How to Decide What to Outsource

How to Decide What to Outsource

As your small business scales up, you’ll likely find that simple tasks are taking up too much of the time you and your team could otherwise be dedicating to higher-leverage activities. When this is the case, it’s time to start outsourcing some of your everyday business tasks to other individuals or companies. The problem, however, is knowing just what to outsource and what should stay in-house. Here are five criteria that will help you decide what to outsource.

Cost

The first and most important factor in deciding whether to outsource a particular task is the cost involved. Will outsourcing be less expensive to your business than keeping the activity in-house? If the answer is no, forget about outsourcing that task. Even if it is more convenient, there is never a good reason to pay more for the same work.

Relative Advantage

When you outsource something to another business, you free up time and resources. If you’re going to outsource, you have to ask yourself whether or not the time and resources freed up by outsourcing that task can be put to more profitable use somewhere else. If, for example, you have an employee whose sole task is to handle accounting and you cannot find a more profitable use for his or her time in another part of your organization, it may not be worth outsourcing your accounting tasks.

Quality and Convenience

With the advent of the digital age, almost any task, from copy writing to packaging, can be outsourced. The question, however, is whether or not any given service can be outsourced to a quality service provider for a reasonable price. You may find businesses willing to handle your tasks for very low prices, but you will also likely find that these businesses deliver a low-quality service and experience. If you are spending just as much time dealing with problems stemming from the companies you’re outsourcing your work to as you would have handling it in house, you’re not actually gaining anything.

Potential to Scale

When you decide to outsource a given task, you want to make sure the business taking control of it will be able to keep up with increased work volumes as your business scales up. Ideally, higher volumes of work should come with better pricing for bulk services, though this will depend on exactly what you are outsourcing. Before you choose to outsource, however, be sure to check with the various firms that you may outsource to in order to ensure that they are capable of handling more work as your business grows. Having to change service providers later to accommodate higher volumes will only produce more work for you.

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Even though outsourcing is a great way to allow a business to grow while keeping it lean, it is possible to outsource too much. You should outsource time-consuming tasks that go with any business, but you should not be outsourcing the actual provision of products or services to your customers. Even though it can be tempting to do this, the problem is that it reduces your control over the quality of the end product. In order to keep your customers satisfied and ensure future growth, it’s best to keep the core of your business in-house.

What Are Some Tasks That Business Owners Outsource?

After looking at these criteria, some business owners may be wondering what elements of their businesses are ripe for outsourcing. While every business if different, there are several tasks that are commonly outsourced. Most businesses start by outsourcing their record-keeping tasks, such as accounting and data entry. Blog writing, backlink building and phone service are also usually fairly high on the list of tasks to outsource.

Another major area of business that is frequently outsourced today is digital marketing. Though it is more expensive up-front than keeping marketing services in-house, professional marketing firms produce a much higher ROI than most in-house marketers can, meaning that they are more cost-efficient in the long run. Social media marketing, in particular, has become a very popular element of business to outsource.

Outsourcing can be a delicate balancing act, but with some careful thought and foresight you can figure out which elements of your business should be outsourced and which shouldn’t. Never be afraid to shop around for other businesses to handle some of your more time-consuming tasks for you. If outsourcing doesn’t work out, you can always bring tasks back in-house without too much difficulty.

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