A lot of startup companies sprout left and right, but most of them don’t move forward, some even fail completely. Some may have created a product that people didn’t want, had uncertain business objectives, or just jumped the gun too soon. One of the top reasons a startup fails, is because of poor management, along with a lack of expertise in certain areas.
In a typical startup, sole business owners and team members will try to do everything because of limited budgets and resources. However, even the most promising of startups can’t do everything on their own and it can spell disaster if they try.
Why Startups Should Outsource
Most startups are made up of a small team with only key employees, for some it may just be the business owner and founders. Startups tend to be more cautious about expenses and costs, so they avoid hiring too many new people and try to do everything themselves. This often leads to the workload becoming unmanageable. This makes lead times longer, and the quality of work suffering. There is more chance of errors just because there are major business functions that are out of their expertise.
When the processes become strained, or things start to get delayed, it’s time to start using outsourcing as a tool. If you don’t then the quality of your work, products, and services will only continue to decline. This could lead to you losing clients and customers. And even worse, it will most definitely contribute to the destruction of your brand reputation.
On top of this, startups have a limited amount of disposable cash. So, avoiding big expenses and lowering overall operational costs can help to stretch their startup capital and give the business more time to become established and grow.
Main Costs When Starting A Business
A healthy amount of money is needed to start a business and begin operation. Whether you’re using technology, providing a service, selling physical goods, or even downloadable software, your startup is likely to need money for office space, an IT infrastructure, and employees as a bare minimum.
You also need ot think about technology and hardware needs to be able to create your product and just run the business on a daily basis. You also need to factor in the money that you will need to allocate to overhead and administration costs, as well as employee benefits and professional fees.
If your plan is to do everything in-house, you will also have to have the funds to the recruitment of the ideal team, as well as consider the time it takes to fill an empty seat.
The Benefits Of Outsourcing For Startups
Startup companies who invest in business outsourcing can gain advantages that help their businesses expand. A lot of businesses are now warming to the idea of utilising outsourcing fro areas such as administration and the creative processes.
When you expect an employee to complete a task that is outside of their skill set, you are setting yourself up for poor quality. However, if you use outsourcing you have access to professionals and experts in a specific area.
In the long-run, outsourcing your business processes will save you high costs and will allow your key members of the team to focus on the growth of the business, rather than jumping from one role to another.
Areas You Can Outsource
Every businesses operation and functions are going to differ, however, most of them have similar processes that can easily be outsourced.
Human Resources
A startup is never going to flourish if they don’t prepare for growth. Poor management is one of the most common causes of a startup’s failure. Setting up a recruitment drive and seeking the best talent, and a perfect team member is certainly not easy. It can often take months to fill an empty position with the right candidate. This can lead to businesses being left behind with an empty seat.
If startups delegate administrative and HR duties to their key employees, a lot of processes and clerical work that is essential for running the business get overlooked. If you outsource HR, however, you are ensuring your startup only recruits the top candidates, that your team are compensated, have benefit packages that are designed to improve employee retention and engagement.
Data Entry And Processing
These are two of the most commonly outsourced areas in any business, this is because it can easily be outsourced with minimal skill. Whether it is manual work or automated, it can take up a lot of time. The time that you shouldn’t really take away from your key employee’s roles. For specially-trained data entry professionals, this kind of work can be efficiently sorted through sorted and analyze if much less time.
Data is certainly something that is big because of the way technology has moved forward. There are vast amounts of information readily available, therefore it’s crucial for a business to utilise this and find out what’s working for their business and what’s not, where to reach their target market, how to encourage them to use your brand, and what they actually want.
Bookkeeping And Payroll
The majority of startup won’t need to have this looked after full-time. Outsourcing your bookkeeping or utilising a Payroll Services for Small Business, will save you a lot of money. There is a large pool of talented accountants that can look after things like keeping your books in order and your taxes. And when it comes ot doing your taxes, you’re looking at saving a lot of time using outsourcing rather trying to do it yourself with no experience.
Things to Remember
Before you start your search for outsourcing companies, make sure you need to make sure you are fully aware of what business functions and processes you want to outsource. Outline every single process and function within your business and analyze which ones are the most important, which ones your existing team are skilled in, and which are taking up valuable time.
Once you’ve settled on the areas you want to outsource, make sure you always choose a service that will be easy to take over as your business grows. Every area you outsource should be easy to eventually take over in-house.
Successful startups utilise outsourcing as a way to grow. Do you use outsourcing in your business? What do you use it for? Please share in the comments below.
