WHY DO BUSINESSES OUTSOURCE, DO THEY EVEN NEED TO.....?
I would imagine as I write this, outsourcing might be the last thing you want to think about....
Pre-coronavirus perhaps you'd mulled it over but wasn't really sure or didn't really know if outsourcing was for you and your business.
Well...the definition of outsourcing is to 'obtain a service by contract from an outside supplier'.
So, let's look at it this way....
Maybe you have a successful and thriving business but you are just pushed to the limit, you are trying to be all things to all people. Does this mean you get home late? Perhaps you don't get to put the kids to bed as you need to catch up all the time?
Or it could be that your business is a little stretched for finances and so employing someone full-time would be completely out of the question right now but you still have the same issues as in the example above.
It might help if we look at some of the reasons why some businesses outsource and what benefits you can get from doing this and we'll look at the downsides too:
1. Lower operational costs
There is no huge commitment like there is with an employee, so no overheads such as NI or pensions, holiday and sick pay etc. No office equipment or desk space needed so less of a headache for you.
2. Freeing up internal resource
If you already have internal resource then freeing up their time could be another reason, are they fighting fires instead of doing what they are good at and paid to do?
3. Talent Pool
Having an abundance of talented people to choose from. Many freelancers haven't just decided on a whim that they are going it alone with no experience in their field. Generally they are highly skilled individuals that have many years experience in their field that they bring with them.
4. Improving company focus
This is a big one. Do you spend your time on 'time consuming mundane tasks' that don't need to be done by you? Having the extra brain space to focus on your companies goals such as client work and meeting potential new clients is a much better use of your time.
So what are the downsides?
Communication is probably a key area - how do you cope with perhaps different time zones, or where the consultant/contractor is with on a particular project or maybe it makes you feel out of control...
There are some great online tools that I love which helps keep everyone, whether that's internal or external on track with status of projects or tasks. My favourites are Trello (https://trello.com/) and Asana (https://asana.com/). These are great tools with keeping you in control.
Another downside that some businesses might fear is....what if they don't perform? The beauty of outsourcing to a freelancer is that depending on their contract you just need to give them notice so no hassles.
But can you afford it? Of course we all want value for money and especially when we think we can do something ourselves, why should we pay someone else to do it?? Well for many of the reasons above might help you on this one but let's talk money.
Let's take an example of a small business that fit kitchens. Out seeing clients all the time, then perhaps fitting the kitchens and then catching up on paperwork in the evenings, at weekends and having no time for themselves or the family. They might say but £30 per hour (average) is a lot to pay someone to help them, but actually how much does it cost you to do the mundane paperwork. So it might take you 1-2 hours when it might take a highly experienced person 30 minutes - 1 hour. So what is an hour worth to this kitchen fitter? An hour with a customer might be worth a new kitchen, say £5000-£7000 so that time is much better spent with the customer/client than wasting time on the paperwork. This is just one example.
What about the health and relationship benefits to you and your family...Did you start your business to work all the hours or did you start it to enable you to have more choices and flexibility - are you getting that?
These are just some thoughts about outsourcing that I've both researched and had experience of people that question 'do I want to or need to outsource?'
If you would like more information on outsourcing and need some right hand support then this productivity Ninja will be there for you when you need it.
https://www.michellegillsonva.com/