Why Your Small Business Needs to be Smart About Outsourcing

Jock Purtle

by Jock Purtle

Outsourcing represents an opportunity for you to reshape your company to be more successful. It can help you ease your workload and cut costs, both important to the short- and long-term health of your company.

But for this to work, you need to be smart about the way you outsource. Simply doing it doesn’t guarantee results. You need to be sure what you’re outsourcing is not something you could do better or more cheaply on your own, and you also need to be sure you’re working with reputable firms.

To give you a better idea as to how you should be approaching outsourcing and how it can affect your business, consider the following points about making smart use of this practice.

It Can Help You Grow

A properly designed outsourcing strategy can actually help you grow your business. However, this can only happen if you make smart choices about what you outsource.

For example, outsource those things you can’t do on your own. This ends up being a big reason why many companies choose to outsource things such as marketing, or HR functions such as benefits management. It’s difficult to find people who are able to do this stuff at a high level, so it’s better to go out and work with an agency that’s specialized in these fields and that has experience producing results.

Take a look at the current structure of your business and identify areas where you could be doing better. Then ask yourself what it would cost to produce these improvements from within. If this is more than what it would cost to work with an agency, then outsourcing is going to be a smart move that should help you improve the performance of your company.

Other Forms of Outsourcing

While we tend to think of outsourcing as giving work to other people, there are other ways to outsource. For example, automation is essentially just outsourcing to computers or machines that can do the job cheaply or more efficiently.

Again, marketing is a good area for you to do this. Setting up lead capturing forms, or automating drip email campaigns, help to optimize your marketing operation and generate more leads you can use to turn into sales.

Being smart about outsourcing means making use of the right solutions at the right time. And if you succeed in doing this, then you’re far more likely to reap the benefits of outsourcing.

It Can Help You Save Money

Smart outsourcing can lead to tremendous cost savings, reducing overhead and helping to make your company more profitable. But to get to this point, you need to spend some time working out exactly how outsourcing is going to save you money. And for this, you’ll need to familiarize yourself with how to do an accurate cost-benefit analysis.

Focus on outsourcing wherever there are large infrastructure costs, as it rarely pays for you to take these on yourself. For example, IT and cybersecurity are critical to the success of your business, but they are incredibly costly to manage on your own. Outsourcing this task to an external firm allows you to share these infrastructure costs with other businesses, reducing the burden on your company and increasing your cost savings.

Not All Agencies Are the Same

The final reason it’s so important to outsource smartly is that not all agencies are the same. Well, they’re the same in that they are all going to promise the best results. But they’re not the same in that they cannot all deliver on these promises in the same way.

As a result, you need to develop a good process for finding and choosing third-party vendors. Start by putting together a request for proposals (RFP), and send this out to firms that interest you. Make sure you specify what you’re hoping to get out of the relationship and be clear about the resources you’re willing to invest. Then, when you get responses, make sure to dig deep into the proposals to determine the realistic chance of accomplishing what’s being promised to you.

But the next step is to do your homework on the firm. Ask around to find out if anyone has worked with them before and what they’re experience was, and also spend some time reading testimonials and other reviews so that you can be sure you’re working with someone who is capable of using your money to produce the desired result.

Make Outsourcing a Part of the Plan

You will outsource at some point in your business’ lifetime. So, the important thing is to have a plan for it. Start thinking about what you’ll outsource and when so that when the time comes you can be ready to engage with firms and make your company more successful in both the short- and long-term.

Jock Purtle

by Jock Purtle Digital Exits

Jock is the founder of Digital Exits, an online brokerage service specializing in the buying/selling and appraisal of online business. His work consists of consulting small business owners about business growth and exit strategies, which has given him considerable experience with what makes a business successful, something he enjoys sharing whenever he gets the chance.

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