Management & HR

Have you been considering outsourcing?

“Outsource”. Many entrepreneurs cringe at the very thought of the idea. Of course there are several realistic uncertainties that come with outsourcing. Most often at the top of that list is cost. When you’re a small business this is a major consideration. In many cases you’re barely making a profit at your current state so why would you add another cost for something you can do in house. There may not be any one simple answer but something to consider is how much value do you put on your own time?

When you’re spending a lot of energy pumping out orders representing money that has already been made, the value of your own labor goes down. Your time can be spent much more effectively either running your business or generating more leads. Simply put, outsourcing can make you or your staff more efficient at the things that make your business go.

When the day comes that you’re outsourcing labor, there are several things to consider.

  • Cost: Initial cost per unit or per hour to determine your profitability and value of the service.
  • Location: Whenever possible try to find a local vendor because in most cases you’re going to need to consider shipping cost which could affect your profit margin.
  • Turnaround: What’s your vendor’s normal turnaround time and is it within a reasonable timeframe to accommodate your needs. Are they capable of rush orders and if so what would be the cost? You can count on needing a rush job from time to time. Is all their work done in-house or are they outsourcing also?
  • Accountability: What are their written guarantees and policies regarding their quality of product or services? Can they give you up front pricing? Do they have or offer insurance for certain types of jobs?
  • Accessibility: Can they be reached during after hours or weekends if there’s an urgent concern?

Finally, before you  make your decision, see what kind of experiences some of their other customers have had with the company over the long run and who are they?

 

Outsourcing isn’t for everyone or for every situation but as you grow, it’s always worth considering.

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