Four Keys to Small Business Outsourcing Success
Managing a small business is hard enough, but when put into a hostile economic environment it is even more difficult giving the financial strains. Outsourcing, or as we like to say, PEO outsourcing, can be one of the most effective ways to minimize these problems because they limit costs while saving your precious time to focus on growth. Below are some tips to outsourcing which we believe can lower your costs and maximize your income.
#1 – Know your strengths
Today we are presented with more resources than in prior generations, so use them wisely! It makes more sense to hire outside of the company to solve problems in the areas of your weaknesses than doing it yourself. Time is money, so spending time in the areas you work most effectively - will create greater rewards for your organization.
#2 – Limit and manage
Outsourcing can be a wonderful thing, but make sure you don’t lose control at the same time. Too much of a good thing can create issues when not given proper oversight, so as your outsourcing requirements increase make sure quality control goes along side of it. Customers rely on consistency, so as outsourcing usage increases make sure your products or services are not adversely affected.
#3 - Start small
Don’t make large commitments before you know what to expect. Obviously a huge risk would be to outsource a major area of work to someone you have only received references from. Start by giving the group a small responsibility in the company, and gradually increase if you like the outcome. If they are not what you thought they would be, you haven’t wasted a large amount of time and money.
#4 – Do not outsource strategy
You understand your business and your customers better than most people. Therefore, it would be a mistake to outsource strategic decisions whether financial, marketing, product or executive level hiring. When you outsource, outsource administration and activities not core to your business (like payroll, benefits administration, worker’s comp, Payroll Taxes, tactical recruiting) but keep strategic decision making in house.
Conclusion
Outsourcing can be a wonderful competitive advantage, but without the proper partner it is of little use. As you grow as a company be sure to know challenges of this and proceed with both eyes wide open.
For small businesses, looking to get rid of many administrative regulations and tasks we recommend that you use PEO Services, or a Professional Employer Organization. These organizations help mitigate your SUTA, worker’s comp, and medical benefit costs while taking on many administrative tasks. Finding the right PEO (sometimes known as Employee Leasing) will give you that outsourcing advantage to focus on growing your business.
About the Author
Anthony Kelly is a frequent contributor to PEOcompare.com and has experience working for small businesses and employee leasing companies since 1997. He frequently writes about compliance, HRO, PEO Insurance, and other issues affecting the small business owner. He can be reached at a.kelly@peocompare.com.
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