Most startup founders are blind to the benefits of outsourcing. They want to keep all of their operations together, under one roof, even if that roof is their apartment. Outsourcing often seems like something that only large companies have the funds to do, companies that are too big to be managed by the staff they have on hand. However, outsourcing can be a great way for a startup to improve the quality of their business and quickly expand, without being restricted just to the talents and the time of those who work in the physical office or who are currently on the payroll.
I personally like Elance, Fiverr and oDesk. Outsourcing gives small, new companies the opportunity to quickly branch out, and to ensure that some of their business-related tasks are done quickly and efficiently, by someone who really understands how to do them—instead of handing the task over to someone in-house who has no time or idea how to complete the task.
Lower labour costs
This is probably one of the most popular benefits of outsourcing work. It is often much cheaper to pay someone outside of your company to complete a task than to pay someone inside of the company to do so. There are freelancers and outsourcing companies that offer work for pennies on the dollar, if you only know where to look. Do not be afraid to look outside of your home country for labour, as outsourcing to a foreign company can save serious bank, while still getting the task done correctly and efficiently the first time.
Even if your task needs highly specialized skills, it is cheaper in the long run to pay someone outside of your company to do it correctly the first time than to pay someone inside of your new company to do it incorrectly over and over. Startups usually have very little breathing room, so if you have an important task that needs to be done properly, and no one inside of the company can do it well, find someone outside of the company that can.
The only potential problem with this is staff motivation and engagement. If you are constantly relying on other people outside of the business to work on essential tasks, it can mean that people inside the business don’t feel as much of a part, and that in turn can affect their motivation. This is why I would recommend the below.
Outsource non-essential tasks
Sometimes, there are tasks that you just feel you do not need to be doing. This can be anything from writing your company’s weekly email newsletter, updating your Facebook page, or responding to customers who interact with your company over social media. These tasks could even be as simple as clearing the junk mail out of her inbox or managing your email subscribers.
If you are being bogged down by tasks that are taking your mind away from the actual meat of the business, outsource them! There are tasks in your company that just do not need to be performed by someone actually in the company. By getting someone from the outside to take care of them, you save time and money.
My experience: When I need to make a long list, or get some data from a data miner. I find that Elance is a great place to find experienced freelancers at good rates, some 5 star rating freelancers will cost you roughly around $5 to $8 an hour.
This is one of the biggest reasons to outsource. If you do not know how to build a website, the worst, most expensive thing you could do is try to build your own website. You will waste time and money trying to make sure that it is properly outfitted for search engine optimization and for all of the content you want to place on it.
Not only will this take time away from the things you do well, it can actually cripple your business. If you do not know how to do something, do not be afraid to ask someone who does. Outsourcing to a knowledgeable expert means that the task is done correctly, by someone who understands that sliver of the industry much better than you do.
Focus on what you do best
Startups generally only have a few people, if that, working together to build the company. That means that all business-related tasks are relegated to those few people—and “those few people” may only really be one person. No one can really know everything they need to know about every aspect of their business. There will be facets of any business that no one inside the company really understands how to handle.
This could be anything from accounting, to social media management, to logo design. In some instances, you may actually know plenty about accounting, but on top of everything else you have to do, you just do not have time to set up the payroll system or spend hours building social media pages and producing content, there are freelancers that do nothing else and build their businesses helping people who are too busy to complete all of their tasks proficiently. When this is the situation for you and the rest of the people involved in your startup, start looking for a freelancer who is more than happy to take on the job.
Lower overall costs
At first glance, it seems that outsourcing is an additional expense, being added onto an already strapped budget. And that is one way to look at outsourcing—but it is also an incomplete way to look at it. Freelancers lift the burden of the routine or specialized tasks. They allow you to shorten your sixteen hour days to twelve hour days. You can maybe sleep a full eight hours for the first time in months. They also prevent costly mistakes.
Take the example of the webpage designer from before. A webpage designed by someone who does not understand the process or does not have time to do it correctly, will not draw the kinds of visitors you need to sustain your business. And even if it doesn’t work properly, you still have to pay for it. You had to pay the person inside your startup to build it, and you have to pay for the hosting, even though it is not yielding profits as a result of that investment. Instead, if you outsource the webpage to someone who can build something appealing and SEO-friendly, who might even be able to fill it will relevant and useful content, you will have a webpage that bring in real profits. That investment pays for itself.
