While you can use many metrics to measure the size of a business, the most common metric used is the number of employees. Small businesses usually have between ten and 100 employees (usually less than 20), so you must make each hire count.
Now, you can hire large departments with specialists when you have a large enterprise. Coordinating these departments is not easy either. It’s far simpler to outsource and have all your in-house employees on core tasks. This way, you’re keeping things simple and, at the same time, keeping up with your workload.
With that in mind, and for those still on the fence, here are some benefits of outsourcing for small businesses.
More Cost-Effective
Outsourcing is not cheaper; in the long run, it’s questionable if it’s cheaper than running your department. In the short run, on the other hand, it’s much cheaper and more cost-effective.
First, you don’t have to bear the initial costs of starting a department. The hiring process is expensive, especially when you hire specialists. Then, it’s worth mentioning that buying the initial equipment may be quite costly unless you’re running a fully remote team.
Licenses are not cheap, and, as a small business, you may not find this extra expense worth it.
Remember that the agencies you outsource to will count these expenses and pass them down to their clients. However, they’ll spread this across all of their clients, and your end of the cost might be a fraction of what you might pay on your own.
Even in the long run, most experts argue whether outsourcing is worth it financially. The main reason why this is done is not because of the costs but the control. If you don’t feel the need to have everything done internally, there are usually no strong arguments against outsourcing.
After all, you’ll communicate with the agency’s representative like you would with your team leaders (usually via the same software).
Simpler Business Structure
From the administrative standpoint, small business outsourcing can simplify your internal structure.
As a specialist, you may have some basic knowledge of many fields but only understand the main task of your enterprise in-depth. This means that while you may know whether your HR, customer service and IT departments are doing a good job, you can’t know for sure outside of being an expert. So, if you won’t be as involved even with an in-house department, why emphasize handling things internally?
The fact that your workforce is not directly employed by you will also make things so much simpler from the standpoint of payroll management. You don’t have to worry about different hourly rates, overtime, holidays, days off, etc. You only negotiate the terms with your outsourcing agency and get what you paid for.
Simply put, you’ll hire many full-time employees working on core tasks, making a profit for your enterprise. Everything else will be outsourced. This is how even some of the biggest enterprises today function. Don’t assume that multi-billion dollar conglomerates don’t outsource. It’s not about whether you can do things in-house. It’s about whether you should do it.
A larger enterprise with more administrative capacity may get away with it. For you, it’s better to keep it simple.
Scalability
Another massive reason why outsourcing is so great for small businesses is the matter of scalability.
As a small business, you never know if an increase in workload will stick. Sure, you hope for the best, but there’s no guarantee that this will be the case. If you hire more people, move into a bigger office, order more supplies, and switch to a more expensive software plan (paid upfront), and your workload drops, you’re in a problem.
With outsourcing, adjustability is great. Not only can you switch to a more expensive plan or request more people on your project if things go well, but you can also downscale without firing anyone. The agency you’re working with has its workforce, perhaps even freelancers they collaborate with occasionally.
Also, their capacity probably drastically exceeds your needs, so they work for more than one client. So, if you need more work from them, you only need to ask and agree to a deal change.
Keeping an eye on compliance will be harder as your company grows. Well, you can rely on the fact that the agency you’re outsourcing to is an expert in an area and that they know what they’re doing. This way, they even assume a part of this responsibility.
Immediate Results
Previously, we’ve talked about the immediate costs, but no matter how much money you put into a department, it will still take a while for your team to mature. Just think about it: you need at least one specialist to be a leader and a few entry-level employees to work under them.
Even if you hire everyone with work experience in this field and give them the tools they’ve previously worked with, it will take a while for your staff members to get accustomed to working together. Team cohesion is harder to achieve than you think, and depending on the individuals you gather, it might happen even later than you would like. In other words, there’s even a level of unpredictability to add to the list of your problems.
With outsourcing, you just get a team straight away. You get people who are trained, work well together, have all the tools and practices of the industry, and are highly competitive in what they do. To make the long story short, you get a far quicker time-to-market.
Most importantly, when outsourcing, you get access to a global talent pool, which increases the quality of service and gives you some much-needed versatility.
Wrap Up
In the end, outsourcing is always a simpler solution. Since you probably already have too much at hand, simpler is usually a preferred option. By outsourcing, you save money, simplify your business structure, and don’t have to wait to see the results. Most importantly, depending on the circumstances, you can scale this decision up or down. Having this kind of flexibility is an invaluable asset in the business world.
