Outsourcing could help you focus on core operations like sales
By definition small businesses lack resource. Outsourcing certain elements of what you do (web design, delivery logistics, warehousing etc) could help you focus on selling. Here we talk about the pros and cons of outsourcing business processes.
For an online store to become a massive success there needs to be someone behind it who can get involved with website design, SEO, content marketing, social media marketing, graphic design, customer service, accounting, operations and supply chain management.
Finding all of these skills in a founding team is rare – many of these skills are not only niche but require constant attention as new developments occur. So what is a small business with limited resources supposed to do? Should you try and hire someone to take care of the areas of your business which you aren’t strong in? Should you resolve to learn the skills yourself? Or should you outsource?
These are the kinds of questions which face all growing ecommerce stores – whether their growth is super speedy or slow burning.
What are the considerations?
Before you have paid anyone to do anything you need to work out what areas you need help in. Understand your core competencies and see what you are left with. Chances are you already have a good idea of which holes you need to fill.
You need to consider how big a part of your business these areas are likely to become. If they are short-term needs then the answer is probably to outsource. If the area only requires attention for a few hours every week, then outsourcing is probably the right answer also.
But what if you believe this additional skill is going to be a large part of your long-term success?
Do you have the capital to invest in hiring someone full-time to take on that role?
Jan Shure is one of the co-founders of fashion portal So Sensational. She and her co-founder decided that outsourcing their media sales was the right option for their business.
“At SoSensational.co.uk we have faced the challenge by outsourcing our media sales,” she says. “As a small start-up, we did not want the additional overheads, training and recruitment required to create our own media sales team and even if we were to interview for a role in-house, we wouldn’t know what to look for.
“We saw that without media sales, we would be merely another fashion website among a multitude of “portal” sites relying on affiliate sales so we decided to work with a company called Ricochet Media. I suspect as time goes by if we grow as we hope to we will think about getting someone in-house but at the moment, outsourcing is the most intelligent way to go about it.”
What are the pros of outsourcing
Gained expertise – By outsourcing your team can leverage skills that they don’t have. Outsourcing companies are experts in their field and will not only be successful in their tasks but swift. You get faster and better quality output.
Cost saving – Hiring full-time members of staff can be time consuming and expensive. Not only are you locking yourself into paying a salary long-term but you might also be facing recruitment costs.
Better efficiency – Leaving an important part of your business strategy in the hands of a proven capable professional can free you up to concentrate on the core elements of your business which need your attention.
Take care of short term requirements – You may be looking for someone to take on an essential part of your business but it is a long-term requirement? For example getting someone else to look after your web design in hopefully a once a year task.
Disadvantages of outsourcing
Risk exposing sensitive data – When you invite a third-party in to perform certain tasks the chances are they will come across some of your confidential company info. This could be damaging in the wrong hands.
Delays in action – When you need something done, it may take some time to get it organised given that you have to go through a potentially busy third-party who potentially has many clients.
The skills remain outside your business – As your business grows you would like to imagine your skills base grows also. By outsourcing you are negating your chances of bringing new skills in-house.
Diminished incentive to succeed – The success or failure of your business is down to your team. At the end of the day, a third-party doesn’t have as much invested in your success as your team does so might not work quite as hard.
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