7 Must-Know Tips for Outsourcing Your Business

As an entrepreneur, you are probably more than familiar with having to juggle everything at the same time. Overseeing payroll, human resources, special projects, advertising, etc. – it can easily become costly and overwhelming. In an effort to save both time and money, however, many businesses outsource certain tasks.

For example, if your company’s business deals with e-commerce, you may not need to pay someone on-staff to answer your phone. Instead, outsourcing to a call center may be a better move. Or maybe you don’t have a web designer on staff but you need one to redesign your website. Rather than looking to hire one, you can have the project outsourced to fulfill your temporary needs.

In both examples, outsourcing is beneficial because you are able to manage your resources and handle issues or operations that you don’t necessarily know how to do (or just don’t want to do), and in most cases, you can save money. However, not doing your research can cause you to lose money, have high turnover and stifle your growth. Your outsourcing success rate really depends on your type of business, the quality of the provider, and the services you choose. If you observe the following tips, though, you can start heading in the right direction.

1. Determine Your Needs

Identify the work that isn’t a part of your core mission of business and then consider the following:

• Can someone external to your company do the work better than you can?
• Will outsourcing save you money?
• Will outsourcing enable you to put more of your resources and focus elsewhere?

Careful consideration of this step is vital to your success. If you are unable to be clear about what your needs are, how will you articulate those needs to an outsourcer? Again, make sure the work you outsource doesn’t entail lots of oversight, because if it does, it might have been better to just handle the job in-house.

2. Be Picky

When picking an outsourcer, request to see their previous work before you make a decision about whether or not to hire them. Are they fully equipped to handle the job? Say you outsourced your web design – do the designers have wireless Internet cards for their laptops if they suddenly have to travel during the work week? Are they available through email, phone, and several other means? A bad decision at this stage can cost you money down the line and compromise your entire operation.

Also, if they can’t show you something tangible for a previous work sample (if you’re outsourcing to a call center, for example), be sure to get some references. It also might be a good idea to check out their page at the Better Business Bureau.

3. Take One Project at a Time

So you identify a vendor and are presented with a two-year contract. Not so fast! Don’t sign any long-term contracts until you’ve seen that this provider has had success on smaller projects. If possible, test the outsourcer first by giving them a comparatively small task to accomplish. Their ability to handle this project well will prove whether they are a good match in the long run.

4. Brace Yourself for Challenges

As great as it would be to immediately hit the ground running with your new provider, realistically it will take some time to synchronize operations and build a professional relationship. In order for outsourcing to work, you and your staff are going to need to be patient and prepared for small missteps that may happen in the beginning. For example, if your provider is off-shore, there will be time-zone differences that can hamper proper communication. Setting up a realistic schedule that meets your needs may take some practice. If all parties are invested, though, a little practice and management of expectations will sort things out.

5. Be Aware of the Full Costs

Many companies outsource to save money, but outsourcing can get pricey too. Are your outsourcing projects going to require you to employ telecommuters or freelance staff who work remotely? If so, this could be costly depending on where the workers are based. What about equipment? Do the outsourcers have their own or are your fronting the bill? Make sure to get as much information as possible about the total costs – before it’s too late.

6. Are Your Expectations the Same?

Are all involved parties clear about what the end result should be? Miscommunication about benchmarks can cause a maelstrom of issues. Be clear about communicating what success looks like as well as when you expect to get there. If possible, provide the outsourcers with a concrete example of what you’d like their finished product to look like. For instance, perhaps you are outsourcing the redesign of your site. Is the vendor up to speed with the latest content management systems and development software? You should know what capabilities you want your site to have and ensure that your provider has already been able to provide that level of quality to other clients before giving them the job.

7. Prepare for Cultural Differences

If you are outsourcing abroad, you definitely need to be aware of the cultural differences that will arise. Outsourcing your calls, for example, would mean your provider would need to be attuned to the cultural and social customs of your business. If you’re outsourcing web design, you’ll want to make sure that the language your provider will be using fits your demographic. Customers are very observant and can tell very quickly if the message they are reading is of a low quality or poorly translated.

It is no secret that outsourcing has become the strategy of choice of the majority of American businesses. In 2008 alone, almost half of U.S. businesses took part in off-shore outsourcing. With some research and deliberation, outsourcing can be a valuable alternative for you too.

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