“Outsourcing” definitely has some negative connotations. It makes one think of jobs being lost in your own country and suppression of local wages for cheaper labor elsewhere.
But “outsourcing” in the broader sense really refers to any service that is done offsite by someone who is not your employee. This could range from a single freelancer who writes the content for your website, to a logistics firm that handles all your warehousing and shipping.
Outsourcing is certainly not new and not, as some believe, only for large businesses. In fact, for decades, many smaller businesses have hired experts like lawyers and accountants to handle taxes, payroll and legal services because it made good sense. And small businesses today seem willing to outsource even more services to those outside their companies.
In a recent survey by readers of Inc. magazine, 64% of small and midsized businesses said they practice outsourcing, with legal services ranking the highest outsourced function by 82% of those surveyed; followed by taxes and accounting, 79%; advertising and marketing, 64%; data management, 61%; logistics and distribution, 60%; payroll, 59%; manufacturing, 54%; fleet management, 51%; engineering, 48%; and research and development, 43%.
So how do you know when out-sourcing is a good choice for your business? Here are some tips to help you figure this out:
• Focus Your Time on What You Do Well – One good rule of thumb to follow when deciding whether or not to outsource is to devote as much of your time as possible to what you do best; then outsource those tasks outside your realm of expertise that take up a lot of your time, but could be done affordably, faster and sometimes even better by someone else.
• Outsource Tasks that Are Better Left to Experts – When deciding what jobs to outsource, remember that it could save you time and money in the long run by leaving certain jobs to the experts – like handling your payroll or your taxes, for example. It takes a long time to learn all the rules, regulations and laws, and if these jobs aren’t performed correctly, you could have legal problems down the road.
• Outsource when You Can’t Afford a Staffer – If you want to have a better website, or improve your marketing, but can’t afford to hire a full-time or even a part-time staff person to do it, consider outsourcing. While you may already have an employee on hand who is willing to take on the extra load, in most cases it will pay off in the long run to hire a professional with expertise.
• Can You Find Someone ualified to Do the Work Affordably? – With the Internet, virtual meeting software, and other modern technology, you are no longer limited to contract workers just in your area. You now have a much larger pool of persons from which to find someone qualified to do the task you want to outsource.
• Consider the Costs – When looking to outsource, it’s also a good idea to compare the costs of handling the job in-house or hiring it out to someone else to figure out what is most cost-effective.
