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Is Outsourcing Ideal for Startups?

Estimated reading time: 2 mins

Starting a small company can be very exciting. Soon enough, however, you will come to learn that there are a lot of jobs that need to be done, which could cost you a lot and hinder your expansion. Outsourcing some of your work can be a solution for this, and it is not only big companies who could benefit from outsourcing.

Here are some of the reasons why.

Outsourcing saves you money

Limited budget is one of the main reasons startups fail, and this can be alleviated by outsourcing. Most companies that choose to outsource certain jobs tend to cite cost reduction as their primary motivation for doing so. This is because you only pay for the services you need when you outsource your work, which is usually a lot more cost-effective than hiring full-time employees.

When you hire a full-time employee, you need to factor in their health insurance contributions, benefits, and compensation. Providing them with their own tools and equipment would also cost you, as well as the on-boarding process. When you outsource, you will only need to pay a fixed rate, without minding their interview process, training, or any additional expenses.

Your tasks will surely be handled by professionals

Most businesses only consider outsourcing when they reach a certain capacity and to handle their work overflow. However this scenario could have been prevented if they outsourced early on.

Outsourcing provides you easy access to skilled talent. When you outsource a certain job, you entrust it to an expert who could give it all their focus. Even if you take on the task as an expert yourself, your focus will be divided between the job and running the rest of your business operations.

Expansion can be easier

Startups are not bound to remain startups for very long. When you decide to expand your business offering, however, you might need to go through a cumbersome and expensive process.

Say, for example, you are looking to expand your clothing business to start making shoes as well. Traditionally, you will need to hire experts to do market research and analysis, and employ new staff who are skilled in shoe manufacturing. Marketing your new products would also require additional resources. In this scenario, you could outsource someone to carry out the market research. If you find the results satisfactory, you can outsource a test run of production to a trustworthy shoe manufacturer. Afterwards, you could outsource marketing management services to handle the marketing of your new product line.

Outsourcing allows you to test the market before you could dedicate more resources to expanding your business. Without overstretching your budget, outsourcing could help you grow your startup into new markets at your own pace.

You can outsource almost any kind of services you need for your business. But before you outsource, you should analyze your operations and identify which areas are at the core of your business. These can be the aspects that are responsible for making your products and services unique to your brand, and these core activities should be at the bottom of the list of tasks to outsource. For the rest, outsourcing your work could help a lot in boosting your competitiveness and productivity.

 

About the author /


Simon is a creative and passionate business leader dedicated to having fun in the pursuit of high performance and personal development. He is co-founder of Applied Change, a Business Change consultancy based in the UK. Simon is also an Ambassador for Gloucestershire business. Simon is an Associate Member of the Chartered Institute of Professional Development.

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