Tips for Creating an Outsourcing Strategy

As your business grows, you will likely feel about outsourcing some of your services. It becomes hard to focus on all activities of business simultaneously. As an entrepreneur, you would like to concentrate on core activities to ensure that your business keeps running and stays ahead of your competitors. You don’t need to outsource some of your business activities only when you are running a big company.

Even if you are a sole proprietor or running a small business, you may not have enough time left to focus on all activities. Remember that you cannot leave a task unattended because it will hamper the growth of your business. Before you outsource, you will have to identify whether this is the right time to do so. The most common reasons why you will need to outsource your business activities are:

  • you want to lower down the cost
  • you want to expand to new market areas
  • you want to free up resources
  • you want to improve productivity

Once you have identified the reason for outsourcing, the next step is to create an outsourcing strategy.

Choose the task to outsource

Outsource or Hire

As an entrepreneur, you cannot be an expert at every task. Further, if you hire staff for each activity, you will not only be spending a lot of money, but you will be struggling to manage everything. Most of the small enterprises end up taking out provident loans to survive after having blocked all monetary resources. By outsourcing some of your activities, you can save on operation costs.

For instance, you can save on payroll and will be able to run your business from a small office space. There are several activities you can outsource like customer support, IT, recruitment, and the like. Identify which of the service you should outsource, estimate how it can benefit you, how much money you will save by doing so, and how it will affect the overall productivity of your business.

Search for outsourcing agencies

Outsourcing Agencies

Various outsourcing agencies are out there, and all of them have a different specialized area. Contact other outsourcing agencies and ask them about their expertise. One of the most significant benefits of outsourcing is you can gain an advantage from their experience. Do not forget to ask cost and compare it with other agencies in the same expertise.

Further, you should also compare the cost with the estimation you get in case you decide not to outsource. Make sure that the outsourcing cost is not more than otherwise. Do not clinch a deal just because it is cheaper. Make sure that you have spoken to other clients of the outsourcing company. Ask them if they are satisfied with their services. Read online reviews to know what people say about their work.

Assess the outsourcing risk

Outsourcing Risk

Outsourcing can undoubtedly help you save a ton of money, but there is no point in doing it if you can get it done with your existing in-house staff. For instance, if you do not have a large customer base for handling queries, emails, and phone calls, you can assign this responsibility to your in-house staff. However, if you have to spend money on training new staff and on space to fit all of them, outsourcing will be a cost-effective solution.

Do not forget to evaluate other risks associated with outsourcing agencies. You must choose a company that meets your quality expectations. You are outsourcing one of your business activities, and that will have a direct impact on your business. If they do not handle responsibility professionally, it will hamper your business.

For instance, if you have outsourced your payroll department, it is their responsibility to shortlist skilled candidates, so you close the hiring process as soon as possible. Before you sign the contract, make sure that the outsourcing company will have all skills to meet your expectations. Make a list of must-have qualities. Try to communicate quality standards in writing, so both of you are on the same page.

Avoid being locked


When you find an outsourcing company better than others, you can be tempted to sign the agreement very soon. However, do not forget that nothing is permanent. Sometimes they may compromise with their quality because of being loaded with multiple projects.

In such a scenario, you would like to terminate the contract and enter into with other outsourcing companies. Before you sign the contract, make sure that your agreement allows you to exit anytime without bearing any penalty. 

Outsourcing can help you save a lot of money, but outsource your business activities only when you feel its need. Sometimes you are not able to focus on everything just because you are not organized. Make sure that this is not the reason for outsourcing your business activities. While outsourcing, bear the points mentioned above in your mind.

Description: To create an outsourcing strategy, make sure that you have identified the reason, researched the market, and assessed the risk.