As a smaller or medium sized business, chances are you’ll be running everything under your own roof. But as your company expands and grows, it can be increasingly difficult to do this. You might think that outsourcing is something that only much larger businesses can benefit from, but it’s absolutely perfect for SMBs. You can grow, increase your profits and do better business but without needing to hire more people yourself, pay for larger premises, more equipment or anything that comes along with a larger company. Here are a few things to think about.
When you outsource an area of your business, you pay a third party company who specialises in that area to do the work for you. It means that you don’t have to personally oversee the work (like you would with your own employees) and you have peace of mind that everything is being done to the highest standard.
What Can You Outsource?
You can outsource just about any area of your business, take accounting for example. When you run a business you need to be keeping exact accounts, if you mess up here you could end up with fines and penalties- it can even land you in prison. If it’s deemed you have been withholding income or information to pay less tax (even if it was an accident) you’re seriously breaking the law.
For this reason, outsourcing your accounting could be a good option. This is because you’re only likely to need an accountant once a year to do your tax return. The rest of the time, good business software will track everything accurately for you.
When it comes to business and finance, payroll is another huge responsibility. If you don’t pay your staff properly or on time it can lead to serious conflict and can even lead to people leaving. A high staff turnover rate is bad for both productivity and morale and costs you money where you need to advertise, recruit, interview and train new employees all over again. It’s another area you could outsource if you want to ensure that it’s being done to the very best standard.
Manufacturing is something that lots of businesses choose to outsource because setting up your own plant is expensive and a massive job. With your own plant you have to find the right premises, source the right vehicles and machines and find the right people to run them. You need to source your own materials such as aluminium, wood, processors or whatever it is your business needs to function. If you outsource, all of this is done for you and you simply have a finished product at the end.
What Are The Downsides?
Paying for a company to do some of your work for you will take a chunk from your profits, as you, of course, need to pay them. However, it’s not all that simple, and you can actually save money in many cases. This is because the company you choose to work with will already have the premises, equipment and staff needed to perform the task. You save money as you don’t have to cover these kinds of costs. Weigh up the pros and cons and look at the figures to see which areas are the best outsourcing and which should stay in-house.