Focus on big-picture tasks, instead of menial day-to-day tasks that do not require training. Especially in the early days of your startup, when it seems like there is a lot of busy work related to marketing, social media, emails, and other tasks that larger companies have whole departments to handle, you may begin to feel disconnected from the reason you first started this company. This is one of the biggest benefits of outsourcing. When the menial tasks are assigned to someone outside of the company, someone who does them well and at a cut-rate price, you and your staff will be able to focus on the big picture again.
You will have more time to consider the overall goals, to focus on refining the product or service you offer, and building a strong, sustainable business. For example, if your company sells a physical product, there are plenty of companies that can store and ship your products on demand, completely taking care of the sales aspect of your business. This frees you to work on creating new products and finding other ways to build the business.
Greater access to new areas of the market and making connections
As a new startup, one of the best ways to build your business is to hire freelancers and other small, specialized companies to take care of the tasks that you cannot or do not have the time to perform yourself. This also opens an avenue for new collaborations and for connecting with other businesses. Not only does this process afford you greater name recognition, it gets your business into sectors of the industry that you might not have thought to connect with.
Benefits of Outsourcing: Global Networking
For example, if your startup builds interactive webpages, you might hire a freelance writer to create content for your startup’s landing page. In turn, that freelancer might ask you to build him a new webpage. You have just built a business relationship that will undoubtedly be useful down the line—for both of you. Outsourcing helps you find skilled individuals in all parts of the world, who can help introduce your startup into new markets. You may even find a person so skilled and so integral to the functions of your business that you want to bring them on full-time. A great deal of success in the business world is dependent on how active you are in that industry. Are you making friends with other companies? Are you finding skilled people who can help build your business form the outside?
When you are first building your startup, it will consume your life. It is very difficult to have a startup and have a real life on top of building that business. This will pay off down the road, but there are some things you can do to make right now less stressful and provide yourself with greater flexibility—which is just as important as working hard. Building a business is a creative pursuit, and having your schedule bogged down with important but menial tasks can sap the creativity out of anyone.
Do things you couldn’t before
The more flexible you can be, the better able you will be to handle whatever roadblocks are placed in your way. If you do not have a rigid schedule that you must adhere to or the company will fall apart, you have the breathing room that you need to actually think critically about your business. Plus, if you find you need to fly off to another city to woo a group of investors, you can do it without worrying about who is taking care of these large, important projects. The last thing you want to tell an investor is that you don’t have any time to meet because you have to finish your webpage before your first product launches. One of the benefits of outsourcing is the flexibility to prioritize your tasks and put the big-picture projects ahead of the ones that can be delegated to someone on the outside.
Are you concerned about your ability to handle customer service? Are you afraid that the content on your webpage, in your correspondence, or even on your product packaging will not be quality? One of my personal favorite benefits of outsourcing, is that you can pass on a task to someone who specializes in that specific task. For example: If you know that customer service is not your strong suit, you can outsource your helpline to someone who does nothing else. By outsourcing to specialists, the overall quality of every aspect of your business will improve. Services will be handles by those who have trained for years to provide them, and you can focus on the aspects of the business where you excel.
When to Outsource
How can you know what to outsource and what to keep in-house? Outsourcing shouldn’t just be for the jobs you and your staff (if any) don’t want to do. When considering outsourcing, make a list of the tasks that need to be completed but cannot be completed by someone on the staff—not a list of people who do not want to do them. For example, you may not have anyone on staff that wants to handle customer complaints, but is that something you can actually hand to someone outside of the company to deal with? Not if you want those questions and complaints resolved properly.
Be honest about your time commitments and the skills and limitations of everyone in your burgeoning business. Getting the task done and done correctly will mean fewer costs down the road and a stronger company, over all, but outsourcing something just because you don’t want to do it, when it really should be done by someone inside the company, with have the opposite effect. However, when done well, employing qualified professionals, outsourcing is one of the best investments that startup owners can make.