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Effective Tips for Outsourcing Work to Drive Growth

Effective Tips for Outsourcing Work to Drive Growth
Credit: Photon photo / Shutterstock

Are you outsourcing part of your business? If so, you're not alone. The 2018 Deloitte Global Outsourcing Survey found that businesses of all sizes are outsourcing core business functions to disrupt the market, improve their efficiency and better serve customers.

For small businesses, hiring contractors can be the key to growth, especially when you don't have the option or ability to bring on a full-time employee. But it can also be a stressful process for small business owners, whose businesses are intensely personal.

If you're planning to outsource work from your small business this year, follow these tips to make the transition smooth, productive and profitable.

It can be hard for small business owners to let go of any aspect of their business. But wearing every hat in your business – marketing, copywriting, bookkeeping, client pitches, public relations – might not be the best use of your time and money.

If keeping up with daily minutiae, such as posting on social media or answering every email that arrives, keeps you from big-picture work, it can hinder the growth of your business. Likewise, if you don't have the skill necessary for important tasks like filing your taxes or writing your website copy, the time you spend struggling to complete them might be better spent on another part of your business that brings in new revenue.

In these instances, outsourcing may cost you money, but it can give you back valuable time that allows you to focus on growing your business. If you know your own average hourly rate, you can judge whether the amount of time you spend on tasks that can be outsourced is worth it – or if your time can be better spent elsewhere while an expert takes that particular slice of work off your plate.

Even if you already have employees in your small business, you may find that it still makes more sense to outsource some work. The Deloitte survey found that IT functions are the most commonly outsourced, along with tax accounting and other financial matters. These tasks require specific skill sets that your employees may not have. Rather than hiring a new employee and paying a regular salary, along with associated expenses like payroll taxes, the best use of your small business's time and money may be to outsource the work to a dedicated professional when necessary.

Business owners have a variety of concerns about outsourcing. The Deloitte survey found that the most common one is whether customers' and their own data is kept secure, while the third most common concern is that vendors comply with any necessary laws and regulations.

With the passage of laws like the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA), businesses of all sizes are on the hook for how they handle customers' data and online information. There are also various local, state and federal laws that impact how you run your business, such as minimum wage policies and federal tax statutes.

These laws don't care who is doing the work – whether you are outsourcing or handling it in-house, your small business is ultimately responsible for what happens. This may impact which tasks you decide to outsource. You may choose to be the only one handling customers' data, do all website updates yourself or keep strict control of production. You may be comfortable outsourcing every stage of the process. Whichever route you choose, remember that, as the owner, you are ultimately responsible for understanding and complying with all the laws that regulate your business.

When choosing a person or company to take on outsourced work, consider the partnership you are entering into just as carefully as you would choose a new employee.

Whether looking for a bookkeeper, copywriter or any other expert, many small business owners fall into the trap of going with the first option they find. But the Deloitte survey found that the No. 1 thing companies that outsourced want to do differently next year is spend more time on their service provider selections.

Rather than rushing into a business relationship, treat outsourcing like a partnership. Research your options. Carefully consider who you are working with and what impact that partnership could have on your business.

Among the businesses that Deloitte surveyed, 35 percent didn't expect outsourcing to lower their costs, while another 32 percent expected that outsourcing would lower their operating costs by less than 10 percent. Only 9 percent of companies expected that outsourcing would lower their costs by more than 30 percent. But even the companies that predicted higher costs still expected that outsourcing would be worth it.

Even if outsourcing increases your monthly or yearly expenses, it can create opportunities for growth that wasn't previously possible, allowing you to increase your profits, grow your business and pursue new opportunities that you couldn't when your time was being taken up with lower-level work. In many instances, outsourcing pays for itself over time, even if it initially increases your operating costs.

For a small business operating on a strict budget, cost may still play a large role in whom you choose to outsource work to. But it shouldn't be the only consideration. There are many factors in addition to cost that should impact who you partner with, including the following:

  • Reputation of the provider
  • Scope of services available
  • Speed of service
  • Experience and skill level
  • Portfolio or work history
  • Fit with your company priorities and goals
  • Ease of working together

Not all of these factors will hold equal weight in your decision. In some cases, you may find that the cheapest option for outsourcing provides the service you are looking for. Other times, you may find that it's impossible to find a skilled partner who understands data security and legal regulations, is easy to communicate with, and completes work on time for bottom-dollar prices.

In outsourcing, as in every other aspects of business, you are likely to get what you pay for.

Not sure where to begin? Check out these other Business News Daily resources on the best things to outsource and where to get started.

Katharine Paljug

Katharine Paljug is a freelance content creator and editor who writes for and about small businesses. In addition to Business News Daily, her articles can be found on Your Care Everywhere, She Knows, and YFS Magazine. Visit her website to access her free library of resources for small business owners.