Should Your Startup Outsource?

Outsourcing has long been the practice of large companies looking to cut costs and streamline processes.  But many small startups have also chosen to outsource some of the key functions of their business in order to manage things more effectively.  Many young companies are running lean and mean with few employees wearing many hats.  This is par for the course in a startup, but it also places you at risk because it means you’re not giving the highest level of attention to any one part of your business plan.

Individual pieces of your overall strategy such as marketing, accounting, or sales should have dedicated professionals running them.  Yet it is expensive to hire a staff large enough to take on each portion of your business individually.

In recent years, a plethora of small firms and freelancers have established themselves, focused on providing small business solutions and specialized, outsourced management of key business areas.  Thanks to modern technology, outsourcing has become affordable and allows these professionals to work remotely, without even taking up office space in your facility. Common functions include accounting, call center outsourcing, and internet marketing, although really any business process can be completed off-site.

But is outsourcing always the best option for a startup?  Keep in mind that there is no way you’re ever going to get out of working hard for your own business.  Outsourcing can help lift some of the burden, but even then you’ll have to stay on top of everything that you’ve hired someone else to do.

Additionally, in order to be competitive in any market, you must strive to stand out from the crowd.  If you’re hiring outside groups to do things for you, chances are high that they will be using tried and true methods.  While this offers you some stability, it also means that you’re not going to be blazing any new trails.  As an entrepreneur, you need to think creatively when it comes to your business strategy.  You are the only one who has that drive and the passion to get your company moving in a unique direction.  If you do outsource, it is essential that you maintain constant vigilance over the work being done for you by outside firms.

As an entrepreneur, you are the only who knows if you really need help.  It is up to you to balance the decision between the costs associated with outsourcing with your own limitations of time and ability for managing certain aspects of your startup.

If you do decide to outsource, make sure you weigh your decision on whom to hire as seriously as the decision to hire in the first place.  There are usually multiple options and you should be prepared to meet with these firms, check references, and find out their processes for working, communicating, and implementing before you sign a contract.  Once you hire an outsourcing firm, they become an integral part of your business and you will be working with them on a daily basis.  Their overall business philosophy should compliment yours.