Benefits of Outsourcing

January 28, 2015 by Ed Becker

What is outsourcing?

Outsourcing is the allocation of processes or tasks to an external person or company that does not share an interest in your company. Usually outsourced work is on a contracted basis for very specific or expert tasks. There is often a stigma associated with outsourcing which sometimes causes companies to delay outsourcing when it could actually benefit them. Outsourcing can be temporary or long-term, and in some cases, more cost efficient than hiring in-house.

What tasks CAN you outsource?

Many processes are easily outsourced because they are functional as cloud based tasks or because they can be done remotely. Many small businesses have tasks that require expert knowledge on a part time or as needed basis.

• Human resources- This can be just recruiting or it can full blown human resources functions.
• Bookkeeping/Accounting- You can hire for daily data entry of transactions to complete full charge bookkeeping and accountant functions.
• Payroll- Many companies, small and large, outsource their payroll functions. That is why there are companies such as ADP. But you do not have to use a huge professional service to outsource your payroll, as it can be a freelancer or a local accounting office.
• Customer service- Outsourcing your customer service allows you to provide high quality services without having a brick and mortar call center. And if you outsource in different time zones you could possibly have 24 hour customer service at a very reasonable price.
• Administrative Assistance- There are many tasks and functions that an assistant can take care of to free your time and allow you to focus on sales and cash flow.
• Marketing- If you have a shoestring budget or a large marketing budget, it can benefit your business to have professional marketing personnel spending it in the most effective means possible.

Advantages of outsourcing

• Focus on business and sales

  Outsourcing some of the processes that small business owners usually complete allows for them to focus on the running of the business and sales.

• Time factors

  Small business owners simply do not have enough time when the business is growing to complete everything in a timely manner. Or to learn new skills in order to complete them professionally.

• Reduced costs, increased cash flow

  Outsourcing saves costs because the tasks are done as needed. It also saves the cost of employee expenses and training costs. This directly increases cash flow.

• Expertise and knowledge base

  Outsourcing tasks that you are not an expert in makes sense. You receive professional results without hiring a full time experienced employee.

• Time zone and holiday schedule

  Using global outsourcing can offer your customers round the clock live contact with a person, during hours and holidays that you are not open.

• Contract workers

  Contracted or freelance workers are more cost effective than employees. There is no employee expenses, no training, and not wasted labor hours. They work on specific tasks and only are paid for that time.

• No investment in new technology or equipment

  If you have processes that require updated or new technology or equipment you could outsource and not have to make large purchases. Another way that directly increases cash flow.

Outsourcing can be great for many small businesses. It can be very positive for your small business, and it could be the best decision you make to promote company growth, increase cash flow, and reduce costs. Many businesses outsource on a regular basis, daily, or full time basis because of these reasons.