Print   RSS

How Small Businesses Can Benefit From Outsourcing

Monique Craig

August 13, 2014

It has been long thought that outsourcing is reserved for big corporations, which use it as a means to cut costs. However, also small businesses can benefit from transferring some of the duties to outside companies and service providers. Here are some of the main advantages an entrepreneur can achieve thanks to outsourcing.

Firstly, it is worth noticing that many small business owners do outsource without even being aware of it. Most often it involves hiring another company to manage the invoices, do the accounting and deal with taxes. Avoiding the necessity to do it on their own, entrepreneurs are able to focus on what they know best – business. Nevertheless, this is not where outsourcing opportunities end. In the modern digital era, it is possible to transfer nearly every aspect of conducting a business outside the core company.

One of the most important benefits of doing so is efficiency. It is obvious that every cost borne by the company will eventually be incorporated in the final price of its product. That means that it is in every customer's interest that the operating costs are low. This can be achieved by using the cost structure, staff and resources of a third-party.  

Another advantage is effective employment management. Every employee working for the core company needs training and supervision. Moreover, with the bulk of governmental regulations and the power of trade unions, it is natural to look for alternatives.  When outsourcing, these problems disappear. The traditional relationship between an employer and an employee is replaced by a modern business-to-business model.

Outsourcing also enables small business owners to gain access to high quality products and highly skilled experts for a bargain price. Hiring a financial or research specialist with vast experience full-time could ruin the budget of a small company. However, by reaching out to outside companies and paying only for the tasks that need to be done gives a lot of advantage on the market. Signing job-to-job contracts with the best service providers can allow a company to compete with the major players.

Being a business person involves a lot of risk and the risk management requires skills. By outsourcing some of the company's duties, we automatically outsource the risk management, which then becomes the vendor's matter. The only time when an entrepreneur has to make a risky decision is when choosing the right contractor. However, in the digital age it is easy to find valuable information and reviews about people and companies, and ensure finding a reputable partner.

Competitiveness in business means being involved in many projects at the same time. With limited manpower in company, this can cause problems. This is where outsourcing helps by reducing the workload of core company employees and allows engagement into a whole array of different, often very specialized, working fields. Such diversification can make previously unavailable options open.

Finally, with the growing amount of rules, regulations, tariffs and taxes – it is much more affordable to outsource heavily regulated duties to a foreign business. There are many companies in entrepreneur-friendly countries, which can provide the same service without bearing additional costs and having to comply with legal obstacles existing in the home country.

Even though outsourcing provides a lot of opportunities, every business owner should remember it is not a risk-free strategy. There are many aspects which need to be considered when choosing business partners. A good entrepreneur always follows the trends and explores opportunities which arise with the constant development of the outsourcing business sector. Even though there are much more advantages than disadvantages, sensibility is always advised.

 Feedback   Submit Article