Outsourcing: How to apply it to small business

Though outsourcing may be more common for large companies, it can also be applied to small businesses, in order to complete tasks in a timely manner without hiring a permanent employee. Tasks from human resources to financing, accounting and customer service may be outsourced, depending on the nature of your business.

The term outsourcing refers to any task, operation, job or process that could be performed by employees within an organization, but is instead contracted to a third party for a significant period of time. In addition, the functions that are performed by the third party can be performed on-site or off-site.

My previous post dealt with balancing long term strategy and daily operations, and highlighted how you as a small business owner could find yourself wrapped up in important but not essential, and often time-consuming, tasks. Outsourcing should not be something taken lightly, as a hasty decision could cause problems down the road, if services rendered are inadequate or costly.

When considering outsourcing, it is important to identify the key areas that are the mainstay of your business, and keep those within the company. Then, look at outsourcing other tasks that are not as strategic. If you haven’t already done so, develop a list that identifies these tasks. This is just step one.

From here, consider the following in making the decision to outsource services, and to whom:

• This is your business, and you should have an in-depth interview with the person or company you are considering, to make sure they are qualified to take on the desired work.
• Depending on the type of task you are outsourcing, let your employees know what is going on and how it will benefit them. (For example, you will have more time for them, and they will have more time to focus on the customers.)
• Allow time for training and setting expectations with each other.
• Take baby steps. Don’t sign up for a two year contract; try the arrangement out on one stand-alone project, or for a predetermined limited time frame. Then, make a decision to continue or not.
• Continue to tightly manage the outsourced task. It might not be as easy as just walking down the hall and checking up on them, so arrange for regular reporting to make sure everyone and everything is on track.
• Consider the degree to which outsourcing could save you both time and money. Payroll duties, for example, require specific knowledge of accounting, tax law and other relevant policy. Rather than taking this on yourself, outsourcing payroll will free up your time to focus on strategic planning, which can have a more valuable impact on growing your business in the long-term.

There are many outsourcing options available to you. The important message here is that when done correctly, outsourcing can provide you the time to concentrate on the key values of your small business. This allows you greater opportunity to strengthen the business, which in turn could hold valuable implications for drawing and building relationships with customers.