Why outsourcing should form part of your business growth strategy
Why your business should be outsourcing
A common barrier to growth is reaching capacity. You physically cannot produce any more using the resources you currently have. You feel frustrated because you know the demand is there. You consider the available options:
- Putting more of your time into the business
- Asking employees to put more of their time into the business
- Recruiting new employees
As the business owner, all three of those options will require your time – a resource which is already maxed out. Simply adding more pressure on your time won’t solve your problem, it will most likely lead to burn out.
The good news is, there is a suitable solution – outsourcing.
The benefits of outsourcing
Outsourcing is a great way for any business owner to buy back time. You choose the business functions or skill sets to contract out and utilise the time freed up elsewhere. The time you gain back could be reinvested back into the business into another functional area which needs your attention. You might use that time for a totally separate project or business venture. Or you could enjoy some time back for yourself to explore a hobby or just take a well-earned rest.
Aside from getting time back, outsourcing is popular for the following benefits:
Cost savings: A common place to start with outsourcing is to outsource lower-skilled tasks. Often, the cost per hour will be cheaper when compared to the cost of your time. Outsourcing also saves on the costs associated with recruiting and employing a new member of staff.
Improved efficiency: Outsourcing to a person or team with a dedicated skill set means they can achieve the output quicker. If your output has been held up by a bottleneck in production, this could ease the pressure throughout the production line.
Access to specialist skills and resources: Recruiting specialist skills you currently lack may not be an option – you may not have enough of a need to warrant an employed role, and the skills set may be so specialist it is too expensive to employee them. With outsourcing, you can access the skills based on exactly what you need without paying for more.
Identifying the right areas to outsource
Once business owners recognise the opportunity outsourcing can bring, it is time to identify the right areas to outsource. A logical place to start is to identify those tasks which are lower skilled, perhaps repetitive or admin based. It would be cheaper for these tasks to be completed by someone else because the value of your time is higher.
You should also consider those areas which are not your strongest skill set. When you first start a company, you typically take responsibility for all key functional areas – sales, marketing, HR, operations, finance. As the company grows, your basic knowledge of these important areas may no longer be fit for purpose, and potentially expose you to more risk. You can read more of our advice on how to run a business successfully beyond the numbers here.
How to make outsourcing a success
A reason why business owners put off outsourcing is because it involves a loss of control. You are handing over a part of your business entrusting it to someone else. Here are some top tips to help make outsourcing a success:
1. Do your research. Meet with different providers and find the right person who fits your business. Ask your network for recommendations.
2. Have a detailed contract in place. Just like any other financial agreement, clear clearly defined terms and conditions which detail everything about the work being outsourced: scope of the project, the timeline, the cost, terms of payment. You also want to include your expectations for the level of service, the quality of work, and the turnaround times.
3. Monitor performance and communicate regularly. Especially in the beginning, schedule regular catch ups for both parties to discuss the work and iron out any teething problems early on. Monitor the performance regularly to ensure the service is meeting your expectations and delivering for you.
How much time could you save outsourcing to your accountant?
We support forward thinking businesses from the start of their business journey. If you’ve reached the point where you would like to free your time from the financial aspects of running a business you could consider outsourcing your bookkeeping, compliance needs and even your payroll.
At WoodWhite Accountants we provide FREE, no obligation consultations. Call 0118 997 7100 or email enquiries@woodwhiteaccountants.co.uk to discuss your needs.
