The key areas you should outsource when starting a business
Virtually every internal business function can be outsourced to a firm that will provide the service to your company, in many instances at a lower cost and higher quality than you could replicate yourself.
Every business uses outsourced services. Many businesses don’t deliver products directly to the customer or do their own audits or taxes, or self-insure the business. They outsource those functions that are not strategic but which must be performed to manage the business operations.
- Finance and Accounting: The Concept of the Fractional CFO
Many small businesses use very simple accounting packages or even QuickBooks, an effective accounting software package for small and mid-sized companies. But the biggest cost of your finance and accounting is the people cost, including hiring and retaining qualified people.
Also, unless you are a larger middle-market business, your company may not need a full-time CFO. Consider outsourcing all of your accounting and finance function, which could include using a “fractional” CFO who would spend a few hours a week as your company’s finance executive. There are many highly qualified finance and “back office” accounting organizations in the market. The cost savings can be significant, and time savings for management to focus on growth issues can be invaluable.
- Technology: It’s in the Cloud
Cloud computing is the use of computing resources (hardware and software) that are delivered as a service over a network (typically the Internet) thereby obviating the need for capital investment in technology, and which offers use-based pricing similar to electricity usage. End users access cloud-based applications through a web browser or a lightweight desktop or mobile app while the business software and users’ data are stored on servers at a remote location.
Key advantages include:
Achieve greater scale with fewer employees and little capital investment; cost is “by the drink.”
Go global at an earlier stage by deploying Software-as-a-Service (SaaS) and Platform-as-a-Service (PaaS) technology not previously available to mid-sized companies.
Deploy online CRM and customer care to “re-personalize” your customers’ experience and make relationships more “sticky.”
- Human Resources: The Role of Professional Employer Organizations
Professional Employee Organization (PEOs) is companies that can manage and run most of the human resource functions of a business. Most small and mid-sized companies should consider outsourcing HR, including hiring, benefits, management, HR compliance, and a concept of “co-employment,” in which your employees are essentially employed by the PEO and you. A PEO can help process your payroll and offer your employees better benefits. In addition, by pooling with other companies through a PEO, you can get significant discounts on the cost of benefits.
So the natural question is what is left if I outsource everything? The answer is your company’s intellectual capital. Successful companies have always focused on what they do best. Companies such as Apple do not manufacture their products—they outsource that process and focus on design and innovation. By not outsourcing everything that does not foster creativity and growth, you may be creating an insurmountable barrier to starting a new business or growing your existing one. Outsource it! outsource outsource