How To Use Outsourcing To Grow Your Small Business

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Running your own business is not only an exciting adventure, it also has the potential for huge rewards. But finding the time and resources to scale without taking on too much risk can be challenging.

Business scaling with outsourcing non-essential tasks frees up your time and resources for other crucial responsibilities. You’re only one person after all—you can’t do it all!

Through outsourcing, you can focus your time and effort on important tasks and projects while reducing the risk of over-extending yourself. In this article, I’m going to show you how to use outsourcing to scale your small business.

What is Outsourcing?

Outsourcing is a practice where you hire a third-party company or independent freelancer to provide a service, perform tasks, or handle operations for your business.

Often, companies use outsourcing to fulfill roles not possible in-house, cut labor costs, or to spend more time focusing on core components of their business. 

Core components are daily tasks central to your business, ones that affect your present and future performance and improve your profit. 

Regardless of why you need it, business scaling with outsourcing must be strategic to be effective, and everyone requires a different approach. 

An example of outsourcing

Starting any small business, running a side hustle, or working as a freelancer can feel like a juggling act; you’re left handling tasks like accounting, customer support, marketing, IT, social media marketing, and web design, all at once! 

Most of us don’t have the time to fulfill those roles; outsourcing can help. 

For example:

Let’s say you want to provide an all-inclusive freelance writing service.

You’ll need a web designer, an SEO specialist, and a social media marketer to build your business.

Once it’s up and running, you may need an editor, a graphic designer, a researcher, and even other writers on an ongoing part-time basis. 

Whether the tasks are essential, non-essential, full-time, or part-time, you can outsource all of them as and when you need them. 

What are the Benefits of Outsourcing?

Outsourcing is a popular buzzword these days, as businesses of all sizes turn to cheaper and often higher-quality destinations like India to outsource their non-core business activities.

And statistics back this up:

So, why the big boom?

Is it time to change the “I can/must do everything myself” badge of honor mentality and outsource those tedious back-office tasks? Could outsourcing give you a competitive edge?

Let’s find out why outsourcing is a hit across all industries.

Access to a variety skill sets

Looking to expand your team but don’t have the resources for full-time employees?

You’re not alone.

With outsourcing, there’s no need to invest in recruiting and training staff, as you can find and employ who you need when you need them.

Around 37% of small to medium businesses use outsourcing to handle at least one of the following business processes:

Reduced overhead costs

Outsourcing enables you to hire proven talent, especially for non-essential tasks, on terms that work best for your business and its goals.

The lower labor costs between western countries and Asia means you can employ someone in India for up to 60% less than in the US. And low costs do not mean less quality; the level of service is often equal to and higher than you’ll find at home. 

Outsourcing can free up more of your budget for growth

Business scaling with outsourcing removes the need for costly infrastructure investment, as your outsourcing partner will already have the infrastructure in place. 

Helping free up your budget to focus on your core business functions (those daily tasks you have to do) gives you the financial energy to build your brand and grow your business. 

Test new ideas and product/service concepts

Speed and originality are often of the essence in business, especially when bringing a new product/service to market. 

Experts with experience and skills can deliver high-quality, unique results, and they’re also less likely to make costly mistakes. 

That combination decreases the time of testing and converting your ideas into products/services and increases your company’s value-added proposition, helping you establish a foothold in your niche.

Business needs evolve – so can you by outsourcing and scaling

I’m sure you’ve heard the saying “timing is everything”, and it’s as accurate for business as it is for delivering the perfect Super Bowl touchdown pass (in other words, it’s important).

Outsourcing enables you to evolve when needed and without the overheads of hiring a full-time employee, allowing you to recruit and scale without delay.

What Can a Small Business Outsource?

Small and micro business owners, side-hustlers, and freelancers looking to launch, manage, and grow their small businesses can all outsource the following tasks.

Accounting and bookkeeping

Few business owners are skilled bookkeepers, yet 60% of us still do it in-house, and that’s not always good for business.

For example, research shows that small and medium-sized businesses (SMBs) spend 24 days every year, at an average cost of $22,000, managing their sales tax compliances. 

And, the IRS estimates that 40% of those same companies pay around $845 in late or incorrect filing penalties. 

Outsourcing accounting/bookkeeping tasks to a payroll expert can increase small business tax compliance and decrease costs by up to 18% compared to businesses that do it in-house.

IT support

If information technology (IT) isn’t one of your strong points (I hear you), that’s OK; it doesn’t have to be to run a successful business. 

That requires working to your strengths and focusing your energy on where it’ll produce the best results. 

Learning the ins and outs of a new CRM system isn’t necessary, and honestly, it’s better left to an IT expert. 

And they can help you in other ways too:

From personal experience, I found that outsourcing IT removes distractions that otherwise delay us from achieving our worthwhile goals and achievements, not to mention stress!

Customer service 

Today’s customers are active 24/7, browsing and asking questions that determine their buying decisions. 

And it’s proven that they expect instant answers and resolutions to their queries; otherwise, they’ll shop elsewhere. 

Check out the following stats:

It’s unrealistic to try and fulfill your customer service role alone, and with so many 3rd party customer support options available, you don’t have to. 

