For many companies, the idea of expansion can seem a far-off dream, often curtailed by limited finances or the worry and responsibility of taking on more staff. However, there is a way you can expand your company and its range of products or services without taking on more full-time resources or running the risk of over-stretching your firm – namely, outsourcing.
The number of firms looking to outsource has increased exponentially in recent years, with companies finally coming to realize the considerable benefits of working with third-party suppliers for everything from adding extra services to increasing product manufacturing.
What is outsourcing?
Before thinking about what sides of your firm you should consider outsourcing, it would perhaps be an idea to clarify what the term means. As a very basic definition, a company could be considered to be outsourcing when it decides to entrust a particular part of its operations to a third-party, external firm.
Any aspect of a business that can be handled remotely can be outsourced. With today’s vastly improved IT infrastructures, faster WiFi/fiber connections, the increasing use of cloud services, and the availability of more powerful gadgets and devices, a huge range of services would have previously been handled in-house; many firms are now outsourced to external specialist firms.
Why could outsourcing make sense for your firm?
As well as the obvious advantages of expanding your staff roster without having to take on new employees, outsourcing can also bring substantial cost-saving benefits to your company. Also, if you hand parts of your firm’s operations over to third-party companies, you’ll have the option of drawing on the very best resources – but, unlike employing staff full-time, only using them as and when you need them.
Outsourcing also often allows companies to expand into totally new markets by exposing them to skills and talents they previously didn’t have in-house. In fact, this is why numerous companies use Global PEO solutions. For example, a programming company might look to hand over their design requirements to a graphic design firm to find they can then branch into front-end User Interface design, complementary web design, and development services or even adding an entirely new graphics division to their services.
There are numerous other advantages to outsourcing, including streamlining your operations, allowing expansion without risk, and removing the burden of investing in costly equipment (e.g., using cloud services for your IT network). In fact, outsourcing makes so much sense that companies are now used by companies big and small across the world and represent one of the fastest-growing sectors (a recent survey found 92% of respondent firms were looking to outsource at least part of their company operations in the future).
Areas of your firm you should look to outsourcing
As mentioned earlier, any part of a company that could be performed outside its normal premises is ripe for outsourcing; however, here are just a few of the operational services that are most commonly handed to third-party providers:
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Accounting/Finance/Payroll: Company accounts are an unfortunate (but necessary) evil for most business owners as they represent an ongoing expense that brings zero income in return. Also, as with so many other areas of companies capable of being outsourced, accounting is an operational drain on firms and can eat up time, preventing them from concentrating on more important aspects like finding new clients and growing the business. This is particularly true for smaller firms that often attempt to do accounts in-house yet frequently lack any formal skills, meaning they miss out on breaks or discounts. Indeed, virtual accounting firms like 1-800Accountant can help small ventures benefit from the same tax services that big enterprises receive, believes Michael Savage of New Canaan (CEO of the firm).
IT and networking services: With the advent of cloud computing services, more and more companies these days are handing over the digital side of their operations to specialist providers. Outsourcing IT makes good sense for firms – not only do they receive year-round, 24/7/365 support and cybersecurity protection, they also benefit from the vastly reduced overhead of not having to set up and run their own networks.
People (in whatever capacity you need them): Employing full-time staff is a headache for most companies – and an expensive one at that. Also, when you employ staff, you take on multiple responsibilities – not least of which is making sure you pay them each month, whether they’ve been busy or not. By only employing freelancers as and when you need them, you could considerably reduce your month-to-month overhead while still having additional skills on tap as and when you need them.
Customer support: Customer support is another one of those areas that many companies need, but that doesn’t bring in any revenue (at least not directly – though it could be argued they are good for reputation). Rather than potentially getting bogged down by customer support issues yourself, outsourcing could see you free up internal resources to allow you to concentrate on the more profitable parts of your business.
Marketing: The internet has immeasurably changed the world of marketing, PR, and advertising in the last thirty or so years, and customers now expect firms to be active online with everything from a corporate site to regularly updated social profiles. The truth is companies need to promote themselves effectively if they are to have any chance of development and expansion. However, marketing isn’t just time-consuming – it can also wreck a firm’s reputation if you get it wrong. So rather than trying to look after your online (and offline) marketing, you should consider outsourcing to a specialist firm.
Manufacturing: You might think that manufacturing is something that you can do in house. However, of all the functions mentioned in the article, manufacturing is something that requires the highest skills, experience and investments. A better idea to run a business would be to let an expert manufacturer take care of the manufacturing process, while you look at designing and branding the same before you sell them. A good example of the same is the leather goods industry. There are set manufacturers that follow the leather manufacturing guide and best practices. They create cut samples that are then send to the various brands. These brands employ their designers to create finished products and put their own branding on them.
One-time projects: There are multiple one-time, specialist projects you should think about outsourcing – too numerous to list here. However, as a guide, if you find yourself attempting to take on tasks where you’ve got no experience or skills in the subject at hand, this is a good sign you should think about outsourcing the work. For example, just because you (or a member of your team) have a basic understanding of web design, it’s extremely unlikely you’ll be able to produce a website to anything like the standard of a professional development firm. Moreover, like so many other aspects of work in this list that could be outsourced, you’ll also likely waste hours trying.