What is outsourcing? Is it for you?

If you own a business, most likely you started out doing the majority of work yourself. Of ourse, this sooner, rather than later, can quickly become a heavy burden. Definitely, the responsibility to make sure that your business day in and day out is a serious undertaking.

What can be done?  It is important to always try to improve and make things work or run more efficiently and cost effective. This helps in both making a more lean company  and reducing wasted time, effort and most importantly – wasted money! But of course, ususally this isn’t the answer.

Hiring employees or additional employees to the ones that you already have can very quickly become a serious and costly obligation.

This is where outsourcing comes in. Outsourcing is what many companies and businesses do to continue well deserved growth and maximize their cost reduction strategies, while at the same time, continue moving forward.

In this article we will discuss outsourcing and how it can benefit your business.

Outsourcing and you

Outsourcing is simply hiring someone, many times a private contractor that doesn’t have a direct relationship to your business, to perform a service for your business.

Of course, outsourcing can refer to many different types of services. For example, accounting, audit, payroll, legal, human resources, recruiting and many more are just a few examples of the types of services that can be provided through outsourcing.

Usually, the person that you hire is either a professional in their practice or take on a consulting consulting role in their particular field of expertise. Also, this person will most likely not have you as their only client, this means that, probably, you’ll need to work out schedules witih your contractor so as to be able to both manage and be informed of the progress of the project.

Many times businesses or companies that provide outsourcing services will either have their own office or will at the least be able to work on their assgnments outside of your office space.

A outsourcing services agreement don’t necessarily have to be set in stone from the onset, it is important to first understand what your obligations are and how to manage the properly. Once general service terms and policy have been agreed upon a contract should be signed by both parties. In this manner you have in writing the full scope, limitation of responsibility and fees of your projects.

Benefits

Why choose to outsource? Outsouring can be invaluable in assisting with cost reduction and even a faster turnaround. Also, many times, either professionals or firms that provide outsourcing services have greater expertise and more experience as a group than what simply one individual might have.

Of course, this situation can stand to greatly benefit yourself and your business. Although, I don’t want to give the impression that all outsourcing firms are the same, they’re not. Also, the terms, fees and final results can vary from one firm to another.

To take advantage of the benefits that outsourcing can give you, we recommend to first be certain of what your needs are. Second, compare between outsourcing firms the different offers that each can provide you. Then, take the time to compare the positive and the negative and compare it with what your needs are.

As an additional point, keep in mind that personal relationships and communication are vital in outsourcing work. This is because the firm providing you the service won’t be at your physical location and most likely you won’t see the firm members that work for you very often. So if the firm member in charge of your account can make a good impression on you and expresses himself in a way that you can understand and there is fluid communication between the two, then you may very well have an excellent business opportunity.

Delegate… the last thing anyone wants to do

It’s no secret that, as a business owner, especially if its your first business, delegating can be a very difficult concept to get accustomed to. This is because, not only is your business everything, but only you can run your business the way that you do. Which, in part is true, but it is a line of thinking that really won’t benefit yourself, your personal life and much less… your business!

So what can be done? The answer is simple. Start by taking the time to sit down and convene on what are  the tasks that you do on a daily basis. Then rank each task based on the amount of time that it takes away from you. Finally, of the tasks that you take care of, make a list of which ones don’t need to be done by you.

The task most likely have to do with accounting, legal , human resources or it could even be very mundane things, like photocopying and file work. When you first start out, of course all these things need to be done by you to the best of your ability or at least until a reasonable point, but that doesn’t mean that it should be that way all the time.

Another justification might be that, “ if I do it by myself, I’m saving money”, yes… that’s true, to a point, but how much money do you lose by not focusing on client relationships or product promotion/improvement?

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What ever your circumstantes may be, it’s important to sit down and consider what your short and medium term goals are and the direction that you want to take your business. Rash and shortsighted decisions don’t reflect too well on the balance sheet of any company, if you need help deciding, at SAENICSA | Accounting & Tax Services we would be glad to be of assitance.

SAENICSA is a CPA firm located in Central America, we provide accounting, tax, outsourcing and consulting services to our clients. If you would like assistance with your business, contact us HERE.