Outsourcing presents a common question for business owners to consider. The question of “to outsource or not” can take time and energy away from entrepreneurs. You need the right understanding and in order to make a proper decision. The ultimate decision you make will redefine your business.
You can increase the innovation of your business only when you have the time on your hands. There’s no better option than to start outsourcing for some of your work. Others might find that their businesses haven’t quite grown to a place where there should be sending core responsibilities to others.
The guide below is to help you to decide where in the decision matrix you fall. The evaluation can be made once you understand the most important reasons for outsourcing. You have to identify your strengths and weaknesses. You must then calculate your costs for outsourcing versus your revenue.
The final decision will improve your business and whether you decide to outsource or not.
1. Outsourcing: Scalability
Scalability is a business and financial concept that works on growth. When something is scalable, it means that results either stay the same or increase while the work/labor decreases. The reason for you to consider outsourcing has to do with scalability. You might not be able to outsource at this moment.
Learning more about how outsourcing works will get you prepared and will improve your undertaking as you share labor with others. The main concept to get with scalability is progress. Every business needs to reach higher levels of performance. Improving your results isn’t just about money.
Scalability makes life easier for you but without taking anything away from your business processes.
2. Outsourcing: Core Competency And Intellectual Property
Every business has core competencies. Your core competencies will depend on your profession, your industry and the niche you hold within it. The core needs of a painter, for example, is to consistently paint. This can’t be outsourced as an artist’s design or creation holds value with its originality.
These are the types of core competencies that no business wants to share with others. A chef might, as another example, be concerned with their recipes and who learns them. These are cases where you don’t want to outsource and certainly not to just anybody.
Another thing to consider are the patents and copyrights you retain as a business owner. Protect yourself from losing many years of hard work and by first limiting the work you offer to others. This will keep you from mismanaging the core concepts that are most important to you.
3. Outsourcing: Alliances And Mentoring
There are many people in this world who have tremendous talents. These people also bring qualities to your business that you wouldn’t have the life experiences to do yourself. Building alliances with local businesses or those that supply you with resources can bring down costs and helps to get many of your projects outsourced.
You can build these alliances by offering mentorship to potential leads in your market. You have a wealth of knowledge in this moment that can be put to use in a variety of ways. People are often helpful, but you need to offer them something in return. When you provide them with education, you won’t have to pay for labor.
4. Outsourcing: Decision Making
The final decision you are to make needs to be based on a matrix of some sort.
You need to put your options into a formula that shows you the pros and cons of each outsourcing item. We begin making the final decision to outsource when the task in question improves business but requires the business owner to slow down if they had to constantly do it themselves.
The balance you strike is between the things you need, those you don’t, new tasks and the core values you hold within your market. This balance will lead you to rethink certain tasks that you thought were important and to discover other things you can do that will better impact your business.
Let’s Consider The Outsourcing Decision Matrix
The decision matrix being introduced takes into account three important areas when deciding on what, when and the whom in outsourcing.
5. Outsourcing: Strategy
Consider the strategic value you get if you outsource a certain task.
Every task you continue implementing but no longer do yourself leads to greater productivity. This concept will build your overall strategy as you add to and eliminate certain tasks. Scalability can only happen once you’ve struck the right balance between success and the work required to be successful.
You cannot effectively begin outsourcing until you understand this. Outsourcing isn’t about making life easier for you the business owner. Easiness can happen, but other things are more important. Consider the benefits of outsourcing when you want to create greater safety, more revenue and more time for innovation.
6. Outsourcing: Impact
Look at each task you’re already doing be they done every day, regularly or on occasion. Make a list of all of these responsibilities. Now, you have to make a serious analysis. Ask yourself questions that pertain to whether or not you really need the task. Then, eliminate everything you find unnecessary.
You want to then look at what you have left. Now, you want to decide which of these tasks can be outsourced. The criteria that guide you will be to take into account costs and your core competencies. Some things won’t get outsourced if costing you too much. So now is the time to consider every aspect.
Now Make Room For More Innovation!
Your ultimate goal as a business must be for innovation. Don’t think about outsourcing just as a way to do less. You want to instead free up your time, so you can create more innovation and solve more problems in the world. Business is competitive and forces you to use every resource you have.
Think only of innovation, and outsource only when it helps your business.
Here are a few things to consider when making that final decision:
Decide what your core competencies are.
Evaluate which tasks are most important.
Distinguish which tasks can be eliminated.
Find help, and use it as an outsource option.
Don’t outsource only as a way to make things easier.
Find areas in your business that you can scale.
Remain within your budget.
To protect yourself and business, remain willing to do every task you have.
Use the free time you earn as a way to create more innovation.