Is Outsourcing Work Right for Your Growing Business?

If you’re considering outsourcing work, chances are business is booming. But it may also be overwhelming. Outsourcing can help you:

• Put time back in your day
• Focus on growing your business
• Shift tedious, time-consuming, or complex tasks to the right people
• Enjoy the parts of your job that you love

But when should you start outsourcing? What types of work should get outsourced? In this blog post, we’ll show you how outsourcing can be beneficial to your business and set you up to maximize those benefits.

5 Signs You’re Ready to Start Outsourcing Work

If you haven’t outsourced work yet, you might not know where to start—or even if you should. But there are signs that tell you it’s time to consider some outside help. Here are five you should look out for:

1. You Regularly Run out of Time in Your Day

Are you scrambling at the end of each day, constantly pushing tasks to tomorrow’s to-do list? Or damaging the business by bottlenecking projects or payments? You’re adding unnecessary stress to your already busy life and not maximizing your productivity in the hours you put in.

2. You’re Putting Off Tasks You Hate

You might not be a numbers person, but when you were starting out, you needed to do the finances yourself. Now your business is bigger. Managing the finances is tougher but more important than ever. Putting them off can leave your business at a standstill and force your team or your clients to chase you (when you should be there for them). If the tasks you hate are getting left for last or putting pressure on your team, it’s time to share the load.

3. Mistakes Are Being Made

A missed deadline, an error on a spreadsheet, or a botched conversation with a client can have a serious impact on your business. If you’re pushing things off, working slowly on tasks you dislike, or burning out from overwork, mistakes are that much more likely.

4. You Need a Better Fit for Specific Tasks

As a one-person show, it was easy to manage finances, sales, marketing, and execution. But now that your business is larger, its needs are much more complex. And there’s so much more to get done. To keep your growth on track, these challenges require deeper, specialized expertise to solve.

5. You’re Turning Down Great New Projects

When new projects and opportunities arise, are you filled with excitement—or disappointment, because you can’t take them on? If you’re turning down work because you don’t have time to manage new projects or clients or because your team is burnt out, it’s time to add additional resources.

Why You Should Consider Outsourcing Work

Know the signs? Then it’s time to start thinking about outsourcing and what you’re hoping to get out of it. Here are five ways outsourcing can help your business:

1. Increase Productivity and Profitability

Hiring an outside specialist can free you and your team up so you can focus on your core competencies. If your tech-savvy lead designer is your de facto IT support, you’re not getting the most out of their skill set. Nor are your clients. When the right people are doing the right work, the quality of work improves, projects get done faster, and more time is available for work that directly impacts the bottom line.

2. Give Your Team the Gift of Time

Offloading frustrating tasks can reignite your—and your team’s—ability to take on bigger, more complex business challenges. If you love business development, but you’re spending most of your time staring at spreadsheets, you’re not doing what’s best for the business. Hiring a dedicated expert in finance/accounting, human resources or marketing can free you up to put more time toward the parts of the business you love.

3. Control Costs

Errors caused by burnt-out team members are costly—and unpredictable. Hiring a freelancer or agency has a cost, too, of course. But that’s a controlled cost. Controlled costs are more manageable than unknown costs, like the costs that come from mistakes or reduced productivity.

4. Test out Potential New Hires

As your business grows, the need for more specialized roles grows as well. Your first instinct might be to hire someone full-time. Outsourcing allows you to get a firsthand look at what your business looks like with someone taking on that role—without the overhead of a full-time hire.

5. Tackle Bigger Projects and Exciting Opportunities

A new project means additional revenue. But having an increased capacity to take on work can shift a lot of things for your business. Big, complex projects give everyone a chance to flex into new skills. Then there are the creative projects: the interesting ones that ignite and inspire your team. More projects can also open up new markets and networking opportunities while leading to greater revenue-generating opportunities down the road.

Types of Work You Can Outsource

Every business is different and has different needs. A few common areas that businesses your size outsource include the following:

• Human resources (HR), including payroll
• Information technology (IT), including internal (managing your team’s computers and email) and external (website or app development)
• Marketing and advertising, including branding, copywriting, design, paid media, and social media
• Finance and accounting to manage invoicing and accounts receivable
• Call center operations, including customer support
• Project management to keep large and/or new projects on track

Understanding the Costs of Outsourcing Work

There are several factors that go into the costs of outsourced work:

• Freelancer or agency: Agencies will be more expensive, but may offer more resources. Freelancers are less expensive, but might not have the same bandwidth.
• The type of work being outsourced: Specialized skills, like a mobile app developer familiar with Swift programming language, will be more expensive. Highly commoditized work, such as a designer familiar with PowerPoint templates, will be less so.
• The level of experience required: A part-time CFO will be more expensive than a standard accountant.
• The location of the contractor: Freelancers based in non-Western countries may offer lower rates, depending on the value of the dollar there.

How to Calculate the Return on Investment for Outsourcing Work

Calculating the return on investment (ROI) for outsourcing requires the same rigor as it does for any area of your business:

• Understand the cost to your business if you remain in the current state: Factor in how much stress, mistakes, missed deadlines or turning down work are costing your company. Consider as well that top employees may leave if they’re burnt out or not working on the right projects.
• Understand the options available to you and their costs: Calculate the hard costs of outsourcing as opposed to hiring a full-time resource or hiring a freelancer versus an agency, and make sure you can afford it.
• Factor in any hidden costs: Outsourcing does take time in terms of sourcing the resources, managing them, and reviewing their work. You, or a team member, must have the bandwidth.
• Clearly define your goals and desired outcomes: To realize the benefits of the additional resources, make sure you know why you’re hiring them. Do you want more accurate accounting, improved marketing results, or more clients?
• Determine the metrics used to measure success: Once you define your goals, make sure you can track and report against them. Establish baselines for things like revenue, website traffic, or leads acquired, and measure them over time.
• Regularly review results: Take the time to look at the results and ensure that you’re getting value and/or adjust your approach as needed.

One last thing to consider: Depending on the type of individual or agency you hire, you may have different legal obligations when it comes to contracts and payments.

Always have a contract in place with a freelancer, contractor or agency that clearly sets out the scope of work. It should also detail expectations such as payment terms, status meetings, use/return of materials, and so on.

Right Now Is the Ideal Time to Outsource Work

Your business is at the right stage to outsource work: Too large to have two or three people managing everything, yet still scaling and not yet ready to hire a large number of full-time staff.

You and your team can’t do everything. Outsourcing parts of your business or specific project work can relieve stress and free up valuable time, which can, in turn, make your business more efficient and more profitable.

This post was updated in March 2020.