What Does Outsourcing Mean?
A business performs many functions, but hardly any business performs all of these functions itself. This is where outsourcing— or hiring another business to perform certain services and/or create goods— comes into play. When a business is first created, many tasks may start out being done in-house, but later these tasks may need to be outsourced in order to save time and money.
Businesses will typically outsource their most difficult tasks to another company, but even the simplest— yet tedious— tasks can be outsourced. If you’re a new business owner feeling overwhelmed by some of your business operations, here are some tasks that you can outsource to another company.
Advertising and Marketing
Hardly any successful business can get by without marketing and advertising their products/services to their target audience. However, it can cost a business a whole lot more to hire and train marketing professionals, when they can just hire a professional advertising agency to do the work for them. Professional marketing is one of the quickest ways to grow and expand a business, which is why this sector is one of the most frequently outsourced parts of a business. So if you’re trying to scale your business, you should definitely look into outsourcing your marketing efforts.
If you run your business out of a commercial building (whether you have customers/clients entering your building or not), you’re going to want to keep it clean. It’s true that cleaning is a simple task that can be done by employees, but this can keep them away from other business tasks, even if the cleaning is done at the very end of their shift. Also, professional cleaning services are trained to clean every inch of your business, from the inside to the outside, and even vents and air ducts.
Accounting, bookkeeping, payroll, taxes— anything that has to do with the monetary aspect of your business should be outsourced to a professional accounting firm. Accounting is one of the most important parts of a business, and it’s also the most tedious. A simple mistake can have serious consequences for a business, so it’s important to hire an accounting firm to take over this business operation for you. While this can be done in-house by hiring an accountant, keep in mind that this will also require you to have accounting software installed, and you’ll also have to have your accountant on your payroll.
Human Resources (HR)
HR relates to all tasks that involve your employees, but most businesses use another company to help bring in qualified candidates. While it’s simple to post your job openings on job search websites such as Indeed or LinkedIn, you’ll see better results if you choose to hire a recruitment agency that specializes in bringing companies the best talent for their business. Businesses that outsource their HR departments to a recruitment agency tend to see fewer employee turnover rates, and they build a stronger team of employees who are dedicated to the company.
Information Technology (IT)
Because we live in a highly digitalized world, even the smallest of small businesses use some type of technology to help keep their business functioning properly. Also another common and one of the largest outsourced sectors of a business, IT management costs billions of dollars to be outsourced each year. While some businesses opt to hire an IT specialist in-house, others have found that they save more money by hiring an IT company, rather than paying an individual a fair salary. Plus, an IT service can equip your business with the best cyber security possible to avoid potential data breaches.
Manufacturing, Shipping, and Logistics
For small businesses that sell products (rather than provide services), it’s much less expensive to outsource their manufacturing needs rather than to set up their own facility. When outsourcing your manufacturing needs, you may find that the company of your choice will also take care of your shipping needs as well. You can also choose to have your products manufactured domestically or internationally.
Keep in mind that there are some downsides to outsourcing. Whatever you choose to outsource, you lose some amount of control over, so make sure that you’re choosing trustworthy companies to outsource to. Another downside is that many businesses have to outsource certain functions internationally, meaning that there could be language barriers and time zone differences. Always make sure that whatever you choose to outsource will benefit y