Small Business Tips
Have you ever considered outsourcing for your small business? You might think it’s only an option for large corporations with million-pound budgets. But the truth is that small businesses can benefit too.
Thanks to the ‘as-a-service’ model, outsourcing has never been easier or more affordable. Even if you’re a one-person operation working from your hall cupboard. Unsurprisingly, more and more businesses of all shapes and sizes are doing it.Here’s a look at some of the benefits of outsourcing and a rundown of the tasks you might want to consider handing off to someone else.
What are the benefits of outsourcing?
Outsourcing has five major benefits:
- It lowers the amount of risk exposure to your business
- It saves you money
- Getting new projects off the ground is easier and quicker
- It helps you run your business more efficiently
- It puts you on an equal footing with bigger players
Let’s discuss these benefits in more detail.
Small business outsourcing as risk management
When you outsource a task, you’re handing it off to someone with specialist knowledge and experience. They do this for a living. And they’re probably better qualified to handle it than you are. So, they’re less likely to make mistakes that could get you into trouble.
Tax is a case in point. HMRC’s rules can be complex and open to interpretation. And, if you don’t get it exactly right, you could get hit with heavy fines. Outsourcing your small business finances to a good accountant lowers the chances of this happening.
Small business outsourcing to save money
Outsourcing can work out much cheaper than doing things in-house, for two reasons. First, it can turn fixed long-term costs into variable ones. Second, it can eliminate upfront and maintenance costs.Let’s say you’re in the electronics repair business. Most of the time, you can manage the workload by yourself. However, there are certain months when you have more work than you can handle.
You could hire an employee to pick up the slack. But then you’d have to pay them a fixed salary each month. Plus, you’d have to pay employers’ National Insurance, make pension contributions and buy employers’ liability insurance. And you wouldn’t be able to fire them unless you had legal grounds to do so.
By contrast, if you outsource the extra workload to an independent contractor, you pay for help only when you need it. And they’re responsible for paying their own taxes, National Insurance contributions, pension contributions and other costs.The savings can be even greater when you outsource specialised functions. For instance, you can buy 1 terabyte of cloud storage on Google Drive for £7.99 a month. That’s a fraction of what it would cost to set up and maintain your own private cloud storage facility.
The easy way of launching new projects
Thinking of branching out? Or expanding your operations? If you decide to go it alone, there’s a lot you’ll have to do.You’d need to spend time researching and planning. You’d need to get training (or train your staff). And you may need to invest in new equipment. This could all take several months or even more.Not so if you outsource the project. If you choose wisely, the firm will have the necessary know-how and infrastructure already in place. Which means you can hit the ground running and launch the project sooner.
Outsourcing to improve efficiency
As a small business owner, you wear many hats. On one hand, you have to deliver your product or service. But you also have to find new clients, handle paperwork, do your books, troubleshoot your laptop if it’s on the blink and all sorts of other tasks.This means it can often feel like you’re spread too thin. What’s more, some tasks will take a while to do properly, either because you don’t have the expertise or — let’s face it — because you plain don’t enjoy doing them (who likes going through a year’s worth of bank statements line by line, right?).
Outsourcing some of your workload frees you up so you can focus on what’s important to you. And, because the people you outsource to are specialists, they can probably do the task better and complete it in less time.
Levelling the playing field
Outsourcing allows you to offer your customers the same level of service as the big players, without breaking the bank. This means larger companies no longer have the advantage because of their size.Let’s say you sell jewellery online. Your larger competitors all offer same-day delivery and round-the-clock customer support.As a small business, it would be impossible for you to offer the same level of service in-house. For starters, you’d need to spend thousands of pounds on new hires, office space, equipment and other overheads. But even if money were no object, your profits likely aren’t large enough to justify the investment.
Well, services such as Amazon’s fulfilment program allow you to offer your customers this level of service, without having to take on the financial burden. You pay a flat fee per package plus a storage charge, and you're right there neck and neck with the Goliaths of your industry.
