When we think of growing a company, we tend to think of it expanding in size. This makes sense; more business means you need more people to do things.
And while this is true, there are ways to grow your company without having to bring in loads of people to do it, helping to reduce the costs of growth and keep things moving in the right direction.
One such thing is outsourcing. However, most people do not consider outsourcing to be a growth tactic, relegating it instead to the world of “cost-saving” strategies.
But this doesn’t do outsourcing justice.
By outsourcing the right things to the right people, you can put your company in a much better position to grow both now and in the future.
Considering outsourcing, but not sure if it’s right for your business at this time? Well, here are advantages that outsourcing can provide your company.
Better Use of Resources
Managing resources is always a challenge for any business, but it’s especially difficult for small companies.
In fact, improper cash flow management is one of the main reasons why small businesses fail. This is why it’s so important for you to reduce costs wherever you can, whether that be by managing inventory better or keeping staff low.
However, outsourcing presents an interesting opportunity for you to save money without having to dramatically alter the shape of your organization.
Specialty firms dedicate themselves entirely to one thing, and because you the company are their customer, it’s in their best interest to offer their services at the best possible price, which is often lower than the cost of executing the same tasks through internal resources.
Your savings can then be used to invest in the growth of the business.
Say, for example, you start outsourcing payroll and tax preparation. By removing this from your business, you can keep your accounting department thin, using the resources you would have used to pay for tax accountants and payroll managers, to instead fund a marketing campaign that will help you reach new audiences.
It’s important, though, to try and do this before you expand your team so that you can avoid layoffs. This way, as you scale, your savings continue, and you can keep putting money into the areas of the business that will generate growth.
Better Use of Time
It’s normal for employees in a small business to wear many different hats. And while this is empowering, it seriously hinders your ability to grow.
Let’s consider an example. Say you have a small HR team of just four people. Their jobs consist of typical HR duties, such as onboarding, recruiting, benefits management, etc. But because you’re aiming to grow, you also have them working on more high-level stuff, such as managing your employer brand and improving your candidate experience.
While they might be great at their jobs, by keeping them tied up with these “typical” HR duties, they don’t have as much time as they might need to work on these other job functions that can actively contribute to company growth.
Now, imagine you outsource these “typical” functions to a professional employer organization (PEO). Your small team of four HR employees now to have the ability to manage these functions, not actually do them, meaning they can spend a lot more time strategizing and setting your company up to recruit top talent that can really help your company grow.
Small business owners bring passion to their work, however, at some point, these entrepreneurs need to learn that they cannot possibly do everything.
For a company to grow, it’s important to have the CEO removed from the tedious tasks and focused on the strategy and big picture that helps the overall company expand.
If they're spending half their time checking up on payroll problems, marketing content creation and customer service hiccups, then there will be much less time to focus on developing the company brand, meeting with big-name clients, and developing new and exciting products.
Not every business owner does this, but the point is that each business owner does have something they are particularly good at, and for the business to grow, they need to recognize this and focus as much energy as possible on it.
Outsourcing helps with this because these firms are entirely separate from the business. Instead of checking in with the marketing team on a daily basis, CEOs can work with a marketing firm and set up a weekly meeting where you are updated on what’s going on.
This means less time tracking down the mundane and more time working on the big picture.
It’s hard to imagine there are more talented employees outside of your internal team. But everyone has their limitations, and while motivated individuals can certainly learn, this takes time and money away from the company and can slow its growth.
A good example of this is with digital marketing.
It’s a field where there’s lots of money being spent and made, but you need to know what you’re doing. You can ask your current marketing team to try and figure it out, but this going to start a long process of trial and error.
So, the better option is to outsource your digital marketing in the short-term, while also investing in training your current employees for the long-term.
Again, specialized firms are experts at what they do. Sometimes it’s better to just call a spade a spade and accept you can’t do something. This will push you to get help in the areas where you really need it.
Inefficiencies within your business slow you down. The time someone spends running between three different departments to get approvals for an expense report is all time not spent on growing the business.
Outsourcing helps make your organization leaner.
For example, if you outsourced accounting functions, then filing expense reports might require nothing more than your employees entering numbers into a database and you signing something at the end of each month.
Most organizations dream of this kind of optimization, as they know how much it can contribute to growth.
If you embrace outsourcing, then this efficiency is well within your reach.
Start Outsourcing Today
If you’re hemming and hawing about outsourcing because you’re not convinced its cheaper, then let this be a call to action.
Effective outsourcing can be a powerful way to not only reduce costs but actively drive company growth. However, it’s important to make sure you are outsourcing the right things.
Still, do a cost-benefit analysis before outsourcing, and make sure to vet the firms you work with so that you’re getting the best. Keep all this in mind, but know there are most definitely aspects of your business you could outsource to help drive growth.
About the Author: Jock is the founder of Digitalexits.com, an online brokerage service that specializes in the buying/selling and appraisal of online business. He also does consulting work to help companies of all sizes identify areas of potential growth. He started his first business when he was 19 and is now an expert in high-growth internet companies. He writes frequently to share his experience and to serve as a resource for other entrepreneurs.