Entrepreneurs have long seen outsourcing as a strategy reserved for big business, but technology has made it a more accessible tool for small and medium sized businesses – and for some small firms outsourcing has made a powerful impact on their growth, productivity and bottom lines.
What to outsource
You may already be outsourcing, or considering outsourcing, some business tasks such as payroll administration. These days, almost any task can be outsourced, with so many qualified professionals leaving the corporate world to work as freelancers or contractors. However just because you can outsource a task doesn’t mean you should. Sometimes there are things you don’t want to do but which are important to your core business. Outsourcing any aspect of these tasks would be a big mistake because you would cease to offer anything that your own customers couldn’t get elsewhere.
The types of tasks that are best outsourced fall into three general categories:
• Highly skilled, or executive, expertise – for example you may not need to pay a Finance Director’s salary, but you could have an FD-level person to come in a few times a month to provide financial analysis and ensure that bookkeeping and other finance-related tasks are being handled well.
• Highly repetitive tasks – accounts payable and data entry fall into this category
• Specialised knowledge – this may cover IT support and expertise
Place value on outcomes as opposed to hours, and only look to transition to a fixed-cost retainer agreement once you’re confident in their ability to consistently deliver.
When to outsource
For very small businesses outsourcing may be an optimal solution from the very beginning.
Firstly, identify exactly what performance metrics are important for each task you want to outsource. Some outsourcing providers focus on speed at the expense of quality or vice versa. This is fine as long as there is a good match between what the business wants and what the provider specialises in. But many small businesses don’t realise that there are large differences among outsourcing providers and select the wrong ones. An open and clear conversation with potential contractors regarding these key performance metrics is essential. Use incentives to motivate the outsourcer to focus on what is most important to you rather than their own preferences or their assumptions about what you want.
How to outsource
Communicate your expectations and the steps included in the job clearly; never assume that contractors are thinking what you’re thinking. There is a learning curve on the provider’s side – hang in there and give the provider time as they will get better, and you will get the freedom to focus on more important tasks.
While outsourcing can yield great advantages for a small company, it’s not without challenges. If you choose to work with offshore providers, language barriers and time-zones can be difficult to deal with. Focus on making your communications clear can help overcome confusion for those who are not native English speakers. Time-zones can create more opportunity than inconvenience, as you can extend your productive hours by handing tasks over to someone during their working day. Assign a task at night and awake to find it complete and waiting for you in the morning.
There are security risks involved when handing tasks over to an outsourced provider. Only provide the outsourced service provider with the absolute minimum data necessary for the provider to do its work.
Reaping the benefits
Although there are risks, outsourcing ultimately offers business owners great advantages. The process allows you to build a team of skilled professionals without adding the expense of full-time employees, and to avoid getting bogged down with tasks that can be completed without your attention. It offers an affordable, proven strategy for growing your business without letting it take over your life.
Handling off work forces you to objectively, ruthlessly and systematically consider your activities and the steps taken to perform them.
By defining a process, inefficiency is flushed out.
When you outsource, you can focus your time, attention and resources on your company’s core competencies and spend your time setting new goals and finding ways to achieve them. Step back, relinquish control and allow your new team members to do what you’ve hired them to do.
Taking the first steps toward outsourcing can be time-consuming but figuring out how to build your business with help from outside professionals can offer increased efficiencies and economies of scale.
If you are interested in exploring outsourcing for your business, please contact Elly Rose on firstname.lastname@example.org