When Should You Outsource? Four Signs It’s Time
Outsourcing certain operations and services can give freelancers, small business owners, and large companies a competitive advantage otherwise unobtainable. Whether large or small, successful business owners all share a pearl of common wisdom and passion for success. An essential attribute that contributes to their success comes from knowing when to say yes and when to say no.
When Should You Outsource?
As with your home life, you must be picky about what you devote your business’ time, energy, and resources to in order to maintain and propel the success you have built.
Knowing when to say yes and when to say no can be just as liberating and beneficial in our personal lives as it is in our businesses. We use the word liberating because both affirmations and negations bring about freedom in their own unique ways.
At home, saying no to the local boy scout troop asking you to volunteer as scout leader because you already have other obligations is liberating.
Had you said yes, then you would have added yet another task and responsibility to your plate that would have taken away what little free time you have to spend with your family.
This reasoning is also important when choosing to outsource.
Four Signs It’s Time to Outsource
Here are four signs that it’s time for you to take the competitive step of outsourcing.
- Your expenditures are out of control
- You see a reduction in innovation and product development
- Your innovation has outpaced capacity
- Your attrition outpaces retention
Your Expenditures Are Out of Control
The first and most common sign that your company needs to outsource comes with the need to control expenditures and maximize profits. As a business owner, you know, perhaps more than anyone in your company, how important it is to be prudent with where and how you spend your company’s resources. To do otherwise would be fatal to your longevity and success.
There are a variety of reasons that you need to cut or reallocate costs in your business. Perhaps you have discovered a need to invest more capital into research and development to further innovate your product, or you need to offer enhanced benefits packages to retain key employees, or you need to reduce spending overall to build up your rainy day accounts due to an unpleasant marketing forecast in your industry.
Whatever the reason may be, the quickest and most efficient way to accomplish this goal without sacrificing your core principles and competencies is to choose a trusted partner to outsource your secondary needs, such as customer service, IT development and maintenance, or product fulfillment.
You know better than anyone what the strengths of your company are, and you also know what the weaknesses are. Together with your team, identify those areas of your company that do not directly correlate with your core purpose or product, and then choose which services or operations could be improved by outsourcing to a company that specializes in those specific niches.
By doing so, the benefits are two-fold. You reduce costs and strain on your company and staff, and you enhance that area of your business which can have a positive effect on the satisfaction of your customers.
You See a Reduction in Innovation and Product Development
It may be time to outsource if you are seeing a reduction in your company’s innovation and product development. If it seems the success of your company, fueled in part by your breakthrough products, has begun to slow or even reverse course, it may be a sign that you have strayed away from your core competency. If this is you and your company, then it may be time to look at outsourcing.
When you first built your business from the dream up, you probably never would have imagined the success it would be. What were once mere ideas in your mind are now a tangible force to be reckoned with. Once your ideas became a reality and hit the market, your company exploded, but now things have tapered off. Your new customer statistics are dropping, repeat customers are dropping, and your products are collecting dust.
All of these unfortunate circumstances may point to a lack of innovation caused by distracted attention. If you are not able to focus your skills and talents on enhancing your core product because you are distracted by back-end processes such as those mentioned above, your ability to create becomes stifled. In essence, you have exercised poor judgment on what you have said yes to and what you have said no to.
In this example, it may be time to start saying yes to innovation and no to mundane back-end tasks. The answer? Outsourcing.
Your Innovation Has Outpaced Capacity
Instead of seeing your sales and customer retention slow, you have seen them explode, and you cannot contain the explosion. As a result, you are missing shipping deadlines, fulfillment deadlines, or some of your products are leaving the warehouse with defects, incomplete packing, or wrong orders.
As you know all too well, implementing mitigation controls can be costly and time-consuming. Hiring new employees, expanding your operations, purchasing new facilities, and increasing your digital marketplace capacity takes time and money, but you don’t want to lose the momentum of your success, and we get that.
Outsourcing these needs to a partner company that already has the infrastructure in place to accommodate your growth is the quick and affordable answer to this problem.
It is essential to your continued growth and success that you get a wrangle on these out-of-control proverbial horses and get them back in front of the cart. Customers will become displeased with unfulfilled orders, missed shipping dates, defective products, and poor customer experiences.
If you are not careful, this poor customer satisfaction can turn into a wildfire that has the potential of reducing your success to ashes. If this is you and your company, it may be a sign that it’s time to consider outsourcing.
Your Attrition Outpaces Retention
While your core competency may be what led to your success, it is your staff and employees that make the dream a reality. Without the various members of your team and company, your product would not make it from the farm to the table.
If a farmer were to grow a thousand acres of corn but had no one there to harvest it for the market, what good would it do anyone? It certainly won’t do any good for the farmer, and it won’t do any good for the people who want to buy corn to go with their summer steaks.
We know the metaphor may be a little corny (sorry, we had to), but you get the picture. If you don’t have good people working for you to develop, produce, and deliver what makes your company successful, it won’t matter how great your product is or how strongly it is desired.
With over 11 million job vacancies in the U.S. and not enough workers to fill those positions, it is more important than ever that you retain your key employees.
Good employees know that you cannot hand them the world on a platter, but they do want to feel appreciated, heard, and happy. When you assign more and more tasks to your team, it creates a workload that is difficult to maintain or excel at, and they will eventually become dissatisfied with their jobs, stressed, and feel like failures.
These sentiments will undoubtedly follow them home, where they can have an effect on their home live as well. This will inevitably lead to them seeking employment elsewhere, and the search won’t be difficult in the current job market.
Happy and appreciated workers are less likely to leave or look for employment elsewhere; it is as simple as that. If you have been observing staffing shortages, high attrition rates, poor job performance, or low workplace morale, it may be a sign that you need to outsource some operations or services that your employees are responsible for.
By doing this, you will offload some of their stress and give them the space to focus on being productive at their core tasks.
Trust Your Instinct: You’ll Know When to Outsource
These four signs that it may be time for you to choose outsourcing are not all-inclusive, and there are numerous reasons or signs that may indicate that now is the time for you to seriously consider it. We know that you did not land here by mistake. While we are not mind-readers, we are experts at outsourcing, so you have come to the right place.
Webster-Merriam defines instinct as having a natural or inherent aptitude, impulse, or capacity. Trust the instinct that is telling you that it is time to make a change and consider outsourcing whatever area of your business that is causing you issues.
Create the space you and your company need to innovate your why or the core competencies of your business and products. Your why is the passion and motivation for your what, and your what is the product you create and deliver for your customers and clients.
At AwesomeOS, we specialize in partnering with you and your company’s needs in the areas of the total customer experience and digital marketplace. We are a dedicated team-focused partner committed to enhancing and replicating your company’s culture to ensure your customers receive the same consistent attention they deserve.
We are excited to join you on your journey to amplify your “why” and innovate your “what.” Contact us today to begin your adventure and gain a competitive edge in your industry.