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Thinking About Outsourcing? Consider Whether It Is An Expense Or Means Of Growing Your Business

November 30, 2020

One of the main objectives of any business, and particularly start-ups, is growth. Generally, with growth comes increased business activities and operations. These lead to you requiring additional staff to complete the additional or new workload. 

Hiring more staff or training your existing team to cover new operations is one way to help you achieve growth. Another way is to outsource some of your activities ( for example, hire a VA to answer calls ). However, outsourcing needs to be paid for, so should you consider outsourcing as an expense or a means of growing your business? This brief article aims to help you answer this question.

The Argument For Outsourcing As A Growing Tool For Your Business

If you have activities needed to be done for your business, but you don’t have the skills in-house to do them, then outsourcing is a good solution. Here are a few other benefits of outsourcing:

  • Cost-Effective. You can access skilled professionals at a fraction of the cost of hiring locally.
  • Save on Capital Spend. If you need to buy machinery or plant, outsourcing is an alternative that can save you from considerable capital spend.
  • Increased Flexibility. Outsourcing allows you to turn on and off resources as required, rather than have periods when they are not used.
  • Increased Productivity. Concentrating on the things you are good at and outsourcing other activities can increase productivity in these areas.
  • Skilled Professionals. Outsourcing means you can access some of the most skilled and experienced professionals in a particular field, rather than having to upskill your staff.
  • Create New Partnerships. Outsourcing creates new partnerships, and opportunities will emerge from such partnerships.
  • Increased Innovation. Conducting activities that you usually cannot do in-house will lead to ideas for new products and services.

The Argument For Outsourcing Being An Expense

Of course, some argue that outsourcing is an expense to the business, and there are several good reasons why you may consider outsourcing not to be the right thing for yours:

  • Quality Control. If you outsource staff rather than have in-house employees, it is much more challenging to control their work quality.
  • Reduced Flexibility. Making business or operational changes means that you have to communicate these to your outsourced staff. This requirement can prove time-consuming and may involve training individual outsourced staff in different locations rather than centrally.
  • Lack of Commitment. Your outsourced employees are unlikely to have the same level of loyalty and commitment your in-house staff has. You might find that they move on quickly or not wish to return after periods of inactivity. This situation will cost you in terms of finding replacements. 
  • Diminishing Returns. As wage increases occur in outsourced markets, the return on your outsourcing will become diminished, leading to a need for further outsourcing.

Conclusion

There are plenty of reasons why you might want to consider outsourcing for your business and several why you may not. Hopefully, this brief article will help you make an informed decision on whether outsourcing is an expense to your business or helps your business grow.

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