Outsourcing in Texas | TX Business Support

Outsourcing for Small Businesses: Pros and Cons

In our last article we highlighted the constant and never ending activities you are bombarded with on a daily basis in your small business. Now we are going to dive deeper into the Pros and Cons of outsourcing in Texas as a way to relieve added stress. Stay tuned or follow us on Facebook as we dive deeper into crucial functions you should consider outsourcing.

We hear a lot of businesses talking about outsourcing these days. But, what exactly is outsourcing?

Outsourcing is a common business practice where a party outside a company is hired to create goods or perform services that were traditionally performed in-house by the company’s own staff and employees.

Many people might hear this definition and automatically assume this means transferring all your business overseas and disregard the concept all together. Although this is one option, it is not the only one. I believe when you are first starting out you must invest in good relationships because they are truly able to get to know you and the underlying reason why you started this business. So for the rest of this article we are going to only talk about outsourcing functions in your local market.

Pros of Outsourcing in Texas

Access to Specialists:

You don’t know what you don’t know, right? This is why it is so important to find people who really know what they are doing and have the experience to back it up. High-end specialists know what the current market trends are, how to employ the latest technology and how to implement new strategies. Many outsourced consultants and companies spend all their time learning and gathering important information about their industry. They are up to date on new laws and regulations and new technology. Outsourcing specific tasks to specialists will bring in the wisdom and experience they have to your business and take it down new avenues of success.

Low Cost:

Ok so now you are convinced that you need a specialist, but you know that you could never afford it. Well, a big advantages of outsourcing is getting to hire that experienced and specialized professional at a lower cost. Also remember that contracted outsourced employees are not required to have paid holidays or other employee benefits which is an additional advantage when you are first starting out. Most of the time you can find this service is much less than what you would’ve paid to a full-time lower entry employee.

Time:

Small business owners often find themselves juggling multiple tasks on a tight schedule. This is where outsourcing becomes crucial. When you outsource a few tasks, it will give you more time to create business strategies and focus on the core services. Good business leaders need to delegate, and outsourcing is one way to do that. Most of the time you will make more money by focusing on the skills you are good at and leave the rest to other professionals.

Cons of Outsourcing

Lack of Quality:

Never choose cost over quality. When you are hiring a specialist it is hard to control or monitor them because after all you are paying them for their experience and knowledge, right? If they cannot deliver the services or does not perform them correctly your time and money will be wasted. What’s worse, your company may suffer in other ways. Therefore, it is important to hire the right people or company with experience and have a clear understanding of both parties’ expectations. I would recommend that you hire an established company that has a proven track record. Make sure and ask questions and follow up with them as well.

Low Control:

If you are a micromanager, you might have to struggle with handing over some of your operations to an outsider. If you outsource too many departments, you also risk losing control of the vital processes of your company — and of the people you contracted. You won’t be able to supervise tasks and changes may become difficult to implement. You are still responsible for the output with your outsourced company. So, make sure that you routinely have meetings to discuss upcoming issues and get reports and feedback on what they are working on. If this is hard for you then just take it slow and focus on what function at a time.

Time Commitment:

You need to give time to the outsourcing professionals to make them understand your business goals. There is a time commitment to get your outsourced company up and running. The more you put into the relationship, the morethey will understand your company and your “why”, your values and your goals. The worst thing you can do is to just assume that they understand your company and have everything you need. It is essential to build a good relationship. Like a good investment, you will be rewarded overtime if you prioritize this in the beginning.

Overview

While outsourcing is not without risks, the right provider can make sure you get all the benefits without the cons. You are not just hiring a helper; you are getting an expert who can help you take your business to new heights.

Types of Activities You Can Outsource

If you are a growing business, some of the departments you should consider outsourcing are:

We will be diving deeper into each category in this series so stay tuned or follow us on Facebook or LinkedIn.

Accounting/Bookkeeping:

Many small businesses simply contract a professional to keep their financial transactions in an orderly way. From data entry, paying bills or helping collect on receivables, reporting taxes. This is very time consuming and can be very technical for some industries. Outsourcing is cheaper than hiring an in-house accountant.

Payroll Processing/ HR:

HR is very regulation heavy, and it can prove very costly to do this wrong. Once your staff starts expanding, it would be cheaper to outsource a professional to keep track of all the functions of HR than hiring a full-time HR team to do the job.

IT Operations:

With internet security, ID theft and ransom risks becoming important areas of concern, are you sure your company’s information is secure? These are some issues that companies need to look at, and an IT consultant can help with this. In addition to this, outsourcing your IT services to external cloud solutions, small businesses can have costs saving up to 40%.

Legal Services:

According to Smart Company, 75% of SMEs outsource legal services, including recruitments, firings, contractual and copyright agreements. This not only helps them in cost-saving but also bring them in connection with industry experts.

Payments Manager:

Outsourced payment managers can identify market trends, research consumer behavior and analyze card payment portfolios for small merchant businesses who are not equipped to do so on their own.

Marketing:

Outsourcing your marketing activities like advertising, social media marketing, public relations, promotions, distribution and pricing can help you focus on your core competencies and improve sales.

Outsourcing in Texas

 

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