One of the first things you need to learn as a small business owner is that you can’t do everything yourself. Not only will trying to do so ruin your personal life with stress, it will also make the business suffer. Many of us are familiar with the saying, “He’s a jack of all trades but a master of none,” and it’s one that couldn’t be more true than in the context of a small business owner.
Luckily, there are many different ways you can reduce your workload and stay focused on what’s really important to the business, one of the most prominent being outsourcing. Farming work to outside firms will make it easier for you to stay focused on the crucial tasks connected to the running of your business. And if you can succeed in choosing the right outsourcing partners, then this practice can also make your business more profitable.
Here are three ways outsourcing can turn into an improved bottom line.
Cut Down on Costs
Keeping overhead down is critical for any business, but it’s even more important for small businesses. You need every resource available to you to invest in the growth of your business, as not doing so could get you into trouble. And since poor cash flow management is consistently the top reason small businesses fail, it’s especially important you’re minimizing costs wherever you can.
Specialized firms are entirely dedicated to one task or one set of tasks, and businesses like yours are their customers. As such, they have both the skills and the motivation to offer the best price possible. Paying for someone to handle certain aspects of your business can be significantly cheaper than trying to do things on your own.
However, for this to work, it’s important you spend time determining which functions should and should not be outsourced. For example, don’t outsource things you do well just because it’s cheaper to do so. Instead, make up a list of things you struggle with, or of tasks that feel extraneous, and then look for help in these areas. Doing so will allow you to focus on your strengths while saving money on things that either you don’t do well or that distract you from growth.
Get More Bang for Your Buck
The other way that outsourcing helps boost profitability is that it allows you to get more out of the money you spend on the business. Let’s think up an example: your company is beginning to employ digital marketing tactics—a smart move considering the world we live in—and while you’re current marketing team is exception at building a brand and at generating leads through traditional mediums, they don’t have a lot of experience in the digital space.
In this scenario, you have two choices: A) train your staff and allow them the space to learn about this new, constantly-changing field, or B) bring in some digital marketing specialists to help you. The better choice for a small business is almost always option B. This is because by asking your current marketing team to switch their focus, you’re going to take them away from what they do best so that they can work on something with which they’re unfamiliar.
As a result, you’ll get more bang for your buck if you outsource. Not only would outsourcing your digital marketing in this context save you money, but by delegating to experts, you’re increasing your chances of success, meaning your foray into digital marketing will end up giving your company’s bottom line a big boost.
Enhance Employee Productivity
The more you can get out of your employees, the better you can expect your bottom line to be. Yet the people who work for you are still human beings. They have limits, and if you try to push them too far, then they’ll not only begin to resent you for all the stress you cause them, but their work will also begin to suffer.
Outsourcing can help you with this. It can take certain tasks off your employees’ plates so that they can focus on their job functions that actively contribute to company growth. For example, you could outsource a number of human resources functions to a professional employer organization (PEO) so that some of the more time-consuming and mundane aspects of their jobs, such as processing benefits, managing payroll and ensuring all compliance paperwork is filled out, is done for them.
Once they’re freed from having to spend large chunks of their days worrying about these responsibilities, your HR team can focus on other things, such as improving your candidate experience and enhancing your employer brand, both of which will help you recruit more effectively and increase profits.
Find the Right Outsourcing Options for Your Company
Smart outsourcing decisions can have a radical effect on your company. It will save you time and money, and it will allow everyone at the company, including you, to focus on what’s most important for the company to grow. However, remember that not all outsourcing options are created equal and that you’ll need to do a thorough cost-benefit analysis before deciding to work with someone. But if you do your due diligence and choose the right people to help you, then outsourcing can be a way to truly transform your business.
About the Author: Jock is the founder of Digital Exits, an online brokerage service. He started his first business when he was just 19, and since then has bought, run and sold several others, all of which operated in the digital space. Outsourcing has been a core strategy from the beginning, which makes Jock a big advocate of using this practice wisely.