Should a Small Solo Business Owner Outsource Any of His Operation?

A lot of small business owners would reason that because their business is very small and specialized, they ought to try to save money and increase efficiency by keeping all operating functions in-house under the watchful eye of the owner.

Why trust important activities like communications, product development, customer relations, marketing, financial management, or fulfillment to an outside firm or several firms that won’t have the same concern over these functions that the owner would?

And why pay someone else when the owner is trying to conserve cash and keep operational costs as low as possible?

Here are five good reasons why every small business owner ought to at least consider outsourcing some parts of his operation:

1. To increase business speed.

One of the key advantages of solo business is the fact that the owner can make critical decisions extremely fast.

When a new trend surfaces, the owner can jump right on it and secure “first mover” advantage.

When his customers tell him about a new product that they want, he can quickly move to fulfill that desire.

The fewer operations he has to worry about, the more time he’ll have to spend in product research, development and marketing.

2. To increase business flexibility.

Very few successful businesses were catapulted to that elevated position selling the products and services that they initially offered.

Most seem to have seized emerging opportunities that surfaced once they were in business in other areas of their marketplace.

Flexibility is a huge advantage to solo businesses that learn to recognize customer demands in associated products and lateral markets.

3. To save money.

Maybe this reason is counter-intuitive, but consider this simple example.

A business owner has the choice of spending a great deal of his own time dealing with customer questions, support issues, and keeping contact information and customer mailings in order.

Alternatively, he might outsource his customer relationship management (CRM) function to a call center at a very competitive price (less than what his hourly in-house cost might be).  Or if not a call center, maybe the business owner turns to an outsourced assistant that is willing to take on these responsibilities for a very reasonable contract amount.  Outside the continental U.S. there are many workers that are willing to do full- or part-time online tasks for a fraction of the labor cost it would take inside the country.

Which alternative might make the most sense?

4. To take advantage of customization and expertise.

Purchasing the latest high tech software, learning how to set it up and use it, and then dealing with support issues, new updates, etc. can be an expensive and time consuming proposition.

Would it be more advantageous to use an ASP (application service provider) in such a case?  Or would another alternative be to hire a stay-at-home mom or a young college student to watch over certain aspects of the business operations?

Maybe.  It would be prudent to at least look into the issues and costs involved if the alternative is that the business owner does these tasks himself and it requires a major portion of his day.

Instead of buying expensive software that will become outdated, need technical support, and have to be hosted on the company server, would it ever make sense to employ an ASP that would set up, host, service and update its software at a fraction of what licensing a purchase would cost?  Maybe.

Would it save you time to have experts in the product help you customize your own unique solution?

5. To make up for owner deficiencies.

No small business owner that I know is competent in every aspect of his business operation.

Limited knowledge or understanding, lack of time, and even a lack of desire to perform certain routine but necessary functions are deficiencies or holes in the business operation that can be plugged with outsourcing.

Let’s say that the owner has little knowledge of, and no personal interest in being the company webmaster.

This may not be a function that the solo operator wants to hire an employee to oversee.

The obvious solution is to outsource this separate function to any one of many web site management companies or freelancers.

The owner gets the expertise and help he needs without having to pay an employee a full time salary, benefits, and worry about worker’s comp, payroll taxes, and all the strings attached to regular employers.

Outsourcing may be the very best solution to the dilemma the solo operator faces as he decides how to leverage his own personal time in order to handle all the many operating issues that his small business requires.

Isn’t it at least worth a little investigating to see if outsourcing makes sense in your particular situation?

To your online business success,

Steve Browne

www.stevebrownedirect.com

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