Marketing and sales

Sales and marketing are essential to every small business owner, but having a full-time, in-house marketing and sales team isn’t viable for most of us.

However, you can get a flexible and affordable solution by outsourcing your marketing and sales needs. 

Here are the top 5 benefits of outsourcing marketing:

  1. You’ll have the support of marketing experts experienced in your niche.
  2. Experts provide a fresh perspective on old marketing campaigns.
  3. You can quickly scale your marketing campaigns up or down.
  4. You’ll get the best optimization and technology.
  5. And you can assess your ROI (return-on-investment).

Market outsourcing can reduce your costs significantly, as you pay only for the services you need, which is cheaper than hiring a permanent in-house marketing professional.

Search engine optimization (SEO)

While most business owners know that a finely tuned SEO strategy can boost their online rankings and increase sales, few of us know how to run one.

Done right, it can provide immense ongoing value to your business, but it’s not cheap (averaging between $1000 and $2000 per month), so do your research and find the SEO option that’s right for you.   

You’ve got 3 SEO outsourcing options:

Content production

Producing accurate and relevant content isn’t easy; it takes time, research, and understanding your market, target audience, and SEO to get it right.

And content production includes pretty much everything, such as writing, video production, images including pictures, graphs, infographics, and social media management. 

Outsourcing your content production opens the door to skilled professionals that can help engage your ideal clients and speed up your brand’s success.  

And it’s a popular choice:

Web design and development

I spent 3 months building my first WordPress website (it was big), and while I learned a lot, it wasn’t a process I wanted to repeat.

I outsourced my 2nd website. It took 2 weeks and was better than my first.

Sure, it cost me, but not that much because while the average US hourly rate is $100-$200, in Asia, it’s as low as $20-$40.

The benefits aren’t just time-saving. A professional website developer can ensure your site has a clean, modern UX (user experience), is scalable, and SEO optimized.

HR and recruitment

HR and recruitment are often outside the skill set of many small business owners. And that’s understandable because of the complexities involved with finding, attracting, and keeping people that suit your business needs.

Outsourcing your HR and recruitment provides you with support and guidance from experienced professionals trained to find the perfect employee match. 

They can also assist you with employee compliance, benefits, and payroll requirements without the costs of paying in-house staff and that extra office space.

5 Steps to Scale Your Business with Outsourcing

Every type of business scaling with outsourcing begins by assessing your company’s needs to maximize your return on investment. 

Next, you must select your provider and negotiate the contract, then pass control over in a way that benefits your business.

Here are some strategies to help you do it: 

1. Identify the task or function you need to outsource

You could outsource many roles, but your goal is to establish which ones are most beneficial to you.

Essential roles relative to your core business are often best kept in-house. For example, if you’re a nail artist, networking and meeting clients is a role you should do yourself, but you could outsource administrative tasks to free up your time.

Before outsourcing, ask yourself the following questions:

2. Segment your tasks/functions into projects

No 3rd party service provider knows your business’s growth needs like you do; that’s why outsourcing your business roles can be challenging.

You can simplify the process by segmenting your tasks into projects and creating a development plan to ensure everyone understands your goals.

Consider the value each project addresses, outline the work you need doing and how they must complete it. And be specific, so no one makes assumptions.

The following questions can help you segment your tasks:

Use your development plan to guide your outsourcing decisions for your business and define your tasks into projects to ensure everyone understands and nothing is left to chance.

3. Identify potential outsourcing partner

Your outsourcing success depends upon choosing the right partners for your business.

While many business process outsourcing (PBO) companies are available, you need to find those that fit your individual needs.

But how do you tell whether one is better than another?  

Start by reviewing their reputation, checking out their credentials, and then ask the following questions:

Once you׳ve narrowed down your list of potential outsourcing partners, your next step is to evaluate their strengths and weaknesses

4. Evaluate the strengths and weaknesses of each potential partner

Before joining forces with an unknown outsourcing partner, it pays to evaluate their capabilities (strengths and weaknesses) to make sure you’re entering a positive work relationship.

Compare partners by assessing the following elements:

When you’re happy with your new partner’s credentials and abilities, it’s time to implement your business idea.

5. Implement your business idea

Sustainable growth is the goal of almost every outsourcing business, but to ensure that happens, you must keep your finger on the pulse and never miss a beat.

Now is when you need to ask and answer the following questions:

Your business idea is just that – yours – but you don’t have to do it all alone.

Over to You

From marketing to administrative tasks to content creation, you can outsource many tasks to skilled professionals and free up your time, money, and resources.

The key to successful business scaling with outsourcing lies in determining which tasks can be outsourced and identifying a service provider who can deliver high-quality, cost-effective results within the allotted time frame.

After that, it’s plain sailing.

This portion of our website is for informational purposes only. Tailor Brands is not a law firm, and none of the information on this website constitutes or is intended to convey legal advice. All statements, opinions, recommendations, and conclusions are solely the expression of the author and provided on an as-is basis. Accordingly, Tailor Brands is not responsible for the information and/or its accuracy or completeness.

Natasha Ivanovic is a Vancouver-born creative writer that started her writing career as a freelancer while studying for her Master’s in Investigative Psychology. On the weekends, she writes short stories for her blog, TheLonelySerb, and cuddles with her bulldog, Bob.