Every business has those moments where the current business model breaks and immediate change is necessary. Sometimes, those changes can be handled internally among your team by shuffling responsibilities or updating processes; other times, the model needs the assistance of an outside service provider. Let me provide an example from my firm.
We used to process payroll for over 40 clients. One afternoon, my team member in charge of all those payrolls walked in my office to let me know, through tears and an exhausted countenance, that she had missed one of our clients’ payrolls. Thankfully, the client understood and it was only off by one day, but that wasn’t the issue at hand. My team member was obviously overworked in this area and our process was broken. So, in a matter of days, we contacted our payroll platform providers, decided to outsource ALL preparation to them to remove it from our team, and the problem was remedied. No one missed a beat and my team was forever thankful that we didn’t have to schedule vacations around payroll processing dates.
When should you consider outsourcing? I’ve given you one prime example above, but there are other less catastrophic circumstances that may lead you to consider it.
1. You’re growing quickly and you need outside expertise. We see this with new customers in our firm; it’s the most basic example of a time to consider outsourcing. They’ve set up a new business and they’ve done all their accounting, but now they don’t have time for it anymore. Something has fallen through the cracks and they need an expert in accounting to provide support.
2. You’re adding employees and you can’t keep up with the HR laws. This is a tricky one. While some payroll companies offer HR assistance, there are companies out there that do nothing but HR compliance and assistance. It’s often too expensive to hire an internal employee to only handle HR, so an outsourced professional services provider is ideal in this situation.
3. You’ve lost a key employee and you’re paralyzed. This is a really scary and unfortunate time in a business, but it happens all the time. Work gets siloed internally and someone in charge of a very important task (sales, for instance, or a bookkeeper who prepared payroll and invoices) leaves suddenly or is fired. You may have to outsource some responsibilities so that tasks aren’t forgotten or missed. Let’s say you lose the person in charge of sending invoices to your clients. You need to replace that person ASAP if you want to keep your cash flow in line.
What potential benefits could outsourcing offer you?
1. An outside expert who has made a career out of doing the very task that you can’t do right now: This is the most obvious one. If you are a great graphic designer, changes are you are not also a talented accountant. You will get to a point where you need expertise so you can focus on being a great graphic designer.
2. An outside expert who has none of the biases that you currently have: When it’s your business, you sometimes have a hard time being objective about every aspect of it. You may think you’re the best salesman of all time, but outsourcing the project of finding leads may show something different. It may show you’ve been ignoring a very important niche, but your internal biases didn’t allow you to see that. Our consulting engagements are borne out of this particular area. Sometimes, business owners are the worst candidates for assessing the health of their own business.
3. An unlimited talent pool: There are so many talented business owners all over the world who make entire careers out of providing outsourced expertise to other businesses. While you may only be used to hiring employees from your local area, if you outsource, you’re not bound by geographic boundaries.
When we consult with our business owners about outsourcing, we place a great deal of importance on analyzing how the task was being done before and how it needs to be done now. After all, if you outsource a broken task and insist that it be done the same way you’ve always done it, you won’t experience the true benefits that outsourcing can bring. If you have questions about whether outsourcing is a good idea for you company, please let us know and we can help you think through it!