10 Feb Three Key Benefits of Outsourcing
Often when people hear the word outsourcing, a common reaction is to assume that it’s exclusively viable for large multinational corporations or other big businesses. While this may have been the case 30 – 40 years ago, times have certainly changed. Outsourcing is now not only viable for small business, but it’s never been more accessible, common or offered as many benefits as it does today.
Outsourcing, once distilled, simply refers to the process of utilising a third-party service provider to manage particular internal business functions. These processes can range from administration, to bookkeeping, to marketing, IT – just about anything!
In many cases, the benefits of outsourcing services are not for optimization – they’re a necessity. Often the only feasible way to grow your business, launch a product, or manage operations is to delegate certain tasks to an outside vendor. However that doesn’t mean outsourcing business processes is a burden – in fact, it offers a plethora of compelling benefits:
Focus on Core Business Processes
The strongest and most common reason businesses choose to outsource is to allow for more time, energy and focus to be spent on business processes that are ultimately the most important. It’s far more efficient to be spending your time on activities that you specialise in.
If you’re a design company, you should be designing for your clients. If you’re a financial consultant, you should be coaching your clients. If you’re an advertising agency, you should be thinking creatively. Time spent sweating over finances, payroll, HR, customer service or any other necessary, but peripheral business processes is time spent inefficiently. Core business processes are key to your success and future growth.
In fact, it’s nearly always more cost-effective to outsource everything but your core business processes. You’ll save money, avoid stress, and spend your energy working on things you specialise in. That’s good news for you, your business and your customers.
Reduced Labour Costs & Overhead Expenses
Hiring and training new staff is time consuming and expensive. When you outsource, you convert fixed labour costs into variable costs, meaning you only pay for the services you consume. This provides you staffing flexibility that simply doesn’t exist with in-house employees – seamlessly scale your consumption up or down on demand.
Bookkeeping is a great example. It’s a vital part of the business that must be managed, but there’s certainly not enough work to justify a full-time salary. Finding a skilled local bookkeeper who’s willing to work reduced hours poses a challenge – they’re likely to leave you once they find a full-time opportunity and there’s no guarantee they can work more when you have seasonal needs, e.g. tax season. By outsourcing your bookkeeping, you only pay for the particular services you require, and retain the reliability of a dedicated employee.
It’s also a savvy business decision to utilise overseas labor market arbitrage whenever possible, but hiring people in other countries can be a tricky process. When you work with an outsourcing company, they’ve done all the work for you, and are able to efficiently provide a tailored, qualified and dedicated employee for your business at a lower price point than is possible locally.
Cash Flow Control
As mentioned previously, when you outsource you’re able to convert a fixed cost into a variable cost – saving your business money. This frees up cash flow for investment in other parts of your business. Improvements could be made to products or internal systems, marketing campaigns could be implemented or upgrades could be made to workspaces.
More money to play with in the business is ultimately going to mean happier employees, happier customers and of course – a happier you.
Book your free consultation and talk to us about how outsourcing can truly benefit your business.