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What is Outsourcing and When to Implement it

Wondering if you need to hire an outside freelancer or marketing agency? Start by asking yourself the following questions.

As small business owners, your time is your most valuable resource and you need to get as much out of it as possible. If you want to save time without sacrificing your productivity, knowing when to outsource work is critical.

Determining when to use an outsourcing company can be a challenging decision, as there are some aspects of your business operations that are probably best kept in-house. Therefore, how can you figure out when it is time for you to use outsourcing companies for some of the work on your plate?

Take a look at a few important points below, and do not hesitate to reach out to an expert who can help you.

What is considered outsourcing?

So, what is considered outsourcing? Outsourcing refers to the process of taking something that you have done in-house and hiring an outside contractor or agency to help you.

For example, you might have handled all of your website design in-house, but now, you want to work with a digital marketing agency that can help you not only manage your website but also use your website for marketing purposes.

There are a variety of additional tasks that companies outsource as well. They include:

  • You might partner with an outside company to handle your IT needs.
  • You might work with a shipping service provider to get your orders to your customers.
  • You might also contract with a warehousing company to handle hardware storage.
  • You might hire an outsourcing company that specializes in social media marketing to have a competitive advantage.

These are just a few of the top examples of common situations where companies or small businesses might decide to outsource some of their needs.

Benefits of hiring outsourcing companies

When you take a look at your business plan, you probably want to keep your overhead expenses as low as possible. Why would you hire outside help to handle something that your in-house team can do?

Some of the top benefits of hiring outsourcing companies include:

Cost savings

There are situations where it could actually be less expensive for you to outsource your work.

For example, if you want to handle all of your IT needs in-house, you will have to purchase a lot of specialized equipment. If you only use this equipment from time to time, it might not be worth it.

Instead, you can simply contract with an outside IT firm that already has access to the hardware. This means that you can use the best hardware and software when you need it without having to purchase it yourself.

Access to specialized skills

Are there situations where you need access to a specialist? It can be expensive to bring on a specialist for a short time, but you still need access to those skills occasionally.

This is another situation where outsourcing services are beneficial. When you outsource your needs to a third party, you get access to specialized skills that can help you overcome specific hurdles and keep your business processes on track.

Increased efficiency and productivity

If you outsourced help to a third party, you work with a team that specializes in a specific area. They know how to get the job done quickly and properly on the first attempt.

The end result is that outsourcing companies can lead to a dramatic increase in efficiency and productivity, making it easier for your business to compete in a challenging environment. Work with a third party that can help you address specific inefficiencies in your business model.

Improved focus on core business functions

You have a lot to do on a daily basis, but you might feel like you are constantly pulled in different directions by a variety of small tasks and needs.

If you outsource those non-core tasks to specialized contractors, you can spend all of your time and efforts focusing on your core business functions. This could mean that you increase the quality of your products and services, much to the delight of your customers.

Increased flexibility and scalability

Handling operations in-house often requires purchasing special equipment and hiring specialists to run those operations. It can be difficult to increase and draw down those departments over time, and that is where outsourcing can help you.

Outsourcing services simply provide you with more flexibility and scalability. You can change your subscription model to suit your needs, making it easier for you to adjust your business model with the ebbs and flows of your industry.

These are some of the top benefits of outsourcing non-core tasks, but when is the right time for you to consider outsourcing?

When should you consider outsourcing services?

Knowing when to outsource work is critical, and there are a few specific situations where it could be beneficial for you to outsource your work.

There are a few key factors in determining when to outsource. Some of the most common situations where outsourcing can be beneficial include:

When you need specialized skills

If you need access to specialized skills that you do not have in-house, you need to outsource those needs. For example, you might be taking a look at your social media marketing campaign, looking for ways to increase your online visibility.

You might not want to hire a specialized social media consultant full-time, but you can outsource your social media needs to a third party that specializes in that area. If you need specialized skills that you don’t currently have, company outsourcing could be beneficial.

When you need to improve efficiency and productivity

If you need to improve your efficiency and productivity, you need to outsource that area to a company that specializes in it. While you might think you can maximize your in-house teams' efficiency, you might not have the equipment or software to make it happen.

For example, you might want to outsource your email marketing to a third party that specializes in email automation. This could make a significant difference in your overall marketing conversion rates.

When you need to focus on core business functions

If you feel like your business is trying to do too many things, it might be time to consider outsourcing. You probably want to handle everything on your own, particularly if you built your business from the ground up; however, you cannot do everything at the same time.

You need to get back to what your business does best. What are the products and services that your customers care most about? Focus your energy on those core aspects, and outsource the ancillary tasks to a specialist who can help you.

When you need to scale your business quickly

If your business is growing rapidly, you need to scale up your operations to match the demands of your customers and clients. It takes a long time to hire new people and purchase new hardware, and you might not be able to do so in time to meet the demands of your customers.

Therefore, you need to outsource to a third party instead. With a single contract, you get access to an entire network of specialists and all the hardware necessary to scale your operations. This could help you keep pace with the growth of your business while putting your company in a position to be successful.

These are just a few of the many situations where it could be beneficial for you to outsource. How do you choose the right company to help you?

How to choose the right outsourcing company

There are plenty of companies out there who can help you outsource your business needs. How do you choose the right company to help you? Some of the most important factors include:

Assess expertise and experience

First, you need to take a look at your expertise and experience. How long has that company been in the field? Do they have the right certifications to help you? Have they dealt with issues similar to yours in the past?

For example, you might be looking for a company that can help you with a marketing audit. Have they performed these audits in the past? What types of companies have they worked with? Make sure they have the necessary training and experience to help you.

Evaluate reputation and references

Next, you need to take a look at what other companies have to say about that specific firm. You can start by visiting the website of that company to see if they have shared any reviews with the audience.

Do not forget to take a look at a few third-party sites as well. If you are serious about working with a specific company, see if they would be willing to provide you with a few references.

If other companies have good things to say about that firm, you may have found the right company to help you.

Conduct a cost-benefit analysis

Finally, before signing on the dotted line, conduct a thorough analysis of the costs and benefits. What types of services is the company going to handle for you? How much will the services cost? Will the price of the service change over time?

Then, take a look at how it will impact your productivity and your overhead expenses. You might be able to offload some hardware and software that you no longer need, and the outsourcing company could help you increase your productivity. Will it be enough to offset the cost of their services?

Clear communication is key

In the end, clear communication is key. That way, you can get the most out of your outsourced services.

If you are looking for tools and services that can help you maximize the efficiency of your business, take a closer look at the offerings from Mailchimp!

Take advantage of a creative assistant that can help you develop a strong marketing campaign that maximizes your conversion rate. Communicate with your outsourcing providers carefully to ensure you maximize the benefit of their services!

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