Jun 302009

There are so many options available during this difficult economic time to reduce costs. Trying to make the right decision regarding which way to go can be daunting. So many companies are making decisions that while thought to be short term, have long term effects. So every decision has to count!

With the internet, however, there are lots of ways a company can outsource functions without giving up control. In the past, if you were outsourced, you were transferring oversight to a third party. There are now effective ways to stay in control while reducing company costs.

It may be more effective to to automate a process that was previously handled manually than to give control to a third party in order to reduce administrative staff. A great example of this is payroll services such as CompuPay. You handle all the data entry and have full access to all the information and reports without having to maintain knowledge of all the laws governing payroll, a never ending series of updates.

Another example is using Quick Books. Your company information can be stored centrally with templates for entering data in a way in which you can then retrieve valuable financial data. This allows data entry to be handled by an administrative individual and then reviewed by management/owner. Another example is an HR service such as EffortlessHR.com where company and employee information can be stored, managed and the company can remain compliant, all while managing the information themselves. Along this line, when hiring, Jobing.com is also an excellent resource in the recruiting process.

The intent of using these automated systems is to free up the owner and company administrators so that they can spend more time on revenue producing activities such as sales, customer service and employee retention. There just aren’t enough hours in the day to keep up on all the changes happening in these three areas and run a business unless you have a large enough staff, and those are at a premium right now. A perfect example of this was the recent changes in COBRA because of the economic stimulus package enacted this year.

For the small business owner with 20 or more employees, this was a major interruption in business that had to be attended to immediately and has created a need for meticulous actions and record keeping. Have expert systems in place certainly helps alleviate some of the stress of this one change that occurred.

Another avenue to consider is hiring experts for specific needs. This way you do not incur additional employee expense or increase the workload of current employees to handle certain functions and needs. These experts could include trusted financial advisors, (such as financial consultants, a bookkeeper), marketing specialist, benefits coordinator, etc. You don’t have to figure all these things out by yourself and still try and run a business! If you needed a product expert, you would hire one. Think about the other aspects of your business too. This is surrounding yourself with the best to ensure that your company is operating profitably and you will be geared up for the future as the economy changes for the better.

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  12 Responses to “Is Outsourcing Right for My Small Business?”

  1. Very good article. It’s funny, when it gets tough and you need help in a pinch, it can be about more than just the money, but picking a person who you trust and who will do right by the company. Best advice that can be given, pay attention to what is coming down the road and have people and companies in mind.

    If that isn’t possible, say with the way the economy just dropped off, then you asses your best and worse case scenerio’s and pull the trigger. Look at how the person / company handles their own business in the aspects you will be needing help.

    If it’s in marketing or sales, then their website, branding, social networking and closing skills should be apparent. Anyone can put together a reco list, but look for the proof in their own dealings.

    Great post.

  2. Everybody is now feeling this financial crisis. In our office we force our employees to leave to keep their job. Also employees with leaves are allowed or extended to reduce overhead expenses.

    For employees competitiveness, we conduct in house training to prepare them for future job. :)

    thank you for your idea. this is very nice.
    .-= lucero@Small Business´s last blog ..Jun 22, Small Business Resources =-.

  3. bottomline is, outsourcing will definitely save you money if your starting a business. However, you are not helping people around you (same wage-wise) get a job or earn for a living.
    .-= Ryan@Pennyfieds´s last blog ..Luxury North GA Cabin Rental =-.

  4. Payroll is totally a great idea to outsource, but I would caution you when outsourcing for article writing and content. I myself work freelance on Elance, and so many people want to pay really cheap rates for article writing and outsourcing, but you have to keep in mind that your content will be cheap as well.

  5. Not only they reduce cost but it also decreases time spent on doing such task. Very convenient if you assign a small group or a single person to do it.

  6. Outsourcing the business will give the business owner to focus on the most important part of the business. This is also a big factor of the success of the business.

  7. Even solopreneurs can gain from outsourcing. Think of the time you spend on tasks you are really good at, ones that make the best use of your time dollarwise. Then consider all those other tasks you aren’t so good at, that eat up time you could be spending on more productive work. Why struggle with fixing your website or making a presentation pretty if you can quick hire someone to do it for you. There are lots of folks for hire at guru.com an elance.com

  8. I think outsourcing has become a dirty word, which is unfortunate, because it can be a positive move for a business. Using professionals outside of the company can help the company’s bottom line. Plus you can find really highly trained people who can work on quickbooks or manage the hr tasks, leaving a biz with time to focus on sales/marketing/customers service efforts.

  9. I can assure you that outsourcing is the most effective and easiest way to promote your small business to the world platform . Besides you have to take a minimum risk as you said but it can be minimized to a great extent if you choose the right parties for outsourcing.

  10. Outsourcing can be an excellent way to save money, but like someone else pointed out, be careful who you outsource too, esp. when it comes to content creation. You might find a writer who will write a 500 word article for $1.00, but in the long run, you will get what you pay for with articles. Lack of quality can really break your efforts if your trying to article market.

  11. If you’re new to outsourcing it can be a little daunting at first. You will find yourself spending quite a bit of time managing your freelancers and you have to hand over control to some degree. Although if you’re not happy with the work then you don’t pay. Most of the top outsourcing websites have arbitration processes in place.

    Once you get a bit more confident with it you’ll find yourself going back to your regular freelancers and the process becomes more simple. I consider outsourcing an integral part of my business. Without my trusted freelancers I’d be 3 years behind where I am now!
    Macs Wedding Guitarist recently posted..A Modern Guitarist For Your WeddingMy Profile

  12. Thanks for sharing and you are so right. Outsourcing is not something that you waltz into and let run itself – you still have to be involved and organized.

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