Every business owner should ask themselves these two important questions:
What does your business do and how many of your employees are focussed on what you do and actually make money?
You would be surprised how many businesses realise that the majority of their employees are costing more money than they make and only do non-core business tasks, such as accounting or administrative activities.
Outsourcing is one way to get your focus back and run your business in a smarter way.
Outsourcing has become common practice in most areas of business and this trend is only expected to grow in the future. This has been especially true during the last couple of months with the Coronavirus lockdown financially challenging businesses, as some had to rely on outsourcing for survival. It has allowed them to entirely focus on their core business activities and making profit while the less important tasks were taken care of by external specialists.
So naturally, as a business owner, you will start questioning whether your company could also benefit from such practices. This article will help you make up your mind by covering the why’s and how’s of outsourcing.
Why do companies outsource?
There are quite a few pros of outsourcing. These are some of the main benefits:
- To focus on core business – You and your employees should be entirely focused on the core business activities that work towards scaling the business and making profit.
Handing over the non-core tasks to external specialists means that all employees directly involved with your business are working on what your business actually does.
- To save time – The saying time is money has never been more true. The long hours you spend on trying to figure out double-entry bookkeeping could be used to maximise your business opportunities and actually make money.
- To access a larger talent pool – Outsourcing does not restrict hiring based on your geographic location,so you are able to choose from a large number of specialists. This is especially great if you do a variety of projects and need people with different skills for each of them.
Outsourcing allows you to hire on demand, therefore only when you need a certain task to be done.
- To employ fewer people – Employing and managing workers is one of the biggest expenses in every business. Outsourcing can save you recruitment costs, sick and holiday pay, maternity and paternity pay, NI contributions, pension contributions, pay for non-productive employee time, office desk space and so on.
- To reduce costs – Besides the costs of managing employees there are many other overheads that can be reduced with the help of outsourcing.
For example, outsourcing accounting activities to a specialised company means that you don’t need to pay for your own payroll and accounting softwares, licenses, IT support, etc. The same goes for marketing, human resources and many others.
Areas you can outsource
Depending on the nature or the size of your business, there are a variety of areas you can outsource. Here are some of the most common ones:
- Digital Marketing – From social media management to content strategy, if you don’t have the time or skill to do it – outsource it. There are many agencies or freelancers who specialise in SEO, content writing, social media and so on. Outsourcing this will likely be more time and cost efficient as well as far more effective.
- Graphic Design – If you find yourself in need of new branding, don’t spend hours trying to figure out Photoshop. There are creative specialists who are skilled enough to do the job fastly and professionally.
- Human Resources – Outsourcing employee acquisition and HRM is quite common in companies. A lot of the time businesses don’t have the time, resources or skilled staff when hiring new employees. An external agency will have all that and more, finding you the most suitable candidates and increasing the quality of hire.
- Inventory Management – Not enough stock can result in lost sales but too much of it can cause cash flow issues and affect sales prices. Outsourcing inventory management can help you minimise stock-carrying costs and allow you to focus on more important things.
- IT Operations – Managing IT operations in-house can be extremely expensive and most businesses have limited knowledge of this area. So, unless you’re an IT company, this is more of a maintenance and repair function than it is a core business activity. Therefore, outsourcing your IT operations is a no-brainer.
- Accounting and Payroll – Although many people try to manage bookkeeping themselves, it is better left for professionals. Not only will an accounting company manage your books and payroll with professional softwares and no mistakes but they will also offer you financial reporting, analysis and planning.
- Administrative Tasks – Travel arrangements, data entry, scheduling and many other administrative tasks are likely taking up a lot of your time and energy. While these tasks are crucial for the overall operations of your business, they are not the core activity and therefore can be outsourced to a virtual assistant or administrative services.
Ready to outsource?
If you feel like your business could benefit from outsourcing, accounting and payroll is a good place to start. At ASfB we are always ready to take over your books with our professional Virtual Accounts Office. We are also happy to provide you with any financial or business advice based on your individual needs.
If you would like to discuss this further, call our friendly team on 01202 755600 or drop an email to hello@asfb.co.uk.