4 Key Reasons Why Your Small Business Should Consider Outsourcing
Outsourcing is simply the act of giving a job that you or an employee would normally handle in-house to an outside company.
When you first started out you had to handle everything on your own, in-house. However, as you grow you’ll find your resources stretched to the max if you attempt to still do everything yourself. Whilst that initial handover may seem daunting, if capacity or lack of expertise is an issue within your organisation, you should consider outsourcing certain business functions.
We’ve highlighted 4 key benefits associated with outsourcing:
1. Increased Efficiency and Focus
Businesses that insist on conducting everything in-house tend to have higher associated costs which either results in a decrease in profit or with the additional costs being passed onto customers. Outsourcing allows for these costs to minimised. Plus the additional time saving gained as a result will allow you to deploy your resources in the areas where you can add the most value to clients, helping you achieve your business growth objectives.
2. Control Capital Costs
Cost-cutting may not be the only reason to outsource, but it’s certainly a major factor. Outsourcing converts fixed costs into variable costs, releases capital for investment elsewhere in your business, and allows you to avoid some large expenditure. Outsourcing can also make your firm more attractive to investors, as you’re able to pump more capital directly into revenue-producing activities.
3. Expertise and Risk Management
You are great at what you do. However, you can’t be an expert in everything and certain tasks require an expert to reduce your liability. A great example is accounting! Whilst you could do your own Payroll, Tax Returns and Compliance in-house, if you aren’t a Chartered Accountant, not only will you miss out on their expert insight into your business finances and tax saving opportunities but you’ll run the high risk of failing to meet HMRC requirements and deadlines, resulting in fines and penalties. Instead, outsource to a team of accountants you can trust and relive yourself of the burden – something to especially bear in mind if you are concerned about MTD.
4. Competitive Advantage
As a small business, you lack the ability to benefit from economies of scale like larger firms. Whereas, with the right outsourcing provider you can benefit from the latest systems, technology and processes. Thus, providing your firm with a competitive advantage over your competition that has yet to outsource.
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