When you start up a small business, most people do everything themselves at first just because they have to. It’s cheaper, it’s quicker (and half the time there isn’t enough work yet to justify bringing anyone else in!) As things pick up, though, that setup can start causing problems. You might end up staying later just to keep on top of everything and when you’re burning the candle at both ends from the start, it’s not exactly ideal for your health and stress levels. Eventually, the question will probably come up about outsourcing versus keeping things in house, but it isn’t always obvious which way to go. If you’re a small business owner in this position, here are some things to consider.
Photo by Tim Mossholder:
Work out what tasks you want to do
Some jobs are a bit easier to hand over early, but others will cause problems if you do. That’s because certain jobs are sometimes better to do yourself first just to be able to understand them properly before handing them over to another company. Tasks that have got a clear process tend to transfer over more smoothly, so if you’re not at that stage yet then another company might struggle to understand exactly what you want. Some tasks don’t feel like they’d be that big when you first start out and you might not have considered outsourcing them at all, but then end up taking more time than you expect every week. And once you get to that stage, keeping it in house can actually cost you more time than it saves. But taking the time first to work out what the different tasks are, what you can realistically do (and what you want to do vs what you don’t) can be better than handing things over right away. If you hand something over that you’re not ready to do then you might then end up going back and forth fixing bits as they weren’t done the way you wanted. Or you might outsource something for a while, but then end up bringing it back in house when it stops working the way you want. You might set things up one way to begin with, then change it later once it stops working as well as it did. Something that’s manageable when you’re only putting a few hours in can start causing you issues once the workload increases. If something isn’t working anymore you’ll probably notice it coming up as a repeat issue. You might notice that certain jobs keep getting pushed back or left until last because there’s never the time for them. You can get to a point where something has to change if you’re finding that keeping it the same just isn’t working anymore.
Is the cost worth it?
As a small business owner you might be trying to do everything yourself because you think it’s cheaper but outsourcing isn’t just for bigger companies. While there are costs involved when you’re paying another company, it can be worth it to improve your profits. You’re only paying for the work when you actually need it and you’re not committing to extra tools or subscriptions for one task, and you’re not covering the downtime of paying your own staff when there isn’t much going on either. This is especially true of specialist work, where the cost of hiring someone permanently would be hard to justify, but paying for it occasionally makes sense. There’s flexibility when it comes to outsourcing too. You might be dealing with marketing yourself at first but then move over to using a company because you need the skills of other people to be able to expand. That way you’re not committing to anything straight away, and you get a better idea of what the job actually involves before making it permanent. It can work the other way round as well. Some work needs to stay with you at the start, then later on you might feel more comfortable handing it over once you know how you want it done. This is especially true of marketing and content, where it makes more sense once you’ve spent some time working out what you actually need first. When it comes to things like fulfilment it’s usually worth smaller businesses working with a third party company who already have the warehouse space and vehicles and staff needed be able to ship orders out properly. Later on if you grow, you have the choice of having a warehouse built yourself. You’ll need to decide between Hybrid Steel Buildings vs PEMBs and deal with planning permission and things like that which you might not want to do in the early stages of getting a business established.
Risk
As a business owner, you’re always trying to weigh up risk. It can be difficult deciding which way to go with outsourcing vs keeping things in house, if you get it wrong you’ll cost yourself time and money. Outsourcing can reduce the risk of you missing deadlines or not doing things to a high standard as the company you use will be professionals in that area so you have peace of mind that it will be done well. But at the same time, you do then lose some control in that area and if something does go wrong with them then there’s not much you can do about it.
Some tasks sound simple to outsource but if they involve having to make constant decisions and feed that back to the company you’re using, making changes yourself or making judgement calls that they cant/ wont make then this end up creating more work instead of less. You might find yourself answering questions, checking work or correcting things so often that you’re still heavily involved anyway so you might as well do it yourself. On the other hand, jobs that sounds like they’d be easy to do yourself can take an age to get through and use more of your time and mental energy than you’d want. These things make sense to outsource (as well as technical things that you’re unable to do, or tasks that need lots of experience or staff). There’s not a simple answer as what each business needs to outsource will depend on what you do, but it is something to consider as a growing small business.
