Outsourcing is the concept of paying other people/companies to do work for your business instead of doing it in-house. It’s extremely popular amongst small business owners - particularly those with home businesses and not enough room or resources for full-time employees. When done correctly, it can help you save a lot of money and streamlines your business processes.
Having said that, if it’s not done correctly, then it can have the opposite effect. There’s every chance you can start spending too much money on outsourcing and slowing down your business. This fear puts a lot of people off the idea - but you shouldn’t avoid it!
In general, outsourcing is beneficial. You just need to know what to do - and what not to do. On that note, here are the dos and don’ts of outsourcing that you should apply to your business:
Do: Work out the costs
Most companies outsource because it’s supposed to be cheaper. In the majority of situations, it will be. However, you still need to add up the costs before you choose to do this. Think about how much it will cost to outsource a service to a provider. Typically, this is easy to figure out as they will provide you with a quote for the service. Then, look at your alternatives. Calculate if it will cost more to handle things yourself or to hire someone full-time.
Sometimes, it might be cheaper to avoid outsourcing. How? Well, you might have knowledge of the service, so you can do it all for free. Or, you may have an employee with existing talents that can handle the job for a smaller fee - or for no fee at all. A good example of this is if you need graphic design work for your website or an advertising campaign. It’s natural to think about outsourcing, but you may have someone working in your team that’s got a graphic design degree or does this sort of thing in their spare time. In which case, you could save money by going to them instead of outsourcing.
Don’t: Outsource everything
It’s tempting to start outsourcing everything in your business. Normally, this happens when you outsource a service and are amazed by the results. You look at the facts and realize that you saved so much money by outsourcing, and you ended up with an incredible service. So, you wonder why you bother having full-time employees at all. You could just pay other companies to do their work for a much lower fee!
Unfortunately, it doesn’t work like that. Some jobs are better when kept in-house. If you start outsourcing everything, then you increase the waiting times for different things, and you make communication a lot harder. The best way to look at it is to think about what jobs are essential. Who can you not do without? People that work closely with you will fall into this category - like assistants or receptionists. Sales teams will always fall into this category as they know your business best, and they have relationships with customers and leads. But, other things like marketing and accounting or HR can be done by other businesses or individuals away from your premises. So, these services are the best ones to outsource.
If you outsource too many jobs, you end up with an unstructured business that’s unproductive and doomed to fail.
Do: Try and find companies that provide multiple services
When you outsource, try and find companies or individuals that can do more than one thing for you. If you look at the Timmermann Group website, you’ll see how some marketing agencies can handle all types of jobs. This is beneficial as it means you only have to pay one company to do everything from SEO to web design. The more services one company can provide, the better.
It’s all about ease-of-access for your business. Outsourcing five different companies for five different elements of your marketing strategy is madness. Similarly, working with multiple firms to deal with your finances is laughable. You want to try and keep things as condensed as possible. Why? Because it’s usually cheaper, and because it makes it much easier to communicate with your providers. You only have one company to deal with instead of five. This speeds up efficiency and makes everything more productive.
Don’t: Outsource to anyone
Another big advantage of outsourcing is that it minimizes hiring costs and reduces time spent looking for new hires. This is 100% true, it will cost your business far less money to actually outsource rather than hiring an employee. It’s all to do with the lack of benefits required, but also the lack of money being spent advertising the job, setting up interviews, and so on. In turn, the fact you don’t need to interview candidates or go through applications means you can outsource a lot quicker.
Unfortunately, this leads to a common mistake; hiring any old company. You’ve still got to do some research to ensure that you find the best business to outsource your services to. Spend time collecting a shortlist of potential providers and compare them with one another. The main things you’re looking for are the services available, experience, qualifications, and price. Then, be sure to check for any reviews or testimonials - these are the best ways of finding out how good a provider is. If the reviews are positive - and they have way more than the other companies you’re considering - then they should be the one for you.
Do: Provide as much information and guidance as possible
A common misconception about outsourcing is that the company you outsource to will know everything they need to know. Technically, they should have a vast understanding of the field they’re experts in. But, unless they’re psychic, they won’t know everything about your business or your specific industry. This is especially relevant if you have a very niche business that targets a precise market.
So, if you provide them with hardly any information and expect them to figure it out on their own, then you’re asking for trouble. Don’t be annoyed when they provide you with a service that doesn’t meet your expectations. Or, don’t be irritated if they keep coming back and asking lots of questions. You have to give them all the details they need to provide the best service for your business.
Don’t: Switch too often
If you are outsourcing, then you shouldn’t treat it like car insurance or a phone bill. When the contract is up, you may be tempted to look around for a better deal. But think about it logically. You’d need to spend time looking for a new provider, then you’d have to go through all the steps of introducing yourself, talking about the service you’re after, giving them information on your business, etc.
It takes up a lot of time when you’re better of sticking with your current provider. They know you, they know your business, and you know they do an excellent job. So, stick with them and you might even get loyalty benefits! You should only switch if you’re not happy with the quality of service you’re receiving.
There we have it, the dos and don’ts of outsourcing. Can this idea benefit you? Absolutely. Especially if you’re short on cash and want to grow your business. The way you approach and use advertising will ultimately decide if it’s successful or not. Luckily, you can increase your chances of success by following all of the advice laid out in the article above.