Outsourcing as a Small Business Owner

By on July 6, 2012

[box type=”info”] Jake Downs from cushingco.com, talks about the outsourcing strategies available to small business owners.[/box]

As a small business owner, you probably realized early on that you cannot effectively run your business while managing multiple responsibilities alone. It often takes the talents of others to do this well. Outsourcing as a small business owner is perhaps one of the better ways to rapidly grow a business from the start. By outsourcing certain tasks and services, a business can expand without increasing overhead, a tactic that many small business owners are using now to thrive.

Getting Started with Outsourcing: Tips for Success

Deciding to outsource some of your business needs starts with identifying the tasks that you do not like doing, or do not have the skills or credentials to handle alone. These could be routine activities such as administrative, recruiting, training, legal, information technology, accounting and payroll. In some cases, a whole division of your company’s services may be outsourced, such as product development, marketing/creative services, and sales management.

Outsourcing Advice for Choosing Vendors

Focus on what areas of the business need support in order to grow the company strategically, and seek out vendors or service providers who can meet these needs. These may be freelance individuals or other small businesses, so take the time to network with others in your industry who may have complimentary services to your company. It’s easy to find contractors to outsource to on business directories and freelancer websites, or get referrals from your colleagues. Look for those with flexible offerings who are also eager to grow and can adapt quickly to market conditions.

Partner with vendors on a trial basis and test out your relationship with a few key client projects. Make sure to establish vendor or subcontractor relationships with written contracts to define financial terms, client management, and responsibilities as well as an escape clause if things do not work out as expected. Some of your outsourcing resources may be occasional, such as for specialized projects, while others will be ongoing, so take your time and choose those that best fit your business needs.

Tools for Managing Outsourced Efforts

As you work with outsourcing, you may find it confusing to keep track of all your vendors and subcontractors, unless you have an outsourcing management system in place. This depends on the nature of the small business you operate, but it is recommended that you create a central tracking system. This can be as simple as an Excel spreadsheet to list out all subcontractors and vendors, along with contact information, terms, and contract details. Or you may decide to take advantage of a web-based project management system, where you can document all outsourcing activity alongside projects.

Choose an accounting system that allows you to track all expenses related to outsourcing, to get the most out this arrangement. Set up invoicing and payment terms that work best for your business budget, and pay competitive rates to contractors to get the best quality work possible. By outsourcing, you can easily expand into other high-dollar accounts with customers, without the added burden of providing benefits and management required in regular employment arrangements. For many, outsourcing is a win-win situation.

[box] When Jake Downs isn’t covering the best printing companies the world has to offer, he is busy offering small business advice to people worldwide.[/box]

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