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The Essential Guide To Business Outsourcing

By David S. Chang

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You can anything, but you can’t do everything. To grow a business, extend your influence, or to be more effective and efficient, you will need to rely on others. Good teamwork is a multiplier. Each person on a team doesn’t just add to the others’ skills, but multiplies them. When running a business, you want each person to focus on their strengths and specialties.

Outsourcing some of your core business functions can help you achieve better results. You’ll be dealing with experts, who have experience in your sector and can deliver the work you need to a high standard, and on time. Outsourcing will help you build a better business, and could pave the way for growth further down the line.

You can anything, but you can’t do everything.


Why Outsource?

One thing small business owners wish they had more of is time. Having someone else take charge of some of your work can be daunting, but you’ll soon notice the benefits when your time is freed up. Why spend hours setting up your computer systems when an IT outsourcing company can do it? Figuring out the work that will be better done elsewhere can take several areas away from you to help you focus on the bigger picture.

Outsourcing allows you to focus on main activities that only you can do. Start by creating a list of tasks that are important to your business. Then figure out how much you want to take on personally and what skills to look for in outsourcing. Using the right resources can help you exponentially. During growth periods, the back-office operations need expanding, and this can take up a lot of your resources. Outsourcing things like marketing can help you to refocus your resources in-house on the key activities.


What Should You Outsource?

There is no right or wrong when it comes to what to outsource, as it depends on your business and your preferences. There are generally two types of tasks that are usually the best to outsource. There are your typical administrative tasks, like payroll, human resources, and bookkeeping. The other are commodity tasks.

Commodity tasks are the ‘stuff’ that needs to get done. Amazon is the platform to link a seller with a buyer. Shipping that product is a commodity task. If Amazon were to do it all in-house, it would require extra 24-hour offices, which can mean higher utility bills, staff costs, office supplies, and expensive equipment. Outsourcing helps you save on those costs.

Marketing services are also commodity tasks. Outsourcing your search engine optimization services, getting a logo designed, and managed IT services are some of the top tasks that businesses outsource. These tasks are very vital yet time-consuming and require a specific expertise. It isn’t necessarily something that you need to do yourself, as it isn’t your main business or main strategy.

When you need to make your business more efficient, outsourcing can be very worthwhile. Because the overhead costs of performing a specific task can be very high, outsourcing improves efficiency. You can look at forbes.com to get some inspiration with this.

Even if in the beginning you have to do everything, the only way to scale and grow is to outsource. You may not be able to hire people that have all the skillsets you need. This is where the power of outsourcing comes in. You have to however outsource in a SMART Way, not just outsource blindly. Here are tips to help you do so!


Do Your Research

There are many firms and professionals out there that can do the task you are looking for. With technology, they don’t even have to be in the same area or time zone as you. It is important to do your research and interview multiple firms. Don’t just choose the most convenient one or the firm that pops up first on your search engine. Firms can pay to be at the top. It doesn’t necessarily mean they are good at what they do.

As you are planning out tasks and what needs to be done, have a cost and time analysis in mind. When getting bids, be clear with the potential contractors that you are interested in using. At the end of the day, you are hiring them to do a job. So once the job has been done, you need to make sure that you are happy with it.

Have them check in with you frequently. Technology can make a massive difference and can improve communication, feedback, and any changes that need to be made. Depending on the task, take the time to interview multiple firms. Tell them you are doing so so they fight for your business. You want a firm that is hungry to serve you. Ask if they have worked or currently work with companies like yours.

Ask for references and call those references. One of the best ways to predict future behavior is to see past behavior. Often firms will give you only clients they know will say good things about them. Ask them to give you references for clients that have left. Call them and see why they left.

If they refuse to do so, chances are they are hiding something. Understand that no one can make everyone happy. There will always be people that are unhappy. If there is a pattern as to why they left, then it will help you make your decision. You don’t want to find the perfect firm, you want to find the perfect firm for you.


Go for Best Value and Expertise

Depending on the task you want to outsource: marketing, bookkeeping, payroll, etc., don’t just go for the cheapest bid. Look for the best value. Often the cheapest bid means they don’t have the necessary experience or the quality won’t be as good as others or they may not be as reliable.

The best value bids are those that offer the best services relative to the price they charge. In other words, some firms may charge a high price just because of their brand name or reputation. That doesn’t necessarily translate into better services for you.

The best value firm may not be the cheapest, may not be as well-known, but offers considerable more value than both any other outsourcing firms.

Also take your time to look for specialists accredited by a professional body. That means using a CPA Firm when it comes to accounting, or HRCI or HRC firm for human resources. These organizations require certain standards to be a part of it. Often these organizations can help you find the right firm based on your needs.

IT is one of the top areas businesses outsource. It requires a specific skill-set, and with the increase of hackers, it is important to have effective and secure IT systems. Business technology consultants can help you create the right infrastructure for your business.

Improper management of your IT infrastructure can leave you vulnerable to cyber attacks, inefficient processes, and the inability to properly manage data. Saving a few dollars with a less experienced tech company can cost you significantly more in the long-run.


Be Clear with Deadlines and Expectations

When outsourcing you or your managers may have a false sense of security that they can forget about the task until it’s completed. Unless you and firm have worked with each other for a long period of time, the firm may not know what you expect. Remember the firm you hired works for you.

To ensure that they are meeting your standards, give them clear expectations on what your intent and endstate looks like, as well as any deadlines. Especially with payroll and accounting, people and the government have to get paid on a timely manner.

If not, they may complete a task to their standard but not yours. You will have to pay them regardless. If you are upfront with the expectations and offer guidance along the way, then there is no excuse if they do not meet the standards you set.

When successfully outsourcing a project, you must be able to communicate your business’s s needs as clearly as possible to the people you are working with. 

Don’t assume anything. Don’t forget to ask how they will charge. If you ask for a revision or for a change, is that included in the cost? Or is it extra? This will prevent any mishaps on budget overruns or extra charges not expected.


Do the Right Things Right 

One of the significant advantages of outsourcing work is that it can free up time of your employees. Make sure this time they gain is used effectively and efficiently. Or else you will essentially be paying double for the same work.

As a business owner or manager, there are only a few things that you can do. Focus on doing those “right” things – the tasks that have a direct and measurable positive effect on your business. 

Need help figuring out what the right things are? If you are involved in international business, trade advisors can help you understand international trading laws, and how to grow your business overseas.

Without the correct knowledge, it can be so easy to face fines, make cultural mistakes that could have been avoided, and inadvertently violate local laws. The right people, can teach you the right things.


Feedback Mechanisms

Work with the firm to check-in with you periodically for feedback and evaluations on their work. They may not get it right the first time. The only way they can improve is by getting valuable feedback from you.

Don’t wait until the end until most of the project has been done. By then it may be too late. Working with them closely and frequently collaborating with them will save you time and money!

David S. Chang

Award-Winning Entrepreneur, Wealth Manager and CEO | Chief Editor, Author, Keynote Speaker, Consultant ArtofThinkingSmart.com | Political Consultant | Army Officer National Guard | Living To Fulfill Needs, Solve Problems, and Live Passionately!

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