Your SME: When Should You Outsource?
SMEs (Small and Medium-sized Entities) go through many cycles, one of which is figuring out how to get their business to the next level. As your business grows you face an increasing need for specialised skills which are either unavailable due to skills shortages, or are too expensive.
Give your business a sizeable boost
Advantages of outsourcing
There are many –
- It can lower your costs leading to more sales, greater market share and increased profitability, e.g. shifting manufacture to lower cost countries like China.
- When your alternative to outsourcing is to increase your staff complement, you avoid all the associated risks and costs, including long-term commitments like employment contracts, additional work space, facilities, management time etc.
- By outsourcing functions, you can focus on the key areas of your business. Payroll is a frequent example.
- Outsourcing reduces your capital and funding requirements. For example, outsourcing distribution saves warehouse capital expenditure plus associated staffing costs. These resources can rather be ploughed into the key areas of your business.
- Often you cannot afford the expertise in-house or there is a scarcity of the required resource. As said above, technology is cutting across borders making it possible to outsource on a global basis.
- It helps to level the playing fields for small businesses versus the larger corporates who have substantially more in-house support services.
- It should help to reduce risk across your company which is now partly assumed by the entity you outsource to.
How to outsource successfully
Be mindful of any legal requirements that may arise from outsourcing such as how to treat confidential information.
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