Outsourcing is the movement of a workload to another source which can assist in that area for an agreed price either as a one-time service or as an ongoing complementing service. In doing so, the principal company can effectively save time, and get the staff to be more committed and speedier work results.
The essence of outsourcing is simply engaging the services of an individual or organization outside your full-time staff to handle certain aspects of your business plan. These aspects may be public relations, marketing, clerical and administrative functions, or IT management. In fact, with today’s virtual environment, there is no part of the business that cannot be outsourced effectively. Of course, the big question is whether there are any benefits to outsourcing, especially for persons who are building their business on the Internet.
There are several good reasons to outsource certain functions. Often, an Internet business is set up with a shoestring budget and one person doing all the work. As the business grows, it is easy to get caught up in dealing with general office functions, such as answering emails, handling correspondence and maintaining client lists.
By outsourcing your clerical support needs, you can spend more time focusing on the expansion of your business, not the day-to-day details of running it. Second, promoting your online presence is a full-time job all by itself. You can hardly manage that and still be involved in making the big decisions that impact the overall operations of your company. Using outside agents to promote your presence and stimulate sales makes it possible for you to do what owners need to do, which is to grow the company’s roster of goods and services.
Last, outsourcing allows you not to get bogged down with employee taxes, withholding and providing a benefit package. When you outsource to an agency or another individual, they will not expect a benefits package to go along with their pay.
You will save a great deal of time and money on accounting functions; these savings can be pumped right back into your business and used for expansion. Outsourcing is a great way to expand your online company without undue stress on your resources. Why not look at your present situation and see if you would benefit from outsourcing a function or two?
Outsourcing: Now or Later?
If you have a business, there are probably several day-to-day functions that could be outsourced to great advantage. Here are a few examples.
Outsourcing your sales efforts can be great for your business on several levels. First, by outsourcing to independent agents, you do not have to worry about salaries, benefits packages or taxes. Structure the agent program properly and you will not have to pay commissions until you receive payments from the customers your agents bring into the fold.
Everyone knows that the invoicing process can eat up a lot of resources. Outsource your invoicing to an independent firm that specializes in doing the billing for small businesses. Make sure they use a program that is compatible with the software you use to track your average revenue and average production reconciliation, so you can upload everything into your system when they close out a billing period. You can also get the service to handle the distribution of invoices to your customers.
For a modest fee, they will even handle emailing your invoices as PDF documents or print and mail them for you. You can use the electronic files you get at the end of the billing cycle to upload into your system and then post payments as you receive them.
Customer care is another important function that you can outsource. Make sure you get people who know your business and have a background in providing excellent customer service via phone and online methods. They use their computers at home, which means you do not have to maintain a large inventory of equipment in an office somewhere. All you do is point a toll-free number to them, set up access to a central customer service email box and you are good to go.
Keep in mind that when you outsource for just about any function within your company, you do not provide full-blown employee benefits. Your outsource provider is an independent contractor and as such will be responsible for handling their taxes, insurance and vacation time. You supply them with work and whatever compensation the two of you have agreed upon. All the money you would normally sink into benefits for full-time employees can be channelled into other aspects of your company, which ultimately will benefit everyone.
Full-Time Staff versus Outsourcing to Agents
Outsourcing various functions with your company can be a great thing, given certain circumstances. Here are a few examples of when outsourcing may be to your advantage, as well as some ideas of when you might be better off with full-time staff.
For businesses that have a national or international client base, outsourcing such functions as customer care and sales only makes sense. This allows you to engage the services of persons in several different locations that can speak to the needs of a growing clientele in various geographic locations without the need to open a branch office there.
If your business is more of a local nature and there is a chance that clients will drop by rather than phone or email, then you will present a much better image by having someone at a desk that your customers can relate to.
Public Relations is another area where there may or may not be a reason to outsource. Again, if your company has a focus on providing a local service, chances are you can devote some time to developing the materials associated with your local advertising campaign. But if you need a full media approach that would cover a larger geographic area than fifty or so miles, chances are you will be much better served by outsourcing to a public relations firm and letting them develop the strategy for you, then implementing it using their contacts.
Both full-time staff and remote agents may handle clerical tasks, such as taking orders, handling correspondence, and setting appointments very efficiently. The thing to consider again is the size of your business and if there is a chance that your customers will be coming into the office to drop off documents and arrange appointments. If this is not the case, then any small or large business can benefit from having someone perform those functions in a virtual environment. There is no office to rent, and no facility to keep up, which saves your company a great deal of money.
When it comes to being able to do the job, you can find qualified persons who are happy to work in a brick-and-mortar office or a virtual one. The trick is to determine which model is best for the way you run your business and how you want to interact with your client base.
Once you have answered those two questions, you will quickly see whether full-time employed staff or outsourced staff will be the best idea for your business model.
