Once thought to be the main cost-cutting practice of the world’s largest corporations, outsourcing is now a common business strategy among companies both big and small. From manufacturing to accounting to IT services, companies are looking outside of their internal teams to efficiently address non-core business operations. Between 2000 and 2012, the global market size for outsourced services grew from $45.60 billion to $99.10 billion.
If your business has reached a point where employees and processes are operating at maximum capacity, it is likely that your business has little to no room for further growth.
But when, exactly, should business owners consider outsourcing work to a human resources firm, marketing affiliate or computer support specialist? At what point does the potential cost savings that outsourcing can provide outweigh the loss of operational control? Below are five signs that let business owners know they should consider outsourcing.
1. There is Too Much Multi-tasking Going On
Yes, some multi-tasking among employees is good in order to help your business run more efficiently. However, if your head product developer is also doubling as your accountant, answering calls to the front desk, and working at finding new business partnerships, chances are they are being stretched too thin.
2. Your Business Has Stopped Growing
If your business has reached a point where employees and processes are operating at maximum capacity, it is likely that your business has little to no room for further growth. This may be fine for business owners who are comfortable operating at a certain production and profit earning level, but for those entrepreneurs who are eyeing the next level of success for their businesses, outsourcing certain processes can be a way of precipitating future business growth.
3. You are Too Far Away from Your Core Competencies
The menial, day-to-day tasks of running a business can become a major time-suck, especially for very small or self-run businesses. Instead of focusing on delivering top-notch, industry-leading work to your clients, the majority of your time is spent on invoicing, filling out tax forms, and fielding phone calls. If you spend over 20% of your time on business activities outside of your core competency, it’s time to consider working with an outsource partner.
4. You Have No Partnerships or Business Connections
Partnering is a great way to develop friendly business relationships and position your company for future growth. The problem is, many business owners have trouble turning over some control when it comes to their operational processes, making it difficult to develop beneficial business partnerships. If you are a business owner whose company exists in a bubble, with little to no contact with companies who provide ancillary services to your own, it may be time to reach out and expand your business network.
5. You are Losing Ground to Competitors
No matter how many hours you put in and how much better your product is, your competition always seems to be one step ahead. Sound familiar? If so, it’s likely that they are outsourcing certain business processes in order to operate at a more efficient level than you are. When your competitors start to outsource, it’s an indication that you should follow suit or fall behind.
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global market image courtesy of Wikimedia Commons