How to Strategically Outsource to Maximize Efficiency and Productivity

How to Strategically Outsource to Maximize Efficiency and ProductivityThe challenge for any small business is to make the most of limited resources. You can’t pour millions into product development or marketing campaigns like major corporations. But you can do things faster, better and more efficiently, which will help you please customers and win their trust and loyalty.

One of the most effective ways to streamline your business and to get it running at maximum efficiency is outsourcing. Hiring specialized outside firms to do specific jobs or take over certain business processes will save you money and make your business run better.

However, this part is not a secret. Businesses have been outsourcing for essentially forever. It’s been most common in the past half-century as transportation costs have plummeted and it’s become far easier to move goods and people around the world. But outsourcing doesn’t always mean shipping production overseas. There are lots of other ways you can outsource to make your business better. And the key to doing this well is taking a strategic approach to outsourcing.

Here are things to keep in mind when getting outside help for your business.

Outsource What Others Do Better

The success of your company will depend heavily on the people you hire to work for it. And while you’re likely very proud of your team for having helped you build the business into what it is today, it’s important to accept that there are limits to what you can expect people to do.

You can’t ask someone you’ve hired to manage payroll accounting to be an effective recruiter. And it’s unfair to expect your trade show and convention coordinator to know how to generate new leads through social media. Sure, these individuals could spend some time training, and you could give them the chance to learn on the job. But this will take longer, and more importantly, it’s won’t produce the same results.

The key is to focus on tasks and functions more specialized firms are going to do better. Investing in a digital marketing team (when no one on your team knows a thing about it) will produce far better returns on investment than trying to do everything yourself.

Outsource to Avoid Infrastructure Costs

When deciding whether to outsource something or keep it in-house, a good thing to look at is the infrastructure costs associated with doing it on your own. For example, your two-person IT team might be able to handle small phishing attempts and other cybersecurity threats. But as you grow and you become more vulnerable, they might no longer be able to help.

And when you expand your IT team, it isn’t just a matter of adding a few employees. You typically need to invest in new hardware and software, all of which will not be cheap. Building this infrastructure is going to cause your overhead to skyrocket, and this can be terrible news for the health of your company.

A specialized IT firm has the incentive to build this infrastructure because they are going to use it to service many different clients, meaning each party only needs to pay a fraction of the cost. This way you get the same (or better) service for much less, freeing you up to dedicate your resources to more productive tasks.

Outsource What Takes Up Your Time

Time is money. It’s true everywhere, but it’s even more true in a small business. Every second you spend on unproductive tasks takes you away from growing the company. Some of these things are necessary, but that doesn’t mean you need to do them yourself.

For example, you could keep all of your HR operations in-house. Or, since many of these functions—such as benefits management, payroll and onboarding—are time killers, it might be smarter to hire a professional employer organization (PEO) to do them for you.

Removing these tasks from the day-to-day operation of your business will free both you and your employees up to focus on other aspects of the business that are more important to growth. Instead of having to sign expense reports or payroll checks once a week, you could get a monthly briefing from your PEO, making your business far leaner and more efficient.

Outsource in Your Best Interest

While outsourcing is something nearly all businesses will do at some point or another, remember that there is such a thing as bad outsourcing. If the firms you work with don’t provide you with a better service, better results, better costs, or all three, then there’s a good chance you’d be better off keeping things in-house. But keep your eyes open for opportunities to get some help and make your business more efficient and productive.

About the Author: Jock is the founder of Digital Exits, an online brokerage service specializing in the buying/selling and appraisal of small businesses. He has been a business owner nearly his entire career and has worked extensively with B2B firms. He writes frequently about his experiences to help other entrepreneurs, and his work has been featured in publications such as Forbes, Business Insider, Entrepreneur and CNBC.

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