New startups hit the market every day. In the US alone there are around 28 million small businesses today, with even more sole traders and partnerships. It’s often said that small businesses are the backbone of America, and despite the domination of global brands like Amazon and Google, it’s more accurate than ever.
The idea of running a small business is one that appeals to many. People see it as a way to do things their own way, making money for themselves, learning from the mistakes that others make and building something for themselves, without having to work for a boss. It can be a way to work flexibly and to offer others employment opportunities.
An Early Problem
In the early days, many small businesses manage with a small team. They delegate tasks between themselves and manage the best that they can while business is picking up. Then as the business grows, things get tricky. Hiring more staff isn’t always an option, but they don’t have the expertise or manpower to keep up. That’s when outsourcing work to other companies or professionals becomes tempting. Outsourcing can be an ideal solution, but, like everything else, it has pros and cons. Let’s take a look at some of them.
Perhaps the first benefit of outsourcing is financial. Hiring permanent staff is expensive. Recruitment and training cost money and paying someone an hourly rate or salary can be costly. While you’re busy and earning well, this isn’t a problem. But, most small businesses, certainly in the early days, experience ups and downs. You can afford to pay them today, but what if in two months your income slows? Outsourcing work gives you the option to take on extra staff only when you need and can afford them. Long-term it can be a much cheaper solution.
Another is experience. As a new business, there might be areas where your expertise are limited, or you might find that you can only afford to hire entry-level staff that don’t always have the skills that a task needs. IT issues, for example, need an expert. Visit Vertex to see how their teams help law firms to manage their IT services. Outsourcing gives you access to experts as and when you need them.
Outsourcing more menial tasks like answering your phones and taking on admin can also be a good idea as it frees up your time to concentrate on more important things. Other benefits include low labor costs, access to a larger pool of talent and being able to be online 24/7 if you outsource to different time zones.
Outsourcing can mean that you have a lack of control over the work being done. You provide instructions and stay in contact, but you are handing some of the control of the work to the person doing it, who isn’t in your employ. This and a lack of communication in some situations can lead to problems with quality and consistency in your business.
Another issue with outsourcing work is the effect that it could have on your team. As a small business a positive work culture, with great staff morale and excellent team spirit is essential to productivity. If there are always outsiders coming in or work going out, it can be harder to build, and some of your staff might start to feel like you are replacing them.