The Many Benefits Of Outsourcing Parts Of Your Business
Outsourcing is the process of contracting an external third-party service provider to complete specific tasks within your business. Whilst this used to be mainly reserved for large companies and multinationals in the past, it is now commonplace for all types and sizes of businesses to benefit from outsourcing services.
This method is generally used when hiring new employees or assigning said tasks to existing staff is very difficult or simply not an option. In many cases, outsourcing services can be the only way to allow more time and resources to be devoted to more essential tasks within a business.
Outsourcing tasks can be occasional, like hiring a third-party accountant or firm to process your taxes once a year. These tasks can also be more frequent, such as drawing up a contract with a cleaning firm as opposed to taking on janitors as new employees.
The following are some of the many different benefits and advantages that outsourcing can provide to you and your business.
Focus More On Essential Activities
This is arguably the most significant benefit to outsourcing tasks, by doing so, you can free up the time and resources to focus most on what you are most capable of doing or what is more vital to your business. It’s far more efficient to outsource activities that may spread your workforce thin or involve significant investment; be it financial, training, hiring, or otherwise.
Say you run a start-up restaurant, for example, your expertise likely lies mainly in the actual cooking and serving of food or drink to customers. You find yourself in dire need of a comprehensive marketing scheme, the issue is that neither you nor your employees have the expertise necessary to do it properly and efficiently.
Outsourcing your marketing scheme to a dedicated marketing firm or independent marketeer gives you the chance to focus on what you do best and what your business ultimately depends on most. This same basic premise applies to all kinds of businesses, small or large and regardless of the industry they are involved in.
Free-up Your Cash Flow
By outsourcing a task, you have the ability to convert what would usually be a fixed cost into a variable cost. For example, instead of having to pay the full-time salary of an employee, you only have to pay for the specific task you wish to be carried out by the third party involved. This can help free up your cash flow, which in turn can open up previously non-existent opportunities to invest in your business.
Whether you are launching a new product, need to purchase equipment, or require extra funding to move to a new location, this newfound freed-up cash can prove to be helpful, if not vital. Additionally, freeing up your cash flow can be attractive to potential partners or investors interested in your business. Not being bound by overwhelming fixed costs allows you to be more adaptable on a short-term notice and on the long-term as well. This is especially true for start-ups and small businesses.
Reduced Human Capital Costs
Hiring and training employees are usually very time and resource-intensive, especially when it needs to be done urgently or only for a specific short-term project. Given the nature of outsourcing, turning your fixed costs into variable costs, you have much more flexibility regarding staffing. This kind of flexibility can be very difficult to achieve when all your employees are in-house, requiring a full-time salary. Say you don’t require or can’t afford a full-time bookkeeper to be employed, by searching for book keepers near you, you can ensure that you get the services offered by a full-time employee but only when you require the specific service to be carried out.
This flexibility also allows you to tailor the costs you incur to the pace of your business at any given time. When business slows or picks up, you won’t have to deal with the same constant overheads.
Access To New Knowledge & Skills
Outsourcing service providers tend to possess specialty, knowledge, experience, and expertise that can be quite difficult to obtain and maintain with in-house employees. While most in-house employees tend to stay focused on the operations and trends within your business, outsourcers tend to stay more in touch with the cutting edge of their respective industries.
This access to newfound knowledge and skills that outsourcers tend to possess, helps to ensure that any task at hand will be taken care of in the most efficient and professional manner possible. Whereas training existing staff to learn new skills and stay up to date with the times, is both time and financially intensive.
Outsourcers also tend to have experience in a variety of different contexts and situations within their field, which means they are more likely to be easily adaptable to your needs without requiring any additional training or research that would need to be invested into existing employees.
Risk Management & Continuity
High employee turnover can be an unexpected and turbulent issue within any business, causing inconsistency and uncertainty. Outsourcing can help provide increased continuity to keep your business running and mitigate the risks sub-par standards of operation and employee turnover can bring to the table.
Let’s assume, your sales manager is on leave for medical reasons and it just so happened that the assistant sales manager has decided to leave after landing a new job offer. Outsourcing your sales department’s functions will allow you to keep the business running in their absence, whilst also giving you more time to conduct a thorough search for the best new assistant you can find without the need to rush.
When considering outsourcing for your business, don’t focus solely on cost reduction or time-saving. Instead, you should focus on the overall added value to your business an outsourcer can provide through their expertise. By analyzing which outsourcers can benefit your business the most in the long run, you provide yourself with a new chance to innovate, blossom, and rise above your competition.
