Small Business 2013 – Saving Money Idea #3
Make better use of outsourcing. Outsourcing and off-shoring have bad reputations perpetuated by folks who have no factual idea about either concept. Outsourcing is simply delegating necessary tasks to people or companies outside of your business. Off-shoring is buying goods or services from lower cost regions. Yes, both concepts can cost people their jobs but your job/business should always be your priority.
Does it make sense for you to manage your books, build your website, create your own logo, etc? You may need to perform a cost/benefit analysis to answer the question but generally speaking the answer is no. Isn’t your time better spent with your customers or growing your business or innovating.
Here’s an example. There’s a one person business in my building. He is a craftsman who works 10+ hours a day building things with his hands. Then he spends a few more hours at night and on weekends managing his books, filing tax returns and dealing with other paperwork. Maybe he needs a break from actually being productive. I’d like to think that his time would be better served making things that he can sell. He can find a decent bookkeeper for $12/hour. His tax returns would cost him less than $1,000 a year and he could probably get by at about $400 a year. I’m discouraged to think that he couldn’t find the extra business or cost savings to pay for these services.
Look to outsource any activity that does not serve your customers or grow your business. A short list includes:
- accounting, taxes, and payroll
- web design and maintenance
- social media and blog maintenance
- personal assistants
- lead generation (maybe)
- cleaning and maintenance, and
- IT services
Some businesses have also begun to off-shore these tasks. I watched a brilliant webinar where one business owner off-shored his personal assistant duties to the Philippines. I don’t have personal experience with these services so I don’t want to endorse them just yet. I get inundated with proposals to have firms in India prepare tax returns for me. They aren’t cost effective yet for me but the idea is tempting.
The whole idea of outsourcing is based on old economic principles of scale and specialization. If you find the right partners, you’ll definitely save time and money.