General Findings
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 do you meet your business plan objectives when you are too busy managing the day-to-day activities to even review the plan? How do you grow your business without adding new employees? How do you keep your daily activities moving forward and in alignment with your business vision? Outsourced services can provide specialized resources to your 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.
Some of the advantages of outsourcing include containing payroll costs, minimizing your recruiting efforts, having fewer internal employees to managing, and improved utilization of dollars (you can hire specialists in the field on short term contracts). Often the most significant advantage is in the cost/benefit relationship. Contracting for a specific service or project is often the most cost effective solution.
There are many outsourced services that you can consider for your business; who you work with is really dependent on the strengths and weaknesses of your business. Some of the services include: office administration support – virtual, online assistants; website marketing specialists; independent sales agents; contract trucking companies; information technology companies providing hardware maintenance support; legal services and support; accounting and finance support; help desk and call center support; independent warranty centers; human resources support; and much 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.
As a small business owner or manager, you are focused on getting, and improving, your success. 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.
Tags: Accounting, advantages of outsourcing, benefits, bookkeeping, business vision, direct marketing campaign, history of outsourcing, human resources, management, Marketing, outsource legal research, outsourced services, small business
Posted in Accounting · November 9th, 2009 · Comments (0)