What is Outsourcing?
Outsourcing is the practice of hiring another company to perform specialized services that are traditionally done in-house or by the initial business’s own staff. This allows the staff to focus on tasks related to the business, rather than the specialized, tedious, and sometimes mundane tasks that can be performed by an outside source. Outsourcing can also be temporary to fill a gap in personnel.
Several companies have been outsourcing parts of their business for decades, as it‘s a good way for businesses to save money. If you’re a new business owner, here’s what you need to know about outsourcing.
What to Outsource
Every business is different, so you should outsource whatever would be the most beneficial for your company. However, here are the most common outsourced functions of businesses.
Accounting and Other Financial Matters
If you have a professional accountant as a part of your staff, then you don’t need to worry about outsourcing this function. Still, the majority of businesses choose to outsource their accounting tasks rather than keep them in-house. Other tasks that fall under accounting include payroll, bookkeeping, and handling taxes.
This doesn’t necessarily mean you’ll hire a new CEO to take over your business, but you will appoint small administrative tasks to another company that specializes in these tasks. Examples are answering phone calls, scheduling appointments, and similar work.
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Outsourcing your customer service doesn’t mean that you’ll replace your employees, but it applies more to the online sector of your business. When your customers order your products online, they may or may not be able to come to you in person.
If there’s a problem, so your website must have a customer service section, but there should also be real people available to help your customers if you want to have any chance of cultivating a positive public image.
Just make sure that you choose a trustworthy company to handle your customer service because it’s still a reflection of your company.
The HR Department is another widely outsourced sector of businesses. If you’re just starting up a business, this function can wait to be outsourced, as many first-time business owners handle all HR responsibilities, such as recruiting, interviewing, hiring, and training. When your business starts to expand, outsourcing HR will definitely be necessary.
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In the same way, you can have a professional accountant on your staff, you can also have an IT specialist. As a small business owner, you’ll want to have an IT specialist set up all of your applications and troubleshoot them. As you grow your business, think about hiring an entire team of IT specialists to help you with all of your tech needs.
Good marketing strategies are your keys to success in the business world, so if you’re not a marketing professional yourself, you should definitely hire a person or a team who is. Marketing agencies can help you come up with campaigns to help attract more customers. There are also marketing agencies that specialize in recruitment.
Pros of Outsourcing
One of the great things about outsourcing is that almost anything can be outsourced. Again, different types of businesses have different needs, and maybe you need more to be outsourced than what was listed above. You also don’t have to hire a different company for each outsourced function.
There are companies that can handle multiple aspects of your business. JDE Consulting is a good example of a company that can help you in multiple sectors of your business. Other advantages of outsourcing include:
- You’re able to cut costs, saving you money.
- Employee efficiency is increased because they can focus on their primary tasks.
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Cons of Outsourcing
Unfortunately, outsourcing does have its limitations. Some of the disadvantages associated with outsourcing include:
- You lose some control over company operations.
- There’s the potential for miscommunication (especially if you outsource to a foreign country).
Every business owner has to decide if outsourcing is suitable for their company and what they should outsource. There’s good and bad that comes with it, so you have to make the decision that’s best for your company.