically a competitor. However, friendly competition based on a mutual trust and understanding is possible. If you can manage to build a relationship with a competitor in which you can work together, then you might find that they will occasionally farm business to you as well. Being mindful of each other’s clients is of critical importance here: in a relationship such as this, you do not want to attempt to steal their customers, nor should they attempt to attract yours.

Generally, you want to avoid outsourcing to your competition whenever possible, but if it means possibly losing a valuable client, then it may ultimately be necessary.

Outsourcing For Your Small Business Needs:

The main reason for outsourcing is to cut costs and maximize your ROI. Rather than hiring a full task force to cover all aspects of your business, you can outsource everything from payroll distribution, customer support, tech support, marketing, equipment maintenance and repair, accounting, and more.

Outsourcing allows you to quickly have a supplier on hand who can provide expert support without having to hire workers. You also have the ability to choose from different suppliers for various outsourced services, so that you can find one you are ultimately comfortable with in both service and cost.

Choosing an Outsource Supplier:

When researching suppliers for outsourcing, don’t just choose the supplier with the most competitive rates. They may be attractive from a capital standpoint, but you may also be receiving a lower quality of service. You need to focus on several important criteria besides price. How long have they been in business, what are their credentials, do they offer a guarantee of service, what is their availability, and what type of support will they provide? If the outsourced business is technology based, do they have the most updated equipment and software?

You might also want to ask about some of their other clients, and seek reviews and testimonials regarding their services. Additionally, make sure the suppliers know what it is you’ll expect from them. Get a feeling of the supplier’s limitations so that you can better gauge if they are right for your business. A clear understanding of the services that will be required, and their level of proficiency in delivering those services to your expectations will enable your dealings with the supplier to run more smoothly, subsequently allowing you to devote more time and focus to other aspects of your business.

You’ll also need to determine how much of your budget you’ll allocate to outsourcing. You’ll probably want to have extra funds in the budget to cover unexpected costs such as short-term projects or additional services needed. To determine what types of suppliers you’ll need, you will need to identify what services can be done in-house, such as your critical, core business functions, and which can be handled by a supplier. In time, you may exhibit enough growth that you move some outsourced services in-house, but after your initial startup, you want to save money where you can until you begin to generate a positive revenue flow.

Additional Benefits of Outsourcing:

Outsourcing allows you to spend more time on your core business functions, as well as building your client base and promoting your services. You can better prioritize your own tasks and those of your employees, which results in increased efficiency and productivity.

You can also compete with other businesses that may offer additional services along with those that compete directly with the services you offer. By utilizing outsourcing, you can also offer additional support and add access the same playing field of larger companies.