December 8, 2018
Outsourcing – the practice of hiring third parties outside of your business to do some of the tasks that are required for you – is expensive. It’s a waste of time. You can do it all, and if you can’t, you can learn. Or you can delegate to staff members who can also learn what to do. Isn’t that the case? Won’t you be saving money by doing this?
The answer is not necessarily. If you outsource the right tasks to the right people, you can actually save your business money. Read on to find out how this seemingly impossible statement could be true for you.
Hiring People Costs Money
When you first start your business, you might assume that, at some point further down the line, you will need to hire people. It seems like a natural progression from being a sole trader to running a company that has a variety of staff members. Hiring people, however, can be an extremely expensive thing to do. You need to pay for:
- Advertising the position
- The time it takes to read resumes and interview people
- Fees to recruitment agencies
- And eventually salaries and the tax implications that go with this
You are also responsible for other people’s financial well-being because you need to make sure they are paid each month without fail. If the business has a difficult patch or is seasonal, this can be difficult.
When you outsource, you only need to pay for the time you use, which means that you can put the work on hold, or even do it yourself (assuming you have the skills) if money is tight. You can’t do that with someone’s salary.
Training Takes Time (And Money)
Training up your staff so that you can delegate tasks to them might sound like a good idea, and in some cases, it will be if that member of staff can then use those skills to improve the business. If the task they are being asked to do is a one-off or rare thing, the time taken to train them up will far outweigh the value of the task itself – it will be less expensive to outsource these specialist tasks, which could include PCB making using CircuitStudio, gathering market information, creating a logo, or even adding signage to your storefront.
You Won’t Lose Focus
When you have a thousand different tasks to do, you can easily become overwhelmed and lose focus. This, sadly, costs your business money because you end up getting nothing done at all, or you start to cut corners in order to complete jobs and move onto the next. This can easily ruin your company’s reputation and have a major negative impact on sales.
Although delegation is hard, as businesswomen Jessica Jackley says, “Deciding what not to do is as important as deciding what to do.” That is, knowing what you should be outsourcing so that you can focus more on the tasks you are able to do well is crucial – do this, and you will grow your business, even if you are paying an outside company for their particular skills.