When Does Outsourcing Make Sense?

by Debi Enders

Small business owners are accustomed to “doing it all.” A National Retail Federation survey1 found 82% of small business owners manage their own recruiting, 74% handle marketing and advertising, and 72% tackle benefits management.

To grow a business, however, it sometimes makes better sense to outsource these and other services. Here are some reasons why:

1) To cut costs - Outsourcing not only frees up your and your staff’s time, it can also save money. By contracting bookkeeping, marketing, payroll, or other project-specific work, you only pay for the services you need, resulting in lower overhead and staff labor costs.

2) To tap high-caliber talent - If your small business is like most, you cannot afford a seasoned staff of finance, legal, HR and other experts. But when significant issues in these areas arise, you want professionals with the skills needed to manage them. Outsourcing provides the flexibility to expand your team temporarily for tough challenges or out-of-the-ordinary needs.

3) To provide technology support - In-house IT departments require continuous training and equipment upgrades to stay abreast of the latest security threats and technology challenges. That’s why most small businesses benefit by outsourcing IT support, with the level of support scaled to meet current demand.

4) To improve customer service - Some businesses benefit from outsourcing customer service staff. A third-party call center may be able to provide more language options, extended after-hour and weekend support, shorter response times, and better technology.

5) To Increase efficiency - Outsourcing doesn’t need to be limited to staffing gaps or weaknesses. It can also be used to strengthen areas of expertise. Outside engineers might bring the fresh perspective needed to streamline a process or supply chain, helping to boost productivity.

The bottom line: Outsourcing can both help improve operations and allow you more time to focus on your core business, which is key for long-term growth.

1 When Should Small Business Owners Stop “Doing it All”? (2016). Retrieved from http://www.coadvantage.com/small-business-owners-stop

Debi Enders (debi.enders@commercebank.com) is vice president, small business banking at Commerce Bank.