4 Ways Your Small Business Should Use Outsourcing
Outsourcing has long carried a negative connotation thanks to American companies that shed internal jobs and had them carried out by lower-cost personnel in other countries. However, outsourcing is a valuable tool that even small businesses can utilize – without sending those tasks overseas.
Yes, outsourcing is one way your small business can save money. That’s the point. It’s prohibitively expensive for a small business to have a fully manned company with full-time employees who can tackle every last task. That takes scale that is often too difficult to achieve in your first few years.
But it doesn’t always pay to outsource – you have to pick the right situations. The following are four tasks that small businesses can benefit from outsourcing, as well as the underpinnings about what makes outsourcing such an effective strategy.
Logistics: One of the best ways you can use outsourcing is to fill in knowledge gaps.
Most people who start out a small business for the first time aren’t going to be full-blown jacks-of-all-trades who are just as comfortable with filing taxes as they are designing a corporate logo. They tend to be specialized. Some are product geniuses that can design innovative craft tools or immersive apps. Some are born salesmen that know how to talk to people from every walk of life.
But many of them probably don’t know how to tackle the uber-complex task of managing a warehouse and making sure items are properly accounted for, stored and eventually shipped.
Logistics, then, is a skill that makes perfect sense for outsourcing. That’s because not only is it difficult to find, and pricey to hire, a manager with that kind of technical knowledge – but it’s hyper-expensive to also own and operate the infrastructure (warehouses, machines and distribution systems). A quality logistics firm, however, helps you cut down on those massive up-front costs, while still getting the expertise you need – and they’ll be able to scale up with you as your business expands.
Marketing: Another area where outsourcing comes in handy is creative work.
Graphic designers, writers, editors and SEO experts all have varying blends of creative and technical skills that are difficult to pick up from a couple of online courses. Typically, these are people that started with a high level of natural creative talent and have worked their whole lives to hone their skills.
However, especially early on, your small business likely won’t have enough need to justify a creative worker in the office trying to fill 40 hours of work each week. That’s something that comes with scale and the budget to not only afford the worker, but creating all of the marketing materials and advertising placements they’ll come up with.
When you’re starting out, consider outsourcing that work to a marketing/public relations firm that can still provide you with specialized services, but that will only charge you for the lean hours you need.
Information Technology/Cybersecurity: Highly technical work is another popular area for outsourcing. A 2019 Clutch survey found that technical tasks are the most outsourced, with digital marketing (34%) and IT (37%) among the top three. Speaking specifically to cybersecurity, a survey of U.S. and European companies – Underserved and Unprepared: The State of SMB Cyber Security in 2019 – found that 77% of small and midsize businesses expected to outsource at least half their cybersecurity needs within the next five years.
This again speaks to the idea of filling in knowledge gaps. Even the most adept of business leaders might now know how to establish a cloud storage system for their employees or perform a vulnerability assessment. That’s OK. But you also might not have enough technological needs to justify a full-time hire right away. That’s OK, too, and that’s where a third-party IT or cybersecurity provider comes in. You can work with these providers to assess what infrastructure and services you need, and hopefully come up with a solution that fits within your budget.
And again – as you scale up, you eventually can either use more of their services, or hire a FT employee who can dedicate all their time to your specific technology and security needs.
Accountant Services: The aforementioned Clutch survey listed digital marketing and IT among the top three most outsourced tasks. The last one? Accounting, also at 37% of all respondents.
Large businesses almost always have accountants on their staff because of the sheer complexity involved in keeping the books balanced day in and day out. Someone has to manage all the numbers generated by thousands of customers, thousands of transactions, hundreds of vendors, not to mention a team of employees that constantly enter sales, file expense reports and so on.
Small businesses are trapped between a rock and a hard place, though. They still have numerous accounting needs, but they also almost certainly don’t have the budget to bankroll an on-staff accountant.
It’s a common problem – which is why small businesses rely so heavily on accounting firms.
McManamon & Co. fills this specific need, providing accounting and other business services to small and midsize firms that haven’t yet reached the scale to bring on their own full-time accounting staffs. We solve a number of headaches: We manage your taxes throughout the whole year so there’s less frustration and stress during tax season, we help keep more accurate records so you can stay on budget and stay out of the IRS’ crosshairs, and just like an in-house accountant, we’re there to answer accounting questions whenever you need it – but at a cost you can actually absorb as you funnel money into growing the business.
Better still: We’re located right here in the U.S., so you’re not shipping jobs overseas.
If you have accounting or other business-development needs, let’s talk. Call 440.892.9088 or contact us online, and we’ll find a solution that fits your budget but addresses your needs.
Tags: accounting, McManamon, outsourcing, small business | Posted in accounting, McManamon & Co., small business