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Outsourcing for Small Business

24-01-2023 10 min read

Outsourcing for Small Business

Small businesses are crucial to the local economy and the entire market. As a rule, they do not have a large initial capital, so they must quickly gain a market position that will allow them to develop further. However, in the development cycle of every company, there comes a moment when the owner cannot take care of every area of the company's operation. It is due to both lack of time and lack of specialist knowledge. The solution to this situation is outsourcing, which is cheaper than hiring additional full-time specialists. In addition, thanks to the existence of several models of outsourcing, it is a highly flexible solution that allows it to be adapted to the needs of each company.

Of course, the key to success is understanding the idea of outsourcing and the benefits of outsourcing because only then will you be able to assess whether this solution is for you. Indeed, it is essential to find a trusted software development partner who will guide you through the meanders of outsourcing. It is also necessary to understand that, like any other solution, outsourcing is also associated with problems. We discussed them in detail in the article "Problems of Outsourcing & How to Avoid them." Nevertheless, the benefits of outsourcing are much greater than its disadvantages, and its growing popularity is only a confirmation of this.

Outsourcing for Small Business

There is a misconception that outsourcing is a solution only for large companies carrying out many projects. Nothing more wrong! Outsourcing is an excellent option for all companies: startups, small and medium-sized enterprises, and giant corporations. For this reason, more than a third of SMEs now outsource at least some of their tasks.

Outsourcing is beneficial for any company, regardless of size. However, in the case of small companies, these benefits are more visible and transparent, as outsourcing helps small businesses achieve more and outsource critical tasks/processes to external specialists without significantly burdening the internal team.

Effective small business outsourcing involves separating tasks that should be outsourced and tasks that, for various reasons, should be retained within the company. It is due to the business strategy of the company and the relationship with the outsourcing provider.

The Problem with Outsourcing for Small Businesses

The Problem with Outsourcing for Small Businesses

As ridiculous as it sounds, small businesses' biggest problem with outsourcing is themselves. Even the most talented and creative entrepreneur cannot do everything by himself. He puts off hiring staff because he believes that he has sufficient knowledge about every area of running a company. In the beginning, such thinking is natural, but as the company develops, it turns out that for the company to move to a higher level, it is necessary to hire appropriate specialists. If it doesn't happen at the right time, either the company plunges into chaos or the new staff has to start their work by putting all processes in order, which is time-consuming and distracts attention from core business tasks.

Another issue concerns costs. It seems that small businesses manage their budget very well, but this is not always true. It happens that a small business owner treats his company's budget as his private wallet, resulting in the fact that he does not know the actual expenses of his company. Because it does not analyze costs, it often makes decisions that are not entirely rational from a financial point of view. For example, he hires a full-time accountant, but the tasks for this employee are only once a month. In such a situation, it is worth considering whether outsourcing these tasks would not involve significant cost savings for the company.

In small businesses, it can also be a problem to hire an employee who, in the business owner's opinion, should be universal, i.e., must be able to deal with, for example, marketing, sales, and accounting simultaneously. It may look attractive, but it needs to be corrected. Different roles require continuous professional development, and you cannot expect an excellent salesperson to become a great accountant simultaneously suddenly.

Benefits of Small Business Outsourcing

Benefits of Small Business Outsourcing

If you are reading this article, it means that your time is filled to the brim with various business tasks, and you are looking for an idea to solve your problems. Outsourcing is an excellent solution for small businesses as it allows companies to save money and free up internal resources. It will enable you to focus on the core business of the company and its further development. If you are still hesitating, find out the benefits of outsourcing for small businesses.

Focus on Core Business Tasks

Thanks to outsourcing, you can devote your time to other critical tasks for the company instead of wasting time on bookkeeping or the long-term recruitment of human resources. You can delegate such tasks to specialists and take care of tasks that significantly impact the achievement of your company's goals.

Increased Productivity

Most small business owners find that outsourcing improves their company's productivity. By outsourcing difficult and time-consuming tasks, you can better manage time and improve the quality of internally performed tasks.

Expert Services

Outsourcing for small businesses offers a safe way to hire an expert for a specific job without sacrificing quality. By delegating the right tasks to more experienced people, small business owners are more likely to achieve better results than if they were doing the same work themselves. In addition, experts have specialist knowledge (e.g., regarding sales tax compliance), which protects the company from falling into the trap of not knowing the law.

Cost Savings

Outsourcing allows for significant cost savings, which is crucial for any company. You can perfectly match outsourcing to your needs, thanks to various outsourcing models.

Better Business Continuity

It is no secret that the reality around us is changing extremely dynamically. One day you are working on many projects, and the next day your company loses all its equipment due to theft. Thanks to Outsourcing providers, you can minimize some risks and ensure business continuity regardless of external circumstances.

When should you Consider Outsourcing?

When should you Consider Outsourcing

Outsourcing has many undoubted advantages, but it is essential to use this solution when your company is ready for it. Several factors make it clear that now is the time to consider this solution. Below you will find a few institutions that clearly show the time has come for a change.

