Outsourcing Tips For Your Small Business

The following is a guest blog post:

Running a small business requires that you maximize on the income and minimize the expenditure. While you can seek help at fundraising sites, one of the ways to achieve this is to outsource some function so you can keep your workforce lean.

Outsourcing should link you with skilled external service providers yet be cost effective. Here are outsourcing tips to keep in mind when choose a business right partner.

 

1. Make your Expectations Clear

Give the service provider as much information as possible regarding the scope of the task. List down what you want to be done, how it should be done and the available timelines. This allows the service provider to give you a realistic proposal and an accurate price quote.

 

2. Interview the Providers

Outsourcing should give you value for money just as your employees. For this reason, you must take time to evaluate the proposals presented to you.

Check their references and testimonials from clients they’ve previously served. While at it, avoid rushing to pick the vendor with the lowest price.

Cheap can turn out to be very expensive. A very high quote does not guarantee quality services either. Aim for quality results at a reasonable price.

 

3. Start with a Small Project

If you’re outsourcing or dealing with a particular service provider for the first time, start with a limited scope of work to see the quality of work. Outsourcing a large project at this stage can end up disappointing and affecting other areas of your business.

You might be lucky to land on a service provider who can provide a rough sample of the work upfront.

For instance, if you’re dealing with a web designer, you may get one willing to design a prototype for free. This should not be exploited; every service provider deserves a full payment for work done.

 

4. Define Payment Terms

This area can be a major source of stress if not defined properly. Ensure that you tie the payment to definite milestones. For instance, if you’re outsourcing a marketing project, payment can be made in installments according to a number of sales achieved.

This excludes the 20 to 30% down payment which is the standard business procedure. This will motivate the service provider to strive to achieve the goals and ensure that you get the desired results.

 

5. Agree on Copyright

The ownership of the finished product should be made clear from the beginning. For instance, if you outsource the development of software to handle your payroll, can the developer then sell it to other businesses? Refer to the patent laws of your state in necessary.

 

6. Support might be Necessary

Once the product is handed to you, can you maintain it all by yourself? Whether it is a website, software or dental credit card processing system, you might need the developer to check on the system periodically.

You can agree on a maintenance rate so that you can have someone on call in case of any problems. Alternatively, you can have the developer train your staff on maintenance.

Remember to keep every detail of this deal in writing. Have a comprehensive contract that you can always refer to in case of disagreements. If there are any changes along the way, communicate them in writing as well.

Business outsourcing should ensure that you get access to top-notch skills in any sector without having to hire full-time staff. This allows you to keep your expenses low. You can then concentrate on the core mandate of offering services to your clients.

You do not have to get distracted by every small project that requires being attended to; let the experts attend to it so you can handle what really matters.

8 thoughts on “Outsourcing Tips For Your Small Business

  1. Good idea, there are plenty of websites that can do this sort of work or find you people to connect with others. I agree that outsourcing is an important part of any business these days. I work with large contractors and they do similar things, by getting sub contractors to do the work where they can’t.
    Thanks for the info. All the best.

    • Hi BHL,

      I know the value of outsourcing certain tasks as I have done it multiple times while running my own business. Sometimes it’s more cost effective to outsource certain tasks that you know will not be repetitive. This way you can incur a one time charge, get the job done and move on. It’s certainly cheaper than hiring a full time employee. Thank you for commenting.

  2. Thanks for sharing this guest post. I’ve been experimenting with some outsourcing for one of my businesses and it has definitely been a learning curve – I wish I read this a few weeks ago! 🙂

    I think starting with small projects is a great tip to test people out and minimize your risk.
    Jay recently posted…Top 5 Rookie Mistakes For Trend TradingMy Profile

    • Hi Jay,

      Outsourcing can be a great boon for any small business but all projects must be vetted somehow before committing serious time and capital. Of course, it’s best to go slow and learn as much as you can before a project gets the green light and, as you mentioned, there is a learning curve. Thank you for stopping by and commenting.

    • Hi DFG,

      Being in the software industry I would imagine that you know all too well the costs and benefits of outsourcing. As I commented above, all projects must be vetted somehow before committing serious time and capital as best you can. Otherwise you might end up with an inferior product, or in your case software full of bugs. I’m sure that any reputable individual or agency would happily fix any mistakes or bugs for free to keep their name in good standing for potential future outsourced projects. Thank you for sharing your own experiences.

    • Hi MSM,

      You said it best. That’s exactly how I have been running my business since we started in 1998. Focus on what you know best, on your core competency and outsource everything on an ‘as needed’ basis. It’s much cheaper than hiring a full time person which is a great benefit for any start up while giving you the flexibility to add or remove resources for certain projects that are not in your wheelhouse. As always, I appreciate your thoughts.

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