Outsourcing has become a popular phrase in today’s business environment. Needless to ask why this is so – the reasons are all over the place — increased cost-savings, access to less-expensive expertise, greater flexibility and more. At the onset, outsourcing was seen as a business solution for only large organizations and businesses due to the cost involved. Thankfully, this trend has been reversed with the advent of internet and improved technology. Small business outsourcing is also becoming popular because of the benefits mentioned earlier.
So, Is Small Business Outsourcing Worth Embarking On?
Perhaps you should see for yourself and be the judge whether or not you should consider leveraging outsourcing to run your small businesses;
Cut Back Capital Cost
While cost-cutting is not the sole reason to leverage outsourcing, it is obviously a major factor. Of course, the reason why you are in business is to increase net profits, which can be better achieved by reducing costs associated with setting up and running a business.
Small business outsourcing and just any outsourcing will help translate fixed cost to variable cost, make funds available for business expansion, and help a small business owner eliminate huge expenditures, especially at the onset of the business. These will in turn help your business to kick off on a profit-oriented manner.
Greater Competitive Advantage
Competitive advantage in business comes through major ways such as lower product price and quality customer service. And, you can attain or achieve these better by leveraging outsourcing. Businesses that incur increased overhead costs by hiring more employees in-house would ultimately pass the cost to their customers in form of increased product price. As a result, their customers would rather seek out a business that offers similar product at a lower price.
In the same manner, consumers will gravitate more to a company or business that offers quality customer care than the one that takes ages to resolve customer complaints. Outsourcing solution is the secret to gaining greater competitive advantage.
Incur Less Labor Cost
Recruitment and human resource management generally add up to increased business running cost. Hiring, training, re-training, compensations and other costs that come with using in-house manpower intensely can be overwhelming. On the contrary, small business outsourcing eliminates most of these costs. This is because you are not actually hiring a group of employees, no cost of creating office space and acquiring working gadgets, no need for additional compensation or allowances, and you are not obligated to provide health insurance. Once you pay a one-off fee (which is usually relatively lower) to the outsourcing vendor, the rest is history.
Besides, you are indirectly spreading the risk that comes with owning and running a business when you choose to embark on small business outsourcing.
Daven Michaels is a New York Times Best Selling Author and CEO of premiere global outsourcing company, 123Employee. The company employs hundreds of young bright individuals on three continents. His International event, Beyond Marketing Live! inspires entrepreneurs build & grow their business with revolutionary new theories and systems allowing them to design the business and personal lifestyle of their dreams.