I meet with business owners everyday, and I’m always amazed by their resilience, work ethic, creativity, and passion for their business.
Many owners I meet with are jack-of-all-trade types. They build and create their products, develop their marketing, execute on their vision, make the hires, control the finances, and are just plain busy.
Owning a small business is a challenge, and entrepreneurs usually wears many hats as they scale their business.
They wear their Executive hat, the bookkeeper hat, the salesperson hat, the CFO, the CEO, the Director of Operations, and, well, you get it.
One of the most critical decisions an owner will face is deciding when they should take off some of those hats and which ones.
Owners that do, usually scale their companies faster and avoid getting burnt out like their one-man or one-woman show counterparts.
It can be a difficult decision to know when to make a hire or if they should outsource that function to a team of experts.
Often, business owners will choose a hybrid of some internal hires coupled with a team of trusted outsourced partners to continue building their brand.
Today we are talking about what areas to consider outsourcing first.
Outsourcing is often an effective solution when you have a need, or skill gap, but it might not be a full time position just yet.
You might require a skillset or talent that is beyond what you would be able to recruit and compensate someone for and that’s what brings us to this outsourcing exercise.
Outsourcing is also a good solution when you can gain an edge over your competition like shipping your products faster than your competitor or when it will save you from high-risk areas of compliance like IT services.
To give you an idea, the top areas of Business most small business owners outsource are:
- Bookkeeping & Accounting Services
- Customer Service
- Shipping & Logistics
- Administrative Tasks
So, if you’re a multi-hat wearing owner, how do you know what to outsource first?
Follow this quick outsourcing exercise!
Step One: The Fun Part
1. What are your core service offerings or core competencies as a business?
2. List the top two-three revenue drivers for your business. Is it a service or product offering? Which ones?
3. List the top two-three product or service offerings that are most profitable to your business or have the potential to be if you invest more time in those areas.
4. List out these areas, and honestly reflect. Is most of your energy centered around your revenue drivers and/or your potential growth areas? Why or why not?
Step Two: The Chore List
1. What are the tasks that you spend the most time doing that are not related to these core competencies? (list 3-5).
2. What are the areas of the business that you are most concerned about? (Example: Finding qualified team members, maintaining quality control, process improvement, compliance)
3. What are the top three tasks you hate doing as an owner or feel the least qualified to do?
Step Three: Reflection
1. List out your answers from questions 1-3 on step two.
2. Are any of these tasks or functions listed ones that you would consider outsourcing? Why or why not? Would outsourcing these areas be more cost effective than making a hire?
3. Is there an area of the business you need to grow but cannot because you do not have the right expertise or cannot hire the right expertise?
Based on your answers to these questions, you probably have a good idea of the areas of your business you can look to outsource!
Now it’s time to weigh the pros and cons.
Some of the advantages to outsourced partners include:
– You can focus on what matters most to you (core competencies!)
– Work can be turned around faster
– Built-in Redundancy with an outside team (no interruptions in your service if their team member quits)
– No direct hire to recruit, onboard, manage, lead, or pay
– Team of experts rather than one person in a hiring role
– Cost effective solution (outsourcing is typically cheaper than a part- time hire)
– Provider will be used to working with growing & scaling companies
– Deeper bench of expertise in niched areas to help you grow
Some of the disadvantages include:
– Typically a remote solution, so you won’t have someone in your office
– You lose some control of the process as your outsourced partner may have a set way of doing things.
– Confidentiality could be at risk
– No internal hire or developed talent in house
– Quality of work might not be what you want
– Takes time to know & trust your partners
The most important thing to remember when outsourcing is that you are in control. When looking for a strategic partner don’t be afraid to ask questions! You are trusting these companies with your brand, so you want to make sure that they fit not only with the skillset you are looking for but culturally as well.
If you are looking for a payroll partner, we at Whirks are happy to answer any questions you may have about our services. As your payroll partner we are here to teach you and guide you through the rules and regulations to help keep you protected and confident.
Don’t let the demand of payroll and HR be a hat you wear any long, schedule an appointment with us today!