A Guide to Outsourcing for Startups

Although we live in an age where startups are relatively easy to launch, core team members can still find it difficult to manage things by themselves. This is why most startup companies don't survive in the long run. Those startups that do survive and flourish have discovered that they do not have to be limited to a single city, country or even to a continent. Estimates show that over 300,000 jobs in the U.S. are outsourced yearly. Business outsourcing can help startups stretch their limited resources and instead focus on improving their businesses by outsourcing their core activities. 

Why Outsource?

Lower Cost

One of the main benefits of outsourcing is that it maximizes a startup's cost effectiveness. 59% of businesses utilize this method to cut their expenses because outsourcing can reduce salaries for additional personnel, hardware, equipment, and technology costs. Outside organizations can then set up different compensation structures among their employees. This will allow your startup to boost profits and provide lower costs to consumers. Additionally, outsourcing is a great option, especially for those who lack the capacity and space to support permanent in-house workers. 

Recruit Talent

The Bureau of Labor Statistics recorded 1.6 million gig workers in the U.S. last year alone. These numbers highlight what the growing gig economy means for companies; there is now a massive pool of talent to pull from, and the gig culture shows that people are now more open to unconventional work systems. Startups can harness an increased quality of productivity from workers who are a better fit for their business needs. For example, there is an abundance of English speaking countries today whose workers are proficient in international accounting standards. 

Focus on Targets

Startup core teams can focus more on business growth and development thanks to a lightened load with lower costs. Outsourcing also allows startups to build relationships with other organizations and extends their business presence to other countries. Startups are able to set other targets, such as organizing their internal affairs, promoting their brands, improving production, among many other goals.

Tips for Outsourcing

Set Priorities

The first step to outsourcing is to identify the tasks that you need to get done. You’ll want to prioritize the tasks that promote business growth. For example, it’s common to outsource a digital marketing team with SEO, social media, or analytics services. You can also outsource for specialized tasks, such as bookkeeping or IT operations because these professionals are able to execute these jobs more efficiently. Also consider that there could be some tasks that your team tends to struggle with. In these instances, support from workers such as virtual assistants can save time and money.

Select a Good Partner

Once you’ve decided to outsource, make sure you’re selecting the right contractors to help your business flourish. While there are thousands of potential business partners, it is critical to find a capable, reliable outsource provider. You can begin your search in your own network; ask colleagues, businesses owners, and friends if they can recommend a provider offering the services your startup needs. You can also look into company reviews and ratings through LinkedIn or Glassdoor. A good partner will help make it easier for you to eventually take over that specific sector.

Prioritize Communication

To make outsourcing successful, you’ll have to ensure that your expectations and the steps included in the job are explained clearly. Avoid leaving things to assumption, as this can quickly complicate simple matters, especially when outsourcing remotely. There is always a learning curve on the provider side, but consistent communication between the two parties will increase the potential for seamless productivity. Good communication encourages trust and transparency, which will also lead to smoother transactions.

If you’re managing a startup, outsourcing can be a good business strategy, especially if you’re seeking to boost profits and gain a competitive advantage. For more tips, check our feature on assessing startup risks. Knowing the different types of issues that you might run into as a startup will give you a better idea of what type of services you want to outsource. Also, check our website for more articles that contain valuable business information for startups.


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