There comes the point in the growth of any successful business when decisions are needed on how to handle expansion, hire or outsource. You could take the risk of hiring staff to cope with the increased turnover, but this is often expensive and a gamble on growth continuing to cover the costs involved. Alternatively, you could scale back on your marketing, to keep business steady at a level you can deal with.
If neither of these options sounds attractive, there’s a third choice which allows for expansion without too much of the financial risk Outsourcing lets you bring in outside agencies to spread the workload, and it can be a highly efficient way of driving your enterprise forward. However, it needs to be done in the right way if you want to enjoy the full benefit.
Choose the Right Functions to Outsource
Not every part of your business is a good fit to outsource. The most promising functions are those which focus on daily administration or other routine work, rather than your core business. For example, bookkeeping and accountancy is a perfect choice; you can draw on others expertise without sacrificing control over what makes your enterprise unique.
However, outsourcing any customer facing function carries significant risks. Your company’s reputation is vital to its continued success, especially in the social media age, and so you need to maintain strong oversight on all your dealings with the public. This is accomplished more easily by keeping these activities in-house so you can delegate the responsibility to a highly trusted staff member.
Prioritize Value Over Cost
Outsourcing is a great way to save money, but never lose sight of the fact that it's about growing your business, affordably.Click To Tweet You shouldn’t be afraid to pay a little more for a service provider who delivers strong results, rather than only looking for the lowest price.
Constantly Monitor Value
However, the value you receive may not stay constant over time. Your business could grow to the point where taking things in-house begins to make better sense. Market conditions could change so that your current outsourcing provider is no longer the best in terms of the price of quality. The beauties of outsourcing is the degree of freedom it gives you. Don’t be afraid of making changes, if this could help your business grow.
On the other hand, a good outsourcing relationship takes time to develop. Both parties need to learn the other’s strengths and weaknesses, and smooth communication can take a while to develop. While you should always monitor results carefully, and switch providers if necessary, chopping and changing too often means the outsourcing arrangement doesn’t have a chance to settle and show its real value.
Delegation and Accountability
The outsourcing agency is not an employee, and you can’t ask them to work beyond their remit out of loyalty to the company or ambition to further their career. You need to agree on clear terms and scope for the services to be provided, along with setting out the results you expect to receive. Also, an effective means of communication needs to be set up. Who is the responsible contact on each side of the arrangement? This should be made clear from the start, as miscommunication is almost inevitable if no one’s clear on who is answerable to whom.
Don’t Overlook Legalities
The more important the function being outsourced, the more vital it is to have a proper contact in place. If you’re unhappy with the results, you need a clear way to get out of the arrangement without undue cost and complication. on the other hand, you need some protection against your outsourcing partner suddenly walking away and leaving you high and dry. While a good working relationship will lessen these risks, there’s no harm in having a little legal backup should it be needed.
Outsourcing can be an excellent way to speed up your company’s growth without committing long-term resources risking financial stability. However, like any business relationship, it needs to be approached carefully to realize the full benefits. Solid preparation and awareness of the possible issues will ensure your decision to outsource bears profitable fruit.