Is Outsourcing Viable for a Small Business?

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It is a common misconception that outsourcing is something only big companies do. What people do not realize is that the same reasons large companies use for outsourcing – reducing costs and controlling overheads – applies just as much to small businesses. If done properly, outsourcing can save you money and increase your efficiency and competitiveness. Before you start thinking about this, you need to be sure of what outsourcing is and why you should outsource.

WHAT IS OUTSOURCING?

• A common fear of outsourcing is that of handing over part of your business to an outsider. This is wrong. Outsourcing is giving some part of your non managerial work to another company to do for you, under your control.
• At no time do you lose control over your company or any of its operations. The outsource service provider is working for you, not with you. They are just a service provider, like the telephone company. How did you choose your phone company – by comparing prices, services and quality and then making your choice. You depend on your phone company to provide you with communications which is essential to your business. That does not mean the phone company is part of your operations or that you have give up control of that part of your work.
• The outsource service provider is in many ways the same – you pay and he provides you with a service but does not become part of your company or take control away from you.
• Outsourcing can take many forms and includes customer management, running sales campaigns, you name it.

WHY

• As your business grows, the work needed to be done to manage it grows in quantity and complexity. You may have started out as a one man show, but, unless you want to limit the size of your operations to just what you can do, you are going to need help.
• You have two options – either hire someone to help you out or start giving some of your work to others to do for you. Outsourcing does not mean not taking on people to work for your company. That is something that growth will always require. But you can limit the number of people you need to those who will support you in the core functions.
• You and the people working for you may conceptualize and plan out an email marketing campaign. You all know your business and know how the campaign should be run. But do you need people to implement the campaign? How much will it cost you? And what happens to these people when the campaign is over? Outsourcing is a good options because you

o Do not need to make a long term commitment
o Can budget your costs
o Will find it is cheaper
o Can free up your people for more important creative and management tasks.

• Outsourcing is not only for one time work. It can be done on an outgoing basis for work like web designing and maintenance. Do you need to employ someone just for this? Or can you contract this work to a third party who has the expertise and be cheaper? That’s outsourcing.