Even the small business start-up maintains some sort of web presence: a blog, a website, listings on every social networking site imaginable, or just a post on Craig’s List offering low-cost bookkeeping services in a geospecific part of the world. 24/7, global economy.
The “small business” better practices manual” has been revised. A human being no longer answers the company phone and we have all been trapped in automated call center hell. In fact, it has become the norm, unfortunately.
And while all of these trends impact small businesses significantly in terms of productivity, market expansion, and required understanding of web marketing strategies, perhaps the biggest impact on small business practices is outsourcing.
More and more small business owners are outsourcing routine operations, running their businesses more efficiently. Today’s business owner can outsource anything. Do you need a virtual assistant to run daily operations? You can find one on deal websites like oDesk, Elance, and other sites where virtual assistants post customer profiles and reviews to help you select the right VA for your business needs.
You can outsource legal services, bookkeeping, accounting and tax preparation services, marketing and SEO services, site copywriting services, all of the above, or none of the above. You may simply need a data entry clerk. No problem. You can rent one, and at a lower cost.
The staff is expensive. Wages, benefits, lost productivity due to sick days, personal days, holidays, vacations, and other break times dig into small-margin businesses like insurance brokerage, CFAs, and other service providers.
Outsourcing offers a list of benefits:
- You only pay for the work done.
- You pay less because some of this work is outsourced with savings where $20 is a day’s wage, and a good day’s wage.
- You only pay for the services you really need. This requires an analysis of your current business model to identify business activities that can be outsourced and, just as importantly, those business activities that need to stay “in house.”
smart outsourcing
During your analysis, keep in mind the needs of your customer base. For example…
…if your business bills your customer base on a monthly basis for services rendered, accurate and reliable accounting and billing services are a critical part of your business model. Conversely, if you only bill clients annually, or when services are rendered, perhaps this routine task can be outsourced to an accounting service in Mumbai.
search locally first
However, when outsourcing, look locally first. There are many local people who are outsourced and often these people are highly motivated work at home parents or part time workers who can reduce the operating costs of your business. Local outsourcers understand the culture and language nuances that a foreign outsourcer might not.
Don’t outsource critical business functions
I would not recommend outsourcing legal services for even the most mundane question related to a contract, risk exposure, or other matters that may negatively affect your business.
I will pay the extra for knowledge of the law from a legal professional. Same with the key decision makers within my organization. In fact, you can outsource marketing, but if marketing generates profit for the company, it is a valuable internal asset, even at the cost of keeping a marketing professional on staff. I would advise against cutting costs by risking a mature local brand and expanding the company’s customer base with excellent customer retention. That is a business function that I want to keep close to home.
Avoid subcontracting customers or customer contacts
If your bookkeeping needs are simple, outsource. This is an administrative function. it’s routine AND you don’t have any interaction with customers or customers.
I recommend keeping humans on staff to take calls. An automated call pickup system that requires an infinite number of key-ins is not what your customers or clients want. They want to speak to a human who can provide answers, take an order, check the status of an order, or direct the caller to the right person in the organization to resolve the caller’s issue or answer their question.
Customer support is an essential element in building a stable customer base and that is the key to long-term business success. I always advise client-friends to consider “a human being on the line” as an investment, one that pays handsome dividends. Quality care keeps customers in place and you want complete and immediate oversight of customer care needs and solutions.
Avoid outsourcing jobs that require an understanding of the local culture
If your business maintains a website (and you should), you’ve probably heard that informative content is important for gaining search engine recognition.
Some business owners outsource website content writing abroad, and writing by a non-native English speaker can have humorous or disastrous results. If you outsource blog posts to a low-cost company in the Philippines, to a content mill that produces one-page articles for $1.00 each, well, you get what you pay for.
Your website should sound like you and appeal to the needs and wants of your target demographic, whether they are local, regional or national. Content written by ESL writers always sounds a bit strange. It is not a criticism. Just a lack of understanding of what motivates your target audience.
So what jobs SHOULD you outsource?
A US based company wanted another outlet for their high end product and vending kiosks were considered. The company hired a researcher who collected tons of data, metrics, articles, and other informative content about the who, what, where, when, why, and why not of kiosk marketing.
For less than $150, the company had all the metrics and insights it needed to determine if kiosks were in the company’s future. (By the way, they weren’t.) So research is an activity that can be outsourced with positive results at very reasonable prices.
Data entry, lead generation, market research, data collection, search engine optimization for the company website, marketing collateral development, and special projects can be outsourced. without compromising your company’s hard-earned reputation for quality, while expanding margins and increasing productivity. .
General rules for the use of subcontracting:
1. If it is customer involvement, keep the internal activity under your supervision. Customer retention software is available. Shop a program, track orders, business commitments, customer birthdays, and other data that builds happy shoppers and an ever-expanding customer base.
2. If you involve critical business functions, such as billing, order entry, or basic customer service, keep the activity within your offices. Use internal assets and trusted advisors to provide advice on marketing, web development, legal questions and contract review, accounts payable, accounts receivable, and other functions that play a critical role in long-term business success.
Too many small business owners are short-sighted and simply look for immediate cost savings. A longer-term vision demonstrates a good return on investment in the people under your direction.
3. One-time projects (information research, market research, web design and optimization, a trade show far away) can be outsourced. Once the job is done to your satisfaction, you pay a small fee to outsourcing while your expensive in-house staff is engaged in more profitable and productive activities.
4. Administrative, routine, and outsourced activity is the sweet spot to focus on the most profitable uses of providers outside of the office. If your in-house staff is shuffling paper or entering customer orders, you’re wasting valuable operating capital.
Outsourcing these activities is simple, and by purchasing your outsourcing needs locally, you have an instant relationship with the service provider. Hire local subcontractors, save money, and ensure your rental assets understand the local culture and what your buyers want when using your business.
Examine your business activities: lead generation, order capture, customer support, record keeping, make a long list. Cross out any activity where your business comes into contact with customers by phone, email, instant messaging, or any other means. Customer service is essential for long-term business growth.
When outsourcing is done smartly, it increases your bottom line faster than you ever imagined. Outsourcing is a powerful business trend and it is a powerful business tool.
Use it wisely.
