4 Reasons Every Small Business Needs to Outsource

by / ⠀Startup Advice / July 2, 2011

business outsourcing

Buried in paperwork? Need to cut costs? Not enough hours in the day? Try outsourcing…

Outsourcing is a relatively old phenomenon that has recently gotten a modern makeover. In the 90s we used outsourcing to refer to big business sending jobs offshore. Today, outsourcing simply refers to subcontracting an internal business function to an outside provider. Most small businesses outsource functions such as payroll processing, accounting, and similar tasks out of necessity rather than desire. Entrepreneurs take pride in being their own boss, not relying on others, and doing things their own way. However, an increasing number of entrepreneurs are seeing their businesses (and their bank accounts) grow as a result of strategic outsourcing.

Outsourcing saves time

Imagine the time you could have to network, grow your business, and spend time with your family if only you weren’t buried under massive amounts of paper work. Outsourcing administrative and support functions of your business may be the answer to your prayers. Virtual administrative assistants such as HiredOffice.com (http://hiredoffice.com/) can make travel arrangements, manage your bookkeeping, update your website, and a host of other administrative duties giving you time to get back to what’s important… your business! In addition, outsourcing support functions such as human resource management and payroll slimlines normally tedious processes such as onboarding new employees, processing background checks, and administering benefits.

Outsourcing saves money

Let’s do the math. According to salary.com the average Administrative Assistant earns a median salary of $35,134. Most virtual administrative assistants services rates start as low as $10 an hour and as an added bonus the more hours your buy the lower the rate. Still not convinced? The average HR manager for a small business (50 employees or less) earns a median salary of $61,432. Companies such as Project Personnel, a Virginia based human resource management firm, allows small businesses to outsource their entire HR department for monthly retainers as low as $2,000 or $24,000 a year. That’s a savings of over $25,000 per year! And the savings don’t stop there. Outsourcing support functions reduce the cost of capital expenditures such as additional office space, computers, and software.

Outsourcing expands your knowledge base

Outsourcing gives you access to experts in fields related to your business. Marketing gurus, certified public accountants, certified human resource professionals, and customer service coordinators are ready and waiting to help you grow your business. Outsourcing puts you in a unique position to stay informed as well as learn and gather information from industry experts.

Outsourcing builds your employer brand

Your employer brand is the image of your business. This image is built upon reputation and accessibility. Perhaps one of the biggest benefits (and often the most overlooked) of outsourcing is that it gives your business a professional and polished image. Administrative and support functions are handled in a uniform manner allowing you time and resources to focus on perfecting your core services.

In addition to these benefits outsourcing can aid in managing a temporary or permanent increase or decrease in business and can serve as a catalyst for major growth that can not be achieved alone. But like all business processes outsourcing has its disadvantages. Be sure to do your homework before partnering with anyone. There are several legal, security and compliance issues that need to be addressed before entering into any outsourcing agreement.

Shantell Malachi, MBA is CEO of Project Personnel, a Virginia based Human Resource Management firm, and author of the forthcoming book Career Couture. Follow her on Twitter @careercouture for advice for employers and employees.

About The Author

Matt Wilson

Matt Wilson is Co-Founder of Under30Experiences, a travel company for young people ages 21-35. He is the original Co-founder of Under30CEO (Acquired 2016). Matt is the Host of the Live Different Podcast and has 50+ Five Star iTunes Ratings on Health, Fitness, Business and Travel. He brings a unique, uncensored approach to his interviews and writing. His work is published on Under30CEO.com, Forbes, Inc. Magazine, Huffington Post, Reuters, and many others. Matt hosts yoga and fitness retreats in his free time and buys all his food from an organic farm in the jungle of Costa Rica where he lives. He is a shareholder of the Green Bay Packers.