Is Outsourcing a Good Idea for a Small-sized Business?
Today, we will start our article with a real-life example. When Ananya left her job at one of the reputed company to start her own dance academy, she knew from the beginning that there were specific responsibilities she didn’t want to knob. Being the dance academy owner, she wanted to focus on the core work that involves conducting training for students. She practiced what she preached from the beginning and outsourced the job of marketing to a professional digital marketer.
As entrepreneurs, letting go of the reins can be petrifying. However, the truth is we have to. The eventual objective for any business is “Growth.” It can only be achieved when you are free to focus on the things that drive the ROI. You have to put more efforts that are undeniably worth your time, which comprises of creating new products, better enabling your services, and improvising your scalability.
Designing an advertisement, handling paperwork, payroll issues, sales, IT-related problems are some of the tasks that are not worth your time as a business owner. Tasks that are out of your reach, superiorly skilled, need added expertise, repetitive in nature, or require specialized knowledge are best outsourced to outsiders for better business performance.
Why outsourcing makes sense for diverse businesses
The question arises; is outsourcing good for business? Definitely yes! The business owner has more time to concentrate on generating income when they outsource the day-to-day office tasks. But why does outsourcing make sense for small businesses? Earlier, outsourcing was seen as an option for only big businesses. But thankfully, technology has made it a more open means for small businesses and firms too.
Taking the first step headed for outsourcing can be a time-consuming process. On the other hand, once you have learned how to build your business with help from external professionals can propose improved efficiencies and economies of scale.
Relying on the nature of the business you conduct, the size of the company, the permanence of the outsourcing services, amongst other factors, there are both Pros and Cons of Outsourcing for Small Businesses.
Prudent outsourcing, though, can offer a number of long-term benefits such as:
The Decrease in Labor Expenses
The significant benefits of Outsourcing for Small Businesses are it permits you to focus your human resources where you require them. Many professionals worldwide are willing to take up a part of your business function at a comparatively lower cost than what would be charged by others. Since outsourcing work is usually based on a project or assignment basis, it saves a lot of funds that would have been incurred had a permanent employee been in place. The training cost is another factor which is reduced.
Management of Expertise Services
Outsourcing lets you get more done and rely on expert opinion for critical problem solving without having to grow your full-time team in a big way essentially. It assists to stay away from getting over-involved with tasks that can be concluded without your attention. Over time, it’s an inexpensive, established strategy for emerging your business.
Another Way Outsourcing Can Help Small Business is by increasing the performance level of the company. When the work is given on a contract basis, the idea is to convey the expectations, time frame, and goals for it at the initial stage. Thus the work gets done within a stipulated time. Since there is no need for a person who has been hired for outsourcing work to get used to the organizational culture, it’s easy for him to keep his focus only on the core job.
Leveling Up the Business Game
You may wonder, is Outsourcing a Good Idea for a Small Business? Well, the answer is, Why Not? Small firms can operate similarly to a larger firm through outsourcing. It helps them to increase their competence, economies of scale, and use expertise services to build a competitive advantage.
While outsourcing can yield immense advantages for a small company, it’s not without challenges. Below mentioned are some Cons of Outsourcing for Small Business:
Difficulty in Communication
If you prefer to work with an offshore provider, language barrier, time zones disparities, choices, and customs, internet connectivity can be tricky to deal with. There are certain limitations when it comes to adapting to the organizational culture. The outsourcing personnel may find it challenging to become accustomed to the communication system that has been set up in place.
Effect on Organizational Culture
Outsourcing may lead to a lot of confusion among the current employees who would not feel the need to hire outside personnel. There are high possibilities that they may get insecure about the job, resulting in loss of their productivity, motivation, and a negative outlook towards the company.
Losing Power Over the Operations
Once you contract out the task to the outside personnel, you let them do the work their way. The supervision will be limited or even nil if the agreement states so. In such a scenario, it isn’t easy to monitor how the work is done and if it is done properly or not. Since the person concerned is not a part of your organization, his aim would be just to finish the work allocated to him. A lack of understanding on his part to understand the objectives of your company would make it challenging for you to make changes later on if needed.
Restrictions on Multitasking
The biggest disadvantage of having outside personnel work is the limitations being place on their duty. Since they are on a contract basis, they only do the work assigned to them as per the contract. However, with full-time employees, there are no constraints on the work to be done. If the need arises, they are ready to do the work which is not in their scope. But with outsourcing, you will have to hire more people to get the work done.
So, outsourcing lets you invest your time, attention, and resources in your company’s core competencies but walk carefully so that you don’t lose more than you gain. However, in this highly competitive business world, outsourcing undoubtedly develops your ability to be responsive in changing times to handle complex and multi-faceted situations.