DATE POSTED: 02/03/2016

Planning to scale your business? Outsourcing companies can help you with that.

Outsourcing has been a business trend for years for providing short-term benefits to business organizations (such as cost savings) but many still overlook its ability to help its partners scale their business. By outsourcing some of your business practices – may it be back-end tasks, IT services, or payroll administration – outsourcing can save you time to focus more on your business’ core competencies.

Laura Lee Sparks, owner of Legal Marketing Haven, an outsourcing firms for law firms, says, “Most entrepreneurs have great talents but many times they think they can do it all. That can really stall the growth of the business. By outsourcing the day to day back-office tasks, the business owner has more time to focus on generating income.”

Here are 10 secrets on how you can scale your business by leveraging your outsourcing.

  1. Outsource in-house tasks that would be difficult to expand on your own.

Expanding your business comes with a number of new investments – training for new employees and purchasing capital equipment are among many others. But consider this: are there in-house tasks that are difficult to scale on your own? For example, if you’re running a start-up online shopping website and recently put up a customer trunk line to comply with putting customer-centricity as your top priority this year, hiring a new group of customer service employees who can address customers’ concerns 24/7 might prove to be difficult.

  1. Reduce development costs by choosing a third-party provider for your software.

While developing a mobile application or software on your own can be your first big step to growing your business this year, you might still want to consider cutting on development costs by choosing a third-party provider. Mobile app development, for example, can take as long as seven months to a whole year. Your IT department is most likely occupied with managing day-to-day tasks of the company, so developing an entire mobile application might be pushed back to the bottom of their priorities if you won’t hire a dedicated person or team for that project.

  1. Access specialized talent.

Outsourcing companies are often made up of a group of people with specialized talent – take advantage of their expertise. Hiring new employees for a one-time project (i.e. web development) can be too time-consuming and expensive compared to hiring an external provider that is made up by people whose expertise include PHP programming and web layout design.

  1. Let external contractors help you handle the workload.

If you’re experiencing an increase in the volume of orders, your team might also experience additional stress, which could then lead to decreased productivity. Hiring external contractors to help you work on your project can take days or weeks only compared to when hiring new employees to help you cope with your current business conditions.

  1. Outsource when it helps you reduce costs.

Make sure to weigh the cost vs. benefits of your outsourcing partnership. Steve Tadelis, Associate Professor at the University of California Berkeley Haas School of Business, warns business owners to beware of the hidden costs that internet technology outsourcing may have. Extra work for external service providers also mean extra expense, and they could always charge you for tasks not included in your original contract. Be clear on what you want and what you’ll be getting, and make sure that all parties involved are also on the same page in your agreement.

  1. Choose an outsourcing company that invests in their training and development.

One way to tell that you’re getting guaranteed value from your outsourced partner is if you can see them putting a massive investment in their own training and development. This way, you can be assured that the service they’re providing you is only the best.

  1. Opt for an outsourcing company that has been on top of their ranks.

As the outsourcing industry continues to grow itself, the competition is also stiff with several outsourcing companies vying for the top spot. Before hiring an external service provider for your business, check their background and see their recent developments and achievements. You don’t want to end up full of regrets when you end up choosing an outsourcing company that offers a lower cost but has long been outpaced by its competitors in the market.

  1. Beware of lower costs.

In line with #7, beware of outsourcing companies that offer a remarkably lower cost. This could be your red flag. You might be blindsided by the affordable price, but this might actually hurt your business in the long run because lower cost of labor can mean a lower quality of product/service as well.

  1. Be careful in outsourcing a critical company function.

Be cautious in outsourcing a key business function or practice. It might provide short-term benefits at first, but it could hurt your business in the long run, and if worse comes to worst, it could kill your business. Outsourcing a key business function that holds the core value to your company leaves you vulnerable all the time.

  1. On outsourcing an offshore company, make sure that you have all the info you need.

Thinking of outsourcing overseas? The lower cost of labor might be alluring, but be cautious in choosing overseas outsourcing partners. Check on their local contact info and mode of payment. Gather as much background information as possible – you don’t want to have what could have been a good strategic partnership to be a fraudulent transaction in the end.

Do you have anything to add to this list? Share them with us in the comments!

Author: Outsourcing Insider

Outsourcing Insider consists of a team of regular blog contributors who writes topic about outsourcing and its relation to other industries like social media, finance, healthcare, sales and marketing, contact centers, and data and research.