Your Business is Growing, and you still Lack Time

Everyone dreams of their companies developing dynamically. However, as the company grows, it is necessary to hire additional staff because the number of tasks gradually exceeds the existing staff. The problem is that hiring full-time employees is expensive and time-consuming. In addition, during the company's dynamic development, it is sometimes difficult to determine whether a given specialist will be needed for a month or a year. In this situation, outsourcing is a quick and cost-effective solution that will allow you to focus on further company development.

Lack of Knowledge

No man would be an expert in every possible field - from management, recruitment, sales, and marketing to finance. Your extensive knowledge has allowed you to create and develop a company. Still, development is associated with the need to acquire specific specialists. At the same time, you feel that you cannot afford full-time employees yet. In such a situation, outsourcing is the perfect solution: you can strengthen your company with additional employees with the right level of knowledge at any time, depending on your needs.

Seasonality

Many industries are characterized by high seasonality or at least significant sales peaks at a specific time. For this reason, many companies hire additional employees, e.g., during Christmas or the holidays. Hiring employees for a short time is a big challenge because employees prefer permanent work. Outsourcing will help solve this issue as it adjusts staffing levels depending on your needs, helps you stay productive, and avoids hiring and firing.

Lack of Focus on the Main Tasks of the Company

A large number of tasks and lack of time make it increasingly difficult for you to focus on the critical activities of the company and tasks that generate income. It causes the company to stop growing, which, given the highly crowded market, is the first step to collapse. Outsourcing simple, repetitive tasks will give you more time and space to focus on priorities.

What could Small Businesses Outsource?

What could Small Businesses Outsource

Every business is different, but almost every aspect of your business can be outsourced. It depends on your preferences, business strategy, needs, and openness to cooperation with an external outsourcing company. Below you will find the most typical areas outsourced by small businesses.

Website Design

Nowadays, you can create a simple website using ready-made templates. Such a page may fulfill its tasks at the very beginning of your business. However, with the company's development, creating a professional website that will respond to the needs and expectations of your customers is a must. Creating a great website or creating a mobile application from scratch is worth entrusting to a software development company because hiring the right specialists on your own will be unprofitable and very difficult to implement. Then it is worth considering outsourcing to Poland because Polish developers are among the best in the world. At the same time, they are competitively priced. No wonder many Polish companies provide outsourcing services. We described the benefits of this solution in the article "Why Choose Outsourcing To Poland?"

Information Technology

IT solutions usually require specialist knowledge and skills. Creating a mobile application or a website that meets users' expectations is a task beyond the capabilities of small and medium-sized companies because they do not have the right specialists.

For this reason, IT outsourcing is popular among companies of all sizes. Software development companies have access to a vast talent pool and extensive experience implementing even the most demanding projects. In addition, the costs of offshore outsourcing services are definitely lower than in the case of local suppliers. You can learn more about offshoring from our article "Offshoring your project - why is it worth it?".

With IT outsourcing, you can delegate all management tasks to a managed service provider or work with an on-demand company to help with urgent issues. It is an ideal solution for small businesses.

Accountancy

Accounting is an area that, especially for small companies, takes a lot of time and is associated with unnecessary stress. Financial regulations are not always clear, so every company needs an accounting specialist, which involves costs. In addition, it is an area where it is easy for human error, and the small business owner bears its financial consequences (e.g., penalties, fines).

For this reason, many companies decide to outsource accounting, as this solution is definitely cheaper. It is estimated that in the case of accounting outsourcing, small businesses save about 20%. The liability issue is also important: in the case of outsourcing, the responsibility for errors lies with the outsourcing company.

Human Resources

The concept of human resources covers many functions, from recruitment to hiring and managing personnel. Especially in small companies, these tasks do not require a full-time specialist, which is why small business owners usually take over this function. It is not a good solution because this area requires expertise that business owners only sometimes have. In addition, the recruitment process itself - despite the use of virtual assistants - is often long and tiring and distracts from the company's key issues.

In such a situation, outsourcing this area is an ideal solution. Outsourcing helps companies not only with current employee issues but also allows companies to increase staff based on seasonality and ongoing projects.

Customer Service

Having a professional customer service department is not always profitable for small businesses. In addition, the person who deals with customer service is not always focused on acquiring new customers. For every company, both areas are essential. The most profitable option is to outsource customer service, allowing the company to focus on acquiring new customers.

Outsourcing this area is estimated to save companies from 30% to 50% compared to hiring full-time employees.

Logistics

Streamlining order fulfillment, warehousing, and delivery operations by outsourcing them to third-party vendors is an innovative solution for any business. It can result in significant cost savings while providing better customer service - regardless of the size and type of products you sell.

Summary

Outsourcing allows you to do more tasks and focus on areas that interest you. You can outsource non-important tasks that take up a lot of your time. Still, you can outsource tasks critical to your business, but you need more employees with specific qualifications. It depends only on you what areas of activity you outsource. Outsourcing allows you to save money and gain a competitive advantage simultaneously.

As the best product development company, we understand the importance of outsourcing for small businesses. If you would like to talk about outsourcing with our specialists, make an appointment for a free consultation at a convenient time. We have been implementing outsourcing projects for several years and are happy to share our experience.

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