Do you want to be a more successful business owner or entrepreneur? Look for ways to multiply yourself and save your resources. One effective way to do this is by outsourcing tasks that require too much of your time and energy.
What Does it Mean to Outsource?
Outsourcing is one of those terms that we throw around frequently in the business world, but let’s make sure we’re all on the same page.
“Outsourcing is the business practice of hiring a party outside a company to perform services or create goods that were traditionally performed in-house by the company’s own employees and staff,” Investopedia explains. “Outsourcing is a practice usually undertaken by companies as a cost-cutting measure. As such, it can affect a wide range of jobs, ranging from customer support to manufacturing to the back office.”
Believe it or not, outsourcing is still a relatively new strategy. It was first recognized as a viable option in the United States in the late 1980s, and became a more common part of business economics in the 1990s. Today, it’s considered an extremely normal (and highly-encouraged) part of running a scalable business.
While outsourcing has long been used in industries like manufacturing, the rise of the gig economy means it’s now a practical solution for businesses of all kinds. For example, your landlord down the street might outsource property management to a property management company like Green Residential that handles things like finding tenants, collecting rent, and scheduling repairs. This frees them up to focus on other tasks, like finding their next property.
The Big Benefits of Outsourcing
Outsourcing is an extremely popular option in nearly every business vertical. But what are the big benefits and perks? Let’s explore a little deeper:
- Lower labor costs. Outsourcing is extremely cost-effective. While you’ll sometimes pay more on an hourly rate, you have to remember that you’re saving in other areas. There are no onboarding costs, healthcare expenses, benefits, payroll taxes, 401(k) contribution matches, etc. And, if you ever need to part ways, it’s a clean separation with no severance or other legal complications. Easy peasy!
- More time. Outsourcing is often used to address time-consuming, menial tasks that eat away at your schedule. By outsourcing, you free up your time to focus on bigger picture tasks.
- Access to expertise. With outsourcing, you can tap into people who are more skilled at certain tasks than you are. This allows you to instantly elevate the overall quality of your work without having to acquire the skill yourself or permanently hire for the position.
- Scalable growth. Growing a company is often challenging. You might take one step forward, but then it’s two steps back. This makes it incredibly difficult to know how many people to hire and where to commit your resources. With outsourcing, you don’t have to make long-term commitments. You can hire more people or downsize without any major ramifications.
There are obviously other benefits, but these are the ones that tend to have the biggest impact across the board for businesses and entrepreneurs.
3 Tips for More Successful Outsourcing
Whether you own a multi-million dollar business with dozens of employees, or you’re a real estate investor with a couple of properties in the neighborhood, outsourcing is something you can use to get ahead.
Here are a few tips to be proficient in this area:
1. Know the Difference Between Core and Non-Core Tasks
The entire key to outsourcing is knowing the difference between a core task and a non-core task.
Core tasks are those that directly contribute to your expertise and unique value proposition. These tasks often align with your core business functions and require your personal touch. On the other hand, non-core tasks are peripheral activities that, although essential, don’t directly impact your core offerings.
By outsourcing non-core tasks, you free up valuable time and mental resources to concentrate on strategic decisions, innovation, and other high-value activities. Outsourcing tasks like administrative work, customer support, data entry, and routine content creation can lead to increased productivity and efficiency.
2. Find the Right Outsourcing Partners
It’s easier than ever to find outsourced partners, including freelancers, subcontractors, and companies. But don’t confuse ease of finding partners with ease of finding quality partners. Just because there are thousands of options, doesn’t mean they’re all a great fit for your company.
In order to find the right partners, you need a few things:
- Know the criteria you’re looking for (including experience, education, past work history, technical skills, and soft skills)
- Know where to find the right partners (online platforms, referrals, etc.)
- Have a documented process for doing due diligence on partners before hiring them
3. Ensure Quality and Accountability
One of the big concerns with outsourcing tasks is that you won’t get the same quality that you would if you handled the tasks in-house. The key here is to establish mechanisms to ensure quality and accountability.
If you’re serious about getting the most out of your outsourced partners, set quality benchmarks and standards. Clearly define your expectations regarding the quality of work. Outline specific criteria and benchmarks that the outsourced tasks must meet. Whether it’s design aesthetics, code functionality, content coherence, or any other aspect, having well-defined quality standards serves as a guiding compass for the outsourcing partner.
You also need to request regular updates and samples (rather than just letting your outsourced partners ride). Periodic requests allow you to monitor the quality and direction of the project, enabling timely adjustments if needed. Frequent check-ins also provide an opportunity to provide feedback and steer the work toward alignment with your expectations.
Use Outsourcing to Get Ahead
Outsourcing is basically a shortcut. It allows you to multiply yourself, save time, and get more done with fewer resources. Yes, there are costs associated with outsourcing – and not every task is a viable candidate for offloading to someone outside of the four walls of your company – but it can be a launching pad to bigger and better things. Give it a try and see what results you get!