Outsourcing: Sometimes Good, Sometimes Bad

Outsourcing, the act of using outside firms to handle work that is normally performed within the company, is becoming common practice for many small businesses. Most small companies don’t yet have the revenue to hire full-time employees to cover all of the tasks that need to be done, and sometimes business owners aren’t skilled enough in each of the areas necessary to running a business. That’s why outsourcing becomes a necessity for many companies. But the truth is that sometimes it’s the right choice and sometimes it’s not.

So here are two common misconceptions about outsourcing.

Outsourcing is a bad thing, and if at all possible, businesses should try to perform their operations internally.
Outsourcing is great, and you should try to outsource as much work as you can.

Let me just start off with saying that outsourcing is not a bad thing in and of itself. In a fast-paced marketplace it allows you to be more efficient and competitive. It also allows you to avoid large expenditures in the beginning stages of your business. One of the big draws, however, is that it also lets owners focus their efforts on more critical tasks, like growing the company.

The problem with outsourcing, however, is that many small companies see it as the easy way out instead of carefully assessing what really needs to be outsourced and what shouldn’t be. Outsourcing is not a short-term solution to a long-term need. And it also shouldn’t be used strictly for cost-saving purposes.

What you should do is hold on to operations and areas that define your business and make it what it is. Whatever is most important to the company, that’s what you keep close. All other less strategic operations are fair game. Just make sure that you thoroughly take all costs into consideration, because some might creep up on you and end up costing more than you bargained for.

Some of the more common tasks outsourced by small companies are human resources, payroll, graphic design, public relations, sales and marketing, and finance. Another outsourced operation that is growing in popularity is virtual assistants, which provide administrative support. This kind of assistance is not a good idea for a company that prides itself in customer service though.

If you do decide to go ahead and outsource certain tasks, there is one important thing to keep in mind. You should really have someone to act as a liaison who can manage and track progress and monitor results. Tasks can be outsourced, but the accountability always remains within the company.