Posted by admin
August 3, 2020 | 6-minute read (1026 words)
The COVID-19 pandemic has taught businesses a lot of lessons, some good and some that haven’t been welcome. But one universal truth that’s permeated the industry has been that entrepreneurs are reviewing their business’ core operational processes, from spending to remote working arrangements. Inherent in these lessons is the realization that business owners must maintain a sharper-than-ever focus on lean operations, which means that for many companies, it’s the right time to outsource.
Perhaps your team is spread too thin, or maybe you need to deploy your entire staff to handle revenue-generating responsibilities like sales, R&D, account management and other activities. Or perhaps you’ve got some "to-do" items on the back burner and you aren’t sure when you’ll be able to bring them to the “finalized” list.
No matter which category you fall into, it’s clear that the coronavirus pandemic gives every entrepreneur an opportunity to review their operational processes and to streamline them to get the most return for the smallest investment of time and money. While your company focuses on core revenue-building responsibilities, an outsourcing business can take care of the tasks that keep your business running smoothly. Consider these five reasons why this might be the right time to consider outsourcing.
1. You’ll Cut Costs
About 45 percent of small businesses aren’t happy with their current cash flow, according to a July 2020 survey by the US Chamber of Commerce. This statistic is alarming enough, but even more so when you realize that it’s three times higher than the pre-pandemic percentage of entrepreneurs who felt that way. Although many small business assistance programs are available, some companies feel the protections aren’t strong enough for businesses to continue thriving.
Outsourcing some of the most costly functions that your business has in place could save you a significant amount of money. For example, financial managers earn an average salary of $147,530 a year, according to the government’s Bureau of Labor Statistics. For accountants, that number is $71,550 annually, and for HR managers it’s $116,720 a year.
On top of those salaries, think about the benefits you pay, as well as the office space you must maintain and the technology you have to buy so these staff members have all the tools necessary to do their jobs. Because these staff salaries can add up, outsourcing is significantly less expensive for most companies.
You can outsource such functions as HR, payroll, accounting, finance, tech services and recruiting, among others. You only have to pay for the services you actually use, so if you don’t require an accountant for more than a few hours a week, that’s all you have to pay for through the outsourcing firm.
2. You’ll Have Time to Scale
Think about how many hours a day you spend handling staff-related issues. Maybe you have a daily standing meeting with your accounting team, or perhaps you set aside every Tuesday to handle HR responsibilities, check in on any changing labor laws and regulations, and interview new potential employees. By outsourcing, you can leave these tasks to the third-party firm so you’ll have more time to focus on your priorities, which typically involve cultivating new sales opportunities, building great products and growing your business.
If you’re handling all of the business responsibilities yourself rather than delegating them to an in-house team, you may not realize how much time you’re spending on those tasks. Most entrepreneurs have more pressing things to do besides hanging on the phone to resolve things like sales tax discrepancies. By outsourcing that responsibility, the business owner knows it’s being handled appropriately while spending their time on sales, marketing, R&D, product development and every other core task that contributes to the business’ growth.
3. You'll Have Experts on Your Side
Every entrepreneur is an expert in something, and maybe even in a few different areas. But most business owners can’t say they have expert-level skills in everything from international tax compliance to HR regulations. That’s where outsourced companies can be of great assistance. They find the experts in these areas who can help guide you to the right decisions in their areas of expertise. They can do this quickly and correctly because their staff members each maintain focus in just one area. Whereas an issue with an employee benefits detail might take you all day to rectify, the outsourced company could handle it within minutes because they know the vertical inside and out.
4. They’ll Grow With You
Although right now it seems like COVID-19 has lasted a lifetime, the reality is that the pandemic will eventually end, and your business will be back on track to fulfilling its goals again. When that happens, your needs in the areas of accounting, tax compliance, HR, staffing, accounts payable and finance will likely grow as well. The outsourced company will be able to provide additional hours or even more people to meet your growing business’ needs, with no lag time. If you require three hours’ worth of HR help on Friday but you realize you’ll need ten hours’ worth by Monday, that can happen in just one phone call, rather than negotiating with staff members and putting out recruiting ads.
5. You’ll Have Service Continuity
Never again will you have to worry about finding people to fill in if your HR director goes on medical leave or if you get sick and can’t handle payroll. Having an outsourced company in place will ensure continuity of service no matter what happens at your company, and you’ll be able to maintain that whether you’re on vacation, out sick or handling other needs.
This is also helpful if your business needs fewer hours. During situations like the coronavirus pandemic, when some businesses have had to scale back operations significantly, the outsourced company can take on fewer tasks and then quickly scale back up when business bounces back. You and your customers won’t notice any difference because the outsourced firm has provided continuous, high-level service throughout the period.