May 27th, 2008
Introduction – Only a couple of years ago, only very few business operators would ever have given any consideration to letting a vendor take on a part – no matter how large or small – of their contracts or projects as a part of an outsourcing agreement. However, even within that very short time, things have made a dramatic change. Outsourcing has become an important part of business reality, and successful business owners are coming to realize how truly valuable it really is as a practical part of their business strategy. Cost cutting and renewed dedication to the core business itself – the meeting of the customer needs – has required that many tasks be delegated not among employees, but instead to the most worthy bidder. To the small business person, the benefits of outsourcing are double-sided.
1. A small business can increase revenues by opening itself up to outsourcing contracts. By doing this, a small business will not only receive contracts directly from the clients, but can also receive contracts from other companies who need all or part of an agreement filled due to overflow of work, or a lack of specialization in some area within their own company. Tremendous opportunities present themselves in this field, as long as you – the small businessperson – know where to look. The internet can be invaluable in this sense. There are many outsourcing contract portals which bring together small businesses and outsourcing contracts. Furthermore, there are opportunities within sub-contracts in the Federal government’s GSA Schedules (www.gsa.gov ). Have a look at sites such as eLance (www.elance.com) and Guru (www.guru.com) and other freelancing sites that offer opportunities to individuals and vendors, and you’ll find that there are ample contracts out there for your kind of specialization. As you go over each project posting, ask yourself the following questions:
* Can I make money with this contract?
* Can I deliver this contract?
* Is the risk/reward ratio good enough?
* Does it fit with our strategy?
2. Should you find that you are experiencing overflow of your own, or that you have been offered a contract but there is an element that is outside of your specialization, you may find that outsourcing to another vendor may be your best choice.
It isn’t just large companies that benefit from sending work to others. Your small business can take on a great deal more contracts when you know that you will always be able to fill them, and that you have the specialization and the expertise that is required, because you can outsource to professionals as needed.
Furthermore, you’ll likely find that individuals and companies that provide outsourcing services are capable of providing you with the same quality of work, but for considerably less money, as you will not be required to provide these people with benefits, and fewer overhead expenses will arise.
Once you have begun outsourcing, you’ll quickly discover that your business will also become much more focused on the issues that are most important to you, while the periphery and the details are managed by outside experts. This frees up large amounts of resources, as well as your time, so that it may be used for much more important and broader issues and tasks within your own company.
Furthermore, companies which handle outsourced work are frequently streamlined so that they may provide world-class capabilities, as well as having access to the latest in technologies; which may be financially unavailable for purchase by your own company. This permits your business to take advantage of state-of-the-art technologies, without the additional purchasing and maintenance costs.
What’s more, outsourcing can be a key component to growth and expansion in your own business. It is an extremely cost-effective way to begin building the foundations you need to grow and evolve, without the sudden initial costs. Instead, the growth is phased in at a more manageable pace.
Done properly, and for the right reasons, outsourcing can be an almost ideal business strategy for your business. Create strong relationships with quality outsourcing businesses, and make strong bids on contracts at different contracting portals, and the sky’s the limit for your growth possibilities.
About Our Guest Columnist:
Robert Moment is sought-after small business coach and author of Invisible Profits: The Power of Exceptional Customer. Robert specializes in teaching entrepreneurs and small business owners how to start a business that profits and grow. Visit http://www.howtostartyoursmallbusiness.com and sign-up for the FREE 7 day Small Business Startup e-course.
Entry Filed under: Why Outsource?