Small Businesses – Could You Be Outsourcing Some Of Your Work?

Aug. 24, 2008 - PRLog -- One method that has been tried and tested throughout the last twenty years is the outsourcing of non-critical business functions to specialist professionals or companies.  

But if you are a small business, then how do you decide which work should be outsourced, or indeed whether you have any work to outsource at all?

Here, we will give an oversight of the three main areas of work that are great opportunities for outsourcing and reducing your costs, improving the quality of work and, in many cases, both!

Non-value add

There is a saying: “Only do what only you can do".   The essence of this saying, particularly in small business, is that your time should be devoted to carrying out activities where the fact that you are doing them makes a real difference.  If you are a charismatic deal-maker, then your strength lies in being out in the field, meeting with clients and selling your company's goods or services.  Time spent not doing this is a missed opportunity. However, it may be that after striking a deal you need to follow up with a letter and various documentation such as contracts.  Rather than yourself spending the time typing the letter, printing off the contracts and ensuring all is in place, the services of a virtual PA, or business support services company, could be carrying this out for you giving you more time to focus on what you specialise in – winning new business.  

In fact you probably already outsource elements of this non-value add work already – when you need to deliver a product sample or order to the customer, chances are you will use one of the national/international delivery companies to do so, rather than driving over to their premises yourself.  (And if you don't, why not?)

Specialists

Certain activities that are carried out within small businesses are done by people who do not have the full set of skills to be able to carry these out as efficiently as possible; for example an office manager preparing the end of year accounts, or an office administrator updating prices on the company website.  Although in many cases the cost per hour of hiring in the relevant professional to carry out these tasks is higher than the cost per hour of getting your own staff to carry them out, this can often be a false economy.  Take the updating of prices on your website: a skilled web professional would be able to carry these out much more swiftly and accurately meaning that any differential in hourly rate is compensated for by the reduction in time spent on the task.  There is also the chance that a mistake might be made by your administrator that would then need to be corrected at your cost – any mistakes made by the professional should be corrected free of charge.  

These are simply two examples of business activities that can be outsourced – you can probably think of many more if you sit down and consider what your staff are actually doing with their time.  

Variable workload

The final category of business activity that is suitable to being outsourced is that of activities where the workload can be variable.  The variation can depend on a number of factors, not limited to: seasonality, launch of new marketing campaigns, introduction of new competition in to your market, unusually high volumes of sales etc.  

There are few business people who can afford to wait for 'things to quieten down' when faced with these unusual peaks of activity.  However, there are few business people who can afford (literally) to maintain higher than necessary levels of staff so that they are prepared to cope with this surge – although you might be surprised to find out how many businesses do use this model.  

The efficient approach is to staff to your 'average' or 'normal' volumes with your full-time, contracted employees, and then to hire freelancers to act as a 'pressure release valve' where it is needed.  Although you may find that the cost per hour is higher than you would normally pay (although this may not actually be the case), in the long-term it will work out much more cost-effective than over-staffing (or simply failing to cope with the increased workload.)

Take for example a small doctor's surgery, where two secretaries are employed to type up the dictated letters of the doctors.  In a typical week, they have 50 hours of work between them, but two secretaries are employed because occasionally the workload can increase to 70 hours.  Using an outsourced model, this activity could be run much more efficiently by simply using one secretary and outsourcing the additional 15 hours typing needed in an average week to a secretarial services company.  This would reduce wage costs by more than a quarter, while still ensuring the capacity is available to cater for a busy week (the freelancers could pick up the extra typing.)  

Again, this is a specialised example, but as you know your own business better than anyone, have a long hard think about where you are spending money unnecessarily.  

In summary, you will have seen that there are a number of different opportunities for utilising outsourcing as a cost-reducer and quality enhancer within your business.  Think on each of the three area highlighted above in relation to your business in particular, and then you should start to see if outsourcing is relevant to you.

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If you need to outsource work in a way that allows you to compare bids of different values, while being able to see objective reviews of the quality of freelance providers written by other business people like you, then PeoplePerHour.com is the place for you. http://www.peopleperhour.com