Feature: How outsourcing can support SMB growth plans

Wednesday 1 May 2013

By nature, small and medium-sized business (SMB) owners tend to be talented multi-taskers - people who are able to turn their hand to a variety of tasks. When you are setting up your own company there may be nobody else to delegate tasks to, and as such, entrepreneurs find themselves conducting all admin, finance, product development, marketing and sales tasks. While this enables the business founder to shape the enterprise as they see fit, it creates a number of practical issues.

Firstly, the SMB owner is likely to spread themselves too thinly. Rather than focusing on key areas - such as creating a great product and/or service, and marketing it to consumers - they can easily get bogged down with other menial tasks. It can be very difficult not to get distracted when you are responsible for everything going on within the company, and have so much riding on its success.

Secondly, the SMB boss cannot be expected to have expertise in each area - and this creates risk for the new company. Should they make mistakes through a lack of time, knowledge and experience, it could have negative repurcussions on the business as a whole. And in simple terms, taking too much on creates a greater risk of burn-out - and if the business leader does not have the energy to get up and fight for company growth every day, the chances of failure increase significantly.

Outsourcing can help reduce business costs

So what should SMB bosses be doing to give their companies the best possible chance of success? According to Chris Burgess, chief executive officer at Mailplus, it is important to know when assistance is required. This does not necessarily mean taking on new staff members, as not every SMB can afford many, if any, employees at first, But firms should consider whether some functions can be outsourced to a third-party specialist.

Writing for Under30CEO, Mr Burgess claimed that outsourcing is one of the most effective ways to get things done in an SMB. And not only does it ensure that tasks are completed to the required standard in the set timeframe, but it also enables small companies to reduce business costs.

"When running an SMB, keeping your overheads low is the key to success. It maximises your profits and keeps you competitive in the marketplace," Mr Burgess stated. "If you have more money in the bank, it’s easier to get a loan, you can ride out the slower periods, and crucially, you can invest in and grow the company. The most effective way to do this is to outsource activities that fall outside your core business competencies."

He said that the majority of SMBs wisely choose to avoid the DIY approach in specialist areas - such as accounting, marketing and law. "Outsourcing these will help you to get through them more quickly, efficiently, usually better, and often more cheaply than if you had engaged in-house staff," he told the news provider. "It gives you and your staff more time to focus on the things that matter most to your business."

Keeping things simple in the office

Another reason to outsource business tasks is that it de-clutters the workplace, Mr Burgess claimed. "Imagine working in an office where mail, parcels and packages aren’t piling up while your support staff is tied up on other responsibilities," he stated. "Not only that, it helps to reduce floor space demands – providing significant cost savings in a time when rents continue to rise and profit margins are being squeezed."

Essentially, by enlisting the support of third-party providers - whether for technology support, advice, or professional expertise - SMBs can ensure jobs are done to the required standard, while their own employees are freed up to concentrate on value-adding tasks. The narrower the range of daily responsibilities held by SMB owners and employees, the greater the likelihood that they are able to work efficiently and productivity. This may have a positive impact on overall output and profitability for the enterprise.

Mr Burgess said that if a job does not tie in directly with a company's core area of business, there may be a case for outsourcing as soon as it is feasible. "It’s the best and quickest way to get ahead, allowing you to maximise the time you can devote to refining the core competencies that will make your business stand out above your competition," he claimed. And in an increasingly competitive environment for SMBs, this could prove to be a key differentiator for many businesses.

Find out how outsourcing business functions to the cloud can help your business experience growth.

Posted by Steve Williams