The Entrepreneur’s Advisor™
Starters Guide to Outsourcing
Outsourcing is the assigning of non-core functions of your business to an outside party in order for you to have more time to concentrate on your main (core) business functions. Almost anything can be outsourced, Accounting, Sales, Marketing, Human Resources, and Legal to name a few. Some tasks and functions that occur are mostly administrative (Payroll, HR, Accounting), some are production oriented (Sales, Marketing, IT) and others on an “as-needed” basis (The Entrepreneur’s Advisor, Legal, Cleaning, some planning). But when should you consider outsourcing? The answer is dependent upon your company’s skill sets, the time it takes to perform, and the costs required performing each function. Other factors to be considered include but are not limited to:
· How much time will you save by outsourcing and will you use this time to focus on your product or service? Every minute you or your staff spend administratively, is time NOT spent on marketing, research, networking, product development or selling.
· Is the function to be outsourced, critical to the success of the company? Examine the skill set of your staff. If the task is part of your core (critical) business
o Would you be better served if you hired outside talent (sales, marketing, etc…)?
o How much control are you willing to share or give up?
o Is your vendor reliable?
o Do they have references?
o Will your business operations come to a halt if they go on “vacation”?
o How are fees structured?
· If the function to be outsourced a non-core function?
o How are fees structured?
o Avoid convenience outsourcing – In other words, outsource only if you have to – not because the function is boring. As a business owner you should be willing to do any task from cleaning your office to marketing your company
· Can you bring these functions back “in-house” if you need to?
A general guideline to outsourcing is to maximize your time during the first few months of operation. Always remember that “Cash is King”, minimize your expenses if at all possible. Balancing productive time with outsourcing costs can be difficult. If you would like to know more please visit us at The Entrepreneur’s Advisor