It is possible to reduce your business expenses by outsourcing certain tasks to third parties. Not only does this free up your time, enabling you to focus on activities more suited to your skills, but you can save a fair bit of money than if you staffed up to carry out intermittent work internally.
In the current economic situation, when every cent saved is valuable, no business can afford to spend money where it is not necessary. There are many jobs carried out within every business that requires specialized skills or training, but that are undertaken too rarely to justify employing staff to accomplish. In such situations it is generally more economical to have the work done by a third party than to hire part time or temporary staff, or even to try to do it yourself.
What is Outsourcing
Outsourcing is contracting a third party to carry our certain tasks for your business. The third party can be an individual, such as an accountant to look after your finances, or a business, such as using a hiring agency to recruit new employees. Many small business owners carry out a multitude of tasks, many of which they are not genuinely qualified to do.
You could spend a great deal of time learning how to maintain your sole company car, for example, and then carry out an amateurish job that would likely result in your vehicle running less efficiently that it would have had a professional carried out the work. Not only would it have been cheaper in the long run to have had a skilled mechanic do the work, but your time would have been better spent running your business than tinkering with your car - that's outsourcing!
Another option would have been to employ a mechanic to maintain your car. However, you would not only have had the mechanic's wages to pay, but also the overhead that goes along with employing staff members, and he or she would be spending most of their time doing nothing or carrying out menial tasks. It's therefore more economical to outsource certain tasks, particularly those required only occasionally.
What Tasks Can I Outsource?
Any task that is not a full-time job can be outsourced. Examples include building your website, electrical and mechanical maintenance work, bookkeeping and many other accounting and financial tasks. In fact, just about any task required in running your business can be outsourced other than your own.
What Are the Benefits of Outsourcing?
How long do you have? There are many benefits of outsourcing, and it could take all day to enumerate them. However, the major benefits are:
· Reduction in overheads
· Enables you to focus on your core function
· Use of specialist skills and knowledge
· Reduced training costs
· Reduced equipment or software costs
· High quality of work and services
· Use of best current technology and knowledge
· Use of experts in their chosen field
· Avoid seasonal fluctuations in staffing levels
· Increased efficiency
· Maintaining a competitive edge through use of best practices
The list could go on. Perhaps another major benefit is that by outsourcing you gain from the contracted firm's experience and knowledge gained through working with other businesses in your field. Although third-party contractors will generally maintain a high degree of security and client confidentiality, they will certainly apply experience gained from the companies they work for to their other customers.
If you are running a business, whether large or small, and you have certain work that must be done on an incidental basis, then outsourcing makes sense. For example, you may have seasonal variations in orders, when you could either employ temporary staff or outsource the extra work. It is far more economical to outsource in such situations, and even more economical to outsource temporary work involving specialist equipment.
One example is payroll processing, which can be very time-consuming for a small business. Larger businesses can justify dedicated payroll staff and software, but it is more economical for smaller businesses to pass the work to a third party. There is more specialist knowledge required in payroll management than most realize, with insurance, vacation, tax and legal issues involved.
Repetitive and time-consuming tasks can take your time away from your core business demands, and also involve investment in infrastructure used only occasionally in running your business. This investment would be better spent on your core activities rather than on those that can be outsourced and carried out more effectively and efficiently by a third party.
Outsourcing is part of any company's business planning, and by carrying this out judiciously you can significantly improve the profitability of your business.
B & M Financial Management Services, LLC, a full services accounting and financial services provider offers a variety of outsourcing solutions for startups and emerging businesses. To learn more about services offered, visit http://www.bmfms.com.