Top things to consider before jumping into outsourcing

This article is a submission by Djulia Montana de Veyra, a freelance writer with almost two decades of experience under her belt. One of her articles made it to The Source competition’s top 10, besting hundreds of entries. Learn more about Djulia here.

What should you consider before jumping into outsourcing?

Before outsourcing, weigh the timing, the tasks to hand off, the right contractors, and the terms of the deal, then pick a provider with proven expertise.

• Outsource routine, non-core tasks so you can focus on what grows the business.
• Vet providers for expertise, reputation, and clear, upfront costs.
• Set clear contracts and expectations, then step back and let them work.

Laura Lee Sparks, founder and CEO of Legal Marketing Maven, used two decades of experience running successful firms to start her own virtual assistance company. In fact, she grew it into a six-figure business in a matter of months.

One secret behind her success is her willingness to outsource some back-office tasks. Sparks points out that most entrepreneurs have talent. Still, many are held back by the belief that they can do everything on their own.

She believes outsourcing day-to-day tasks frees business owners to spend their time on work that earns income.

Many entrepreneurs see outsourcing as a business strategy reserved for big companies. Technology, however, has made it easy to access. As a matter of fact, outsourcing for a small business has a track record of lifting the bottom line, productivity, and growth.

Will it do the same for you? So what are the top things to consider before jumping into outsourcing?

The timing

The right time to start outsourcing varies by company. Some firms have in-house staff for daily tasks but need extra hands for a new project. Sometimes, that extra load does not justify a full-time hire.

In such cases, outsourcing may be the best move. For example, Tonya Thomas, president of The Small Office Assistant, knew it was time when she wanted growth but had no time to make it happen.

Sparks, on the other hand, advises businesses to outsource some processes right from the start. She recommends beginning with a virtual assistant and an outsourced bookkeeper, then growing the team over time.

Today, Sparks has outsourcing contracts with a project manager, an executive assistant, a graphic designer, a ghostwriter, a web designer, and a virtual bookkeeper.

The business tasks to outsource

More qualified professionals are leaving corporate jobs to freelance. As a result, almost any business task can be outsourced now. Still, that does not mean you should outsource every chance you get.

For one, disliking a task is not a reason to hand it off. So before an outsourcing spree, take a close look at your core business. Knowing which tasks to outsource is half the battle.

What are your core strengths? What do you value most? You should focus your resources on being the best in your industry at these key things.

For example, if your business focuses on product design, avoid outsourcing anything tied to design.

In general, the best tasks for outsourcing fall into the following categories.

Executive expertise

Hiring for executive roles can be very expensive. Luckily, you can hire independent contractors instead.

So rather than pay a full CFO salary each month, you can bring in a contractor with CFO-level skill. They can run periodic financial analysis and check that your bookkeeper handles your books the right way.

Repetitive tasks

Routine jobs fit this category well. For example, these include tracking inventory, data entry, and recording accounts payable.

Specialized knowledge

IT support is a good example here. You can find an outsourced provider whose skills match your exact needs. In most cases, this is far cheaper than hiring a full in-house IT team.

The right contractors

Technology makes it easy to connect with many contractors. But how do you pick the right ones? The best place to start is your own network.

So ask other business owners, or your banker, accountant, and lawyer, for recommendations. In addition, networks like Facebook and LinkedIn are great places to find prospects.

If your connections cannot help, you can advertise on work-at-home sites or send proposals to trade groups.

Finding the right contractor often means getting solid information on each one. For example, platforms like Upwork, Freelancer, and Fiverr are great for this. You can also seek help from established BPO providers like OP360.

The great thing about these sites is that you can see how past clients rated the work. On top of that, you get access to detailed freelancer profiles.

Next, be clear about your performance metrics. Do you value speed over quality? Will you pay top dollar for first-rate work? Or would you rather save money with lower-cost work?

Many businesses forget that providers vary widely, so they pick the wrong one. To avoid common outsourcing mistakes, have a clear, open conversation with each prospect first.

The right arrangement

Your work does not end once you find the right provider. You also need a well-defined deal. So be ready to spend time on a clear contract that spells out the performance you expect.

Next, add incentives that keep your contractor focused on what matters to you, not just their own way of working.

Also, communicate your expectations well. Never assume your offshore team is thinking what you are thinking. In fact, good managers take the blame for failed delivery when their instructions were unclear.

You should also expect a learning curve with a new offshore contractor. Know that they will get the hang of it. As a result, you earn the freedom to focus on your core business. Your real job is to step back and let your contractors do theirs.

So be willing to let go of control. Micromanaging your offshore employees defeats the point of outsourcing, which is to save time and attention. Weighing the outsourcing risks early also helps you plan around them.

If you like to do everything yourself, the process gets easier when you delegate the management of these relationships.

Often, it all comes down to the right mindset. A hands-free approach to low-level work is the biggest investment you can make for long-term success. In short, this is the very heart of outsourcing.

Finding the right outsourcing company to work with

Now that you know what to consider, here is how to choose the right outsourcing provider.

Industry expertise

Expertise should be a top criterion. So evaluate your choices of outsourcing companies against these factors.

• Technology
• Skill sets
• Technical expertise
• Industry experience

Market reputation

Outsourcing helps you save on costs. Still, it should not lower the quality you want. For example, you should not work with a provider that misses deadlines or delivers poor work.

This is why market reputation matters. So check their client reviews and testimonials first. In addition, look at their past projects to gauge skills, outcomes, and real capability.

Costs

Some outsourcers overlook costs. Before you look for a vendor, set a specific budget. Then discuss costs upfront with your chosen company to avoid hidden fees.

Take these points to heart, and embrace the world of benefits outsourcing offers.

Frequently asked questions about outsourcing

When is the right time to start outsourcing?

Start when extra work appears but does not justify a full-time hire. Many founders also outsource early, beginning with a virtual assistant and a bookkeeper. The goal is to free your time for income-generating work.

Which tasks should I outsource first?

Begin with routine, non-core tasks, such as data entry, bookkeeping, and admin. You can also outsource specialized work like IT support or executive-level analysis. Keep core activities, such as product design, in-house.

How do I choose the right outsourcing provider?

Judge providers on expertise, reputation, and clear pricing. Check reviews, testimonials, and past projects before you commit. A clear conversation upfront helps you avoid the wrong fit.

How much management does outsourcing need?

Expect a short learning curve, then less day-to-day oversight. Set clear contracts and expectations, then step back. Micromanaging offshore staff defeats the purpose of outsourcing.

Does outsourcing really work for small businesses?

Yes. Technology has made outsourcing accessible to small firms, not just big ones. Many small businesses use it to boost productivity, cut costs, and grow faster.