The 5 Key Advantages of Outsourcing for Small Business

Globalization has demanded businesses to gain a competitive edge over their competitors by cutting costs, enhancing efficiency, and ensuring great customer service. One way to go about this is by making full use of new technologies. But there’s a catch – the time is extremely limited and not enough to gain control of the technological wave.  

Although large enterprises can deal with the paucity of time at least for some time, it is particularly difficult for small businesses.  So how do you go about taking advantage of new technologies and enhancing efficiency and customer service while cutting costs, all in a limited amount of time?

The one-word answer to this is – outsourcing.  

In the past, outsourcing has made its mark as a trending buzzword and a cost-cutting tool that continues to attract businesses of all sizes. But it is far more than just this.

Till date most businesses have not truly been able to comprehend the full concept or the importance of outsourcing in business, nor have they explored the potential strategic advantages of outsourcing apart from monetary ones. This is despite the fact that the effect of introducing outsourcing into a business infrastructure can bring a wide range of business experience and insight to an organization in a very short time. 

This blog explores the advantages of outsourcing for a small business (apart from costs!) and emphasis on the positive effects of outsourcing.

1. Outsourcing lets you focus on what you do best 

Every hour holds a lot of value in the day and life of a small business owner, especially those just starting out with an extremely small staff, there are just not enough hours in the day. Outsourcing allows small business owners to just focus on their core product without any other distraction.

With outsourcing, you no longer have to worry about those time-consuming things that took your focus away from the real reason behind why you started your company in the first place. You can focus your time on making your products and services better, and how your company can continue to grow. While your outsourcing partner can focus on the non-core aspects.             

Not just that, companies that do everything themselves have much higher research & development, marketing and distribution expenses, all of which must be passed on the customers for the business to sustain. An outsourcing provider’s cost structure and economies of scale can give your business an important competitive advantage. 

2. Outsourcing gives you instant access to experts

Another positive of outsourcing is that you can capitalize on more specialized knowledge, from the outsourcing providers who are experts in their field, for a fraction of the cost of hiring an employee to perform the same task.

For example: If you are looking to build a new website for your small business, but otherwise have very limited IT needs. It wouldn’t not be very cost effective to hire a full-time or part-time employee for this task. Instead, outsourcing this task can maximize the amount spent on getting a professional that can develop a top-notch website without having to go through the hassle of hiring an employee. Moreover, these specialists will often have their own up-to-date equipment to fulfill the task, which cuts down another major expenditure from your budget.

3. Outsourcing gives you much greater flexibility

No two small businesses are the same, yet the one thing they do have in common is the need to be flexible because things can--and often will--change quickly.

Take a client of ours who runs beauty centers for example. Before working with us, they were stuck in the recruitment process of hiring professional and experienced developers. As a result, they were stretching their budgets significantly and also losing out on time.

That's when they gave Clarion a call. In a matter of hours, we could provide them with professional and experienced technology experts and the flexibility to scale up & down across technologies, something that would have taken weeks if not months if they'd hired in-house. Let alone the legalities behind laying off employees. 

A good outsourcing company will have the resources, the know-how and the flexibility to ramp up or down the resources to meet tight, ad-hoc project schedules.

Outsourcing is an ideal and a very cost-effective solution in such scenarios.  

4. Outsourcing reduces your risk and enhances control

Every business has to manage a certain amount of risk such as fluctuating market conditions, financial situation, government regulations, technological disruption and several others but choosing to outsource some business functions shares your risks as the service providers assume and manage these risks for their clients. These providers are generally more able to administer these risks in their zone of expertise. 

Organizations with smaller numbers of employees can be exposed to control risks as they have insufficient resources to divide duties. This can lead to the polarization of important corporate knowledge between one or two employees.

Outsourcing can be used to manage these risks through the development of suitable processes which segregate functions and provide additional management oversight within a larger team provided by the outsourcing company. 

5. Outsourcing makes sure that your project is being worked on around the clock 

One of the major benefits of outsourcing, especially global outsourcing is the substantial differences you might encounter in terms of time zones and holidays.  Although these differences may seem as hurdles logistically at first, once overcome it means that your project is being worked around the clock – in the morning by your team and by your outsourcing partner when you are fast asleep.

Each of these effects of outsourcing helps a small business grow, primarily because the small business owner can reinvest his/her time and energy into the business, rather than worrying about the aspects that they do not have specialization in.

Moreover, it is a quite a competitive world out there and those who are responsive undoubtedly have the edge over their competitors. Thus, outsourcing is a great way to dramatically improve your capability to be reactive and to free up the time and resources that you need to free up your capital and your resources.

Finally, we’d like to conclude with Alphonso Jackson’s quote that rightly sums up the basic philosophy of outsourcing “Where the work can be done outside better than it can be done inside, we should do it”

Small business owners, doesn’t that make so much sense?