Outsourcing has significant advantages for cash-strapped startups, let’s discover here below 5 good reasons to do so.
#1. Avoid long-term commitments
Having to make a long-term deal with a vendor when you don’t know what next month’s income will be is problematic. When you outsource, you can avoid potentially unsustainable commitments in favor of short-term or one-off arrangements that let you pay for services when you have the budget.
#2. Keep more money in the bank
One big difference between freelancers and full-time employees is the overall cost to the business. Freelancers usually cost less than employees, as you don’t have to pay for payroll taxes, health insurance, workers compensation, unemployment insurance, sick days, pensions or vacations. Use this calculator to see how much you could save. As long as your freelancer really IS a freelancer, you should be fine, but check up on IRS rules to be sure you’re on the right side of the law.
#3. Reduce risk
Any HR specialist will tell you that it can take a while to get rid of an underperforming employee (who will be costing you business the whole time). And if you have a binding long-term contract with a service provider, it can be difficult – and costly – to get out of it if you need to. Outsourcing reduces that risk, especially if you opt for short-term arrangements while you see how a freelancer works. If you’re unhappy or your budget changes, you have no obligation to hire them again beyond the original contract so if you need to change your working relationship it’s a whole lot easier.
#4. Increase efficiency
As a startup founder, it’s unlikely that you’re an expert in everything, so stop trying to do everything. It’s inefficient and won’t help your business in the long run. Outsourcing lets you fill the gaps by hiring freelancers who are experts in the key tasks you need, so you can focus on what you do best.
#5. Focus on growth
All these benefits add up to more spare cash for your startup because your income isn’t tied up in unsustainable long-term arrangements. That means you can invest more in the business and help it to grow. An Entrepreneur article cites the example of The Small Office Assistant. When its president started outsourcing, revenue actually doubled.
What Can You Outsource?
So how do you decide what to outsource? These days, there are more and more tasks that qualify, as technology allows freelance professionals to work from anywhere in the world. According to one Forbes contributor, consider outsourcing any task that:
- Can be done virtually
- Needs little human interaction
- Is web-driven
- Should be done by someone else
Areas to consider outsourcing include:
- Graphic & design such as logos, business cards or banner ads
- Communication with vendors, service providers, customers and other clients via a virtual assistant
- Proofreading & editing
- Whiteboard & explainer videos
- Web programming and IT management
- Legal services
- SEO and social media marketing
- Public relations
Let’s face it, you don’t need to book your trips and type information into online forms yourself if you can get a virtual assistant to do it for you. You can also get outsourced personnel to make sales calls so that you can generate more leads for your business. And with most things running in the cloud, managing IT externally puts the headache of keeping things up to date in someone else’s in-tray. For jobs like these, outsourcing makes sense.
But there are two important caveats. First, there may be some tasks you don’t enjoy doing, but not wanting to do a job isn’t enough justification for outsourcing it. If a particular function is a core part of your business, you need to stay in control. Second, don’t outsource anything that can compromise the security of your customer or business data.
5 Steps to Successful Outsourcing
If you’ve decided that outsourcing is for you, here’s how you do it successfully.
Step 1. Find the Right Freelancers
One of the secrets to successful outsourcing is finding service providers who can work effectively with your company. You need to know you can trust them and that they will keep your reputation with your customers intact. Here is how you can proceed within Fiverr’s marketplace.
Finding Freelancers on Feelance
Step 2. Check Their Credentials
The next step is to whittle down the list of people you found to the ones you want to work with. Depending on the method you choose, options for this include:
- Looking at star ratings
- Number of reviews received
- Numbers of orders in queue
- Number of revisions offered
Those are all information that will help you find the right person to outsource to.
Step 3. Put Processes in Place
While you’ll be working with an expert, you’ll need to be organized before you can hand things off to your chosen freelancer. For example, if you’re working with a virtual assistant, you’ll need to work out templates for letters you send out regularly and rules for what communications should go out when. And if someone’s looking after social media communication, you’ll need to talk about your brand voice, tone and the type of content that’s appropriate or inappropriate. The right professional will have constructive suggestions, but you still have to set the direction and make the final decision.
Step 4. Set Expectations
It’s important to be clear about the level of service you expect. If you’re getting someone to create an infographic for you, it’s reasonable to want the provider to make it fit with the look and feel of your brand and reflect the quality your customers expect. If you’re getting someone to do research for you, you’ll want it to be up-to-date. If someone’s managing your social media marketing, then you’ll want to see a steady increase in engagement and fans. The clearer your expectations are, the easier it is to ensure they are being met.
Step 5. Stay in Control
It’s important to recognize that outsourcing isn’t a set it and forget it proposition. Someone in your company still needs to be responsible for working with any freelancer and ensuring that they deliver what they are contracted to do. That might be you, but more likely it will be someone else in your company (assuming there are a few of you). Freelancers need someone they can get answers from if there is an issue, so make sure it’s someone who has time to stay in touch.
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