Whether you run a small business that only employs a handful of staff members or one that is significantly larger, there are a number of benefits you can receive by the process of outsourcing. For those not in the know, outsourcing involves delegating parts of your business out to third parties or other external agencies.
With the unstoppable rise of technology, this is no longer restricted to just companies that are located nearby, but now the whole world has opened up like never before. Technology means that you can work with various partner organisations all across the globe at the drop of a hat.
Whether you are just looking to outsource one particular area of the business, or a number of different services, here are just some of the benefits your company can receive from outsourcing.
- Lower Costs
Rather than investing huge amounts of money in a whole marketing department for example, it is likely to be significantly cheaper if you employ the service of a marketing agency to handle everything for you. Your marketing agency will probably have a number of people working on your account, from a senior account manager all the way down to marketing assistants. On the other hand, the cost of employing all of these people yourself is likely to be sky high.
Some countries have much lower average wages, which means that their costs are way lower than yours are likely to be. Not only this, you don’t have to consider the range of different costs associated with bringing on a new member of the team like pension contributions or insurance packages.
Before employing an agency you should always shop around to get a good deal. Not only this, you should also choose any agency that specialises in your particular field. For example, if you run a sports business, there are likely to be a whole host of sports marketing businesses out there that will have inside knowledge. Many of the ‘jack of all trade’ agencies are likely to be not as effective.
- Distance is No Longer An Issue
As I’ve already mentioned, distance is no longer that much of a factor, particularly if you are looking to outsource an online service. For example, if you are looking to invest in outsourced IT services, the world is your oyster. As well as this, IT is an area that requires people with a very particular skill set. Your outsourced agency will have taken the time to recruit people with the skills that your business needs, saving you valuable time and resources.
Unlike recruitment, which involves only being able to search within a short radius of your office, distance is no longer the barrier it once was. As well as this, recruiting the right member of staff who has a particular skill set can take a huge amount of time and energy. Finding an agency to outsource your work to is usually a more straightforward process.
New communication tools are springing up all the time which means you should easily be able to stay in touch with your external agencies. As well as this, the rise of smartphones makes emailing at all hours much simpler. You can also hold video conferences through software such as Skype. It may also work out as being more cost-effective if you outsource your business needs abroad, which is why so many companies have their call centres in countries such as India.
- Time to Focus
If you try to keep all parts of your business in-house, this may prove to be a major distraction and you could end up spreading yourself too thin. Instead, give yourself time to focus on what you do best by outsourcing parts of the company. Sure, you’ll need to keep on top of what your agency is doing for you on a regular basis, but you won’t need to be checking up on them day in, day out.
It’s best to keep one point of contact between your own business and the company you are working with. Once you have worked with that agency for a number of months, you will begin to develop a sense of trust in them and less of your time will be spend monitoring what they are doing. This will probably end up being a better way of working for both you and them.
- Free Up Internal Resources
A similar point, but one that is still important, there’s no point having your own staff doing jobs that are not suited to their specific skill set. While it’s great to have a team who are willing to learn and develop new skills, a team works best when everyone has their own specific area to focus on. Your outsourced agency will act as another team member, and they will have their own responsibilities. Your business will run much more efficiently in this way, and your current employees will work better with some jobs that have been taken off their plates.
- You’re In Expert Hands
If you use a dedicated public relations agency, PR is what they eat, sleep and breathe. They’ve been there, done it and got the t-shirt. They’ve even heard all the cliches like the two I just used! This means that you’ve handed over a part of your business to experts in the field. Sure, you could try to get involved in public relations yourself, but you may end up relying on Google for the support you need. The fact that you are working with the experts is likely to end up giving you a natural advantage over your competitors who are still trying to do everything themselves.
The other major advantage is that you can learn about the particular industry directly from what they are doing. Stay in regular contact with them to find out what they are doing and why they are doing it. All of these skills may come in handy at a later date if you choose to take on this part of the business yourself.
Many companies only outsource for a short period of time on a particular project. For example, you may employ the services of a graphic design or branding company to give your business a complete rebrand. This means you will only work with them on a short term basis until the completion of the work.
Many other agencies work on the basis of a rolling contract, so you can review every few months, giving you the option to change if you are not happy with the way things are going. If you find that your business isn’t performing as well as you thought, it is much easier to lose an outsourced agency than a permanent member of staff. This means you are much less likely to find yourself in a hole if your business has overstretched itself. On the other side of the coin, if things are going well, you can either consider outsourcing other areas of the business, or increase the amount of work your current agencies are doing for you.
- Measurable Results
Before you go ahead and outsource part of your business, you should have clear goals in mind of exactly what you are expecting to achieve. You should consult with a number of different agencies to find out exactly how realistic these goals are so you don’t end up disappointed. Like staff members, agencies should have specific targets that they are expected to meet.
When you review what your outsourced agency is doing for your business after a certain number of weeks or months, you can compare what they have achieved with your initial expectations. If they have not hit the targets, you should expect to know exactly why not. Though it’s important for your outsourced agencies to operate with some degree of free rein, you should still be able to hold them to account if things aren’t working out as you expected.
- Tax Breaks
Though it’s true that the whole world becomes available when you outsource, there are certain areas of the world that benefit from lower corporation tax. Hong Kong, Singapore and Taiwan are just three places in the world that have these lower tax rates which means your business will benefit should you choose to outsource to any of these places. Make sure you do thorough research before you work with businesses in any of these countries.
These eight reasons give you a good general overview of the advantages you can get from outsourcing parts of your business. If you only run a small business, it’s worth not outsourcing too much, too quickly as this can end up being very hard to keep track of. Start with one agency, and if this is going well, build up from there.
To sum up, outsourcing parts of your business gives you more flexibility, more time to focus, and most importantly, saves money for your business.