There’s a reason why the global outsourcing market is worth an estimated $92.5 billion. More businesses than ever are taking advantage of the many benefits of outsourcing. However, the business practice isn’t just for large corporations. Small businesses can also benefit from outsourcing.
This day if you aren’t outsourcing, then you could be inhibiting the growth of your company. To convince you, we’ve organized this list of the six most important benefits of outsourcing let’s take a look!
Best Benefits of Outsourcing for Your Small Business
If you aren’t familiar with outsourcing, it’s the practice of hiring an outside party to perform services or create goods for your business.
Traditionally, these roles would be performed in-house by the business’s staff. Most of the time, the practice is used to save companies money. However, this isn’t the only benefits of outsourcing. In this section, we’ll go over six important reasons why you should consider business practice.
1. Saves Money for Your Business
As we mentioned before, saving money is one of the primary reasons why most companies turn toward outsourcing. Both small businesses and large companies try call center outsourcing to the Philippines and other top BPO countries to help them deal with customer inquiries and concerns. Some outsource web designers in making and designing their website, while others even trust other people to take care of their accounting needs. Often when you outsource you can employ workers at a fraction of the cost that it would take you for in-house employees. So why is this? It all boils down to fixed costs versus variable costs. Full-time employees represent fixed costs.
Their cost remains the same regardless of output. Outsourcing, on the other hand, represents a variable cost. This means that the cost increases or decreases depending on your output. So, if you require a lot of output, then you can pay a little more. Or, if you need less, then you can cut it off without the problems associated with letting go of a full-time employee.
However, it also has to do with the cheap labor that’s often found overseas. While this isn’t a factor in some outsourcing decisions, lower costs of living in some countries mean lower costs for outsourcing. Regardless of the reason, most businesses come out of outsourcing with extra money. Best of all, you can invest this saved revenue directly back into your business.
2. Allows You to Expand
In this last section, we mentioned the difference between fixed costs and variable costs. Outsourcing, which is a variable cost, not only helps you save money; it can also help you scale your business. Many small businesses often experience growing pains when they scale too quickly. In some cases, they aren’t able to meet the high level of demands.
Or, worse, they expand to meet the demand and it goes away. Regardless, of the direction, your business takes, a variable cost makes it much easier for your company to expand and contract.
If you need more output or labor, then you can easily hire more. Or, if you need to tighten up your budget, you can simply cut back on the variable cost. This makes it much less complicated to scale your small business as you need it.
3. Outsourcing Supports a Variety of Functions
Often we only associate outsourcing with production. However, the reality is that the business practice supports a variety of different functions.
This is ideal because you can immediately fill in any function that your business might be lacking. For example, an IT outsourcing company like GenerationIX can help upgrade your software and protect your data as you see fit. Here are just some of the different functions that outsourcing can fill:
- IT services
- Financing
- Accounting
- Legal
- Digital marketing
- Staffing
- Production
4. Better Employee Efficiency
Outsourcing can also make the star employees in your business more efficient. You can do this by allocating busy work that slows them down to an outsourcing company. For example, let’s say you own a sales company. Your top sales staff might be great a selling but slow at filling out the necessary paperwork.
So, they waste a lot of time doing menial work when they could be doing the skills-based work they’re good at. You can let the sales staff get back to what they do best: selling by outsourcing this work that anyone can do.
5. Gives You More Time to Think About Larger Strategies
Small business owners can waste a lot of time dealing with functions like customer support, IT, and production. This is especially true if they don’t have experience dealing with these areas of their business. As such, outsourcing allows experts in these fields to deal with problems in your business instead of you.
This gives you valuable time to develop a business strategy. By mapping out your small business’s future, or brainstorming new ideas, you’re able to actively make your company a success. This is much more preferable to wasting time learning skills that someone else already knows.
6. Allows You to Compete With Larger Companies
These days many small companies can’t compete with the lower prices and larger scale offered by huge companies. However, outsourcing can help level the playing field by offering you the same types of saving and benefits that these larger companies take advantage of.
The means you can also your service for a lower price, while still maintaining the individualized support that small businesses usually supply. So, consider going with more simple outsourcing instead of paying for in-house services that you can’t afford.
Want More Content? Keep Exploring
We hope this article helped show you some of the benefits of outsourcing work for your small business. As you can see, there’s a lot of pros that come with the business decision. However, if you’re still hesitant, we recommend outsourcing a little and increasing it as you see fit.
That way, you know whether or not the practice works for your business. It also allows you to see if you like the outsourcing company you went with. Did you enjoy this article? If the answer is yes, then you’re in the right place. Keep reading to find more topics that you’re sure to enjoy.
