Know What to Outsource and When to Do It

We’ve all heard the cliches about how big business tends to outsource jobs and tasks overseas or to independent contractors instead of investing in creating jobs. But what about when you’re a small business (such as a MOM franchise owner) who is working under different budgetary and financial constraints?

While having a strong team is paramount to your company’s success, sometime you need support or expertise that you just don’t have on hand. On the other hand, every time you outsource something, you might have to spend a bit more and you can never be sure about the quality of that work and the value you’re going to get for the money you’re spending.

Of course, a big part of running a franchise or any business is understanding that different circumstances call for different solutions. And when it comes to deciding whether to outsource something (to rely on a full- or part-time employee) there are seven questions you can ask yourself to help make sure that you make the right call for the situation that you’re actually in.

1. What is your company’s core business?

First off, it’s important to establish what your core business is. Your main product line or service offerings should be the last thing you outsource. It’s what you’re known for and what your customers expect from you.

For example, it’s well known that many of history’s most celebrated painters employed a team of sous-artists to work on minor details and to generally expedite the tedious process of completing a massive work of art. That being said, it’s understood that the Leonardos and the Monets of the world were the driving forces behind their works, and the majority of their artwork, or at least the most important parts of their work, was created and produced by the master artists themselves.

If you were to buy a piece of art from a renowned artist only to find out that the artist had simply done a rough sketch of the picture, leaving his team to paint the entire thing by number, you’d feel pretty jilted. Regardless of how well the team accomplished the work, the work suddenly loses much of its value, and you’re left with a collaboration piece from several no-name artists.

It’s the same in any business: if you put your name on it, your customers are going to expect you to have put your heart (and brand) into it, as well.

2. Does Keeping the Work In-House Offer a Competitive Advantage?

This goes hand in hand with the point above. Whereas you probably should keep your core business inhouse, there are aspect of your business that your team might not specialize in, and that you’d be better off outsourcing.

For instance, do you really need to hire an accountant or an IT maintenance person who’s probably only going to be needed once every few weeks? Many business needs are cyclical, and you may not need to keep a person on hand to fulfill them if they only arises once a month, once a quarter, or once a year.

3. What’s the Opportunity Cost?

Even if it isn’t part of your core business, you might want to keep everything in house. But watch out! Even if your staff is more than capable of taking on whatever task you throw at them, you must still consider just how much time it’ll take away from them doing what they should really be focussing on. After all, any time they’re working on a side task is time they could potentially be using to do, you know, that thing you hired them to do.

Say you’re running a marketing agency and you’ve got a print ad that needs copywriting. While your project manager might have a background in writing, is the time spent taking them away from their main job actually worth the money you’re saving by not hiring a professional? Even if it is, what kind of guarantee do you have that the work is being done well? With a freelancer, you know you’re hiring a specialist, plus your employees can focus on what they specialize in.

4. How Urgent is It?

A big reason to consider outsourcing tasks is urgency. Indeed, urgency is it’s own kind of opportunity cost altogether. If something is urgent, the opportunity cost of trying to do it in-house often means pulling resources off of other jobs that will then become urgent as they pile up.

Instead of rushing a project and leaving yourself open to costly mistakes, you’ll want to consider outsourcing at least parts of your project to freelancers who can collaborate to finish the job quicker, and on time. Of course, you shouldn’t be outsourcing to the point that your employees are working far below their respective capacities, but a couple more helping hands is always beneficial to making sure a job is completed on time, and done as efficiently as possible.

5. Who’s in Your Network?

Chances are if you’re in business, you have a network of contacts and connections who possess skills that your team might not necessarily have. You may find it easier to work with a familiar faces that you both know and trust than to try to foster those expertise in-house. Indeed, businesses often work with a specific set of freelancers who act as a sort of extended family than just a supplier or service provider.

For instance, apparel companies often employ in-house designers, but in the spirit of always providing customers with particularly unique design, they will outsource the design of certain items to specific designers who they trust to deliver both results and a fresh perspective. This way, these companies don’t have to keep an army number of designers on their payroll, but can still work with talented designers they can trust to understand (and interpret) their brand.

6. What Are the Training Costs and Learning Curves?

Fresh out of school, the expectation for recent graduates is that their first job is largely a learning experience. Recent graduates aren’t expected to jump out of the gate knowing everything there is to know about their particular field of expertise, and it’s up to their employer to cultivate their abilities and refine their skills.

Of course, your company shouldn’t put your biggest project solely in the hands of your least experienced employees and expect them to learn via trial by fire. Similarly, you don’t want to tie up most of your operational budget in constant training. After all, not only do you have to pay someone to train a recent hire, but that recent hire is not very productive during the training process (which can last for months).

7. Is it Making You Money?

Many of your business’ vital day-to-day tasks aren’t necessarily things that bring revenue to your company. Managing your payroll, balancing your books, or (ahem) cleaning your office are all things that need to be done, but they are also costs instead of sources of revenue, and to that extent, they’re not really part of your “core business” (see above). To that extent, you might be better off handing them off to a third party rather than investing in the resources to handle them yourself.

Keeping Costs in Perspective

At the end of the day, it all comes down to a question of finding the best people for the right job, and finding business solutions that aren’t costing your company more money than they can make you. No one knows your company’s strengths better than you do, so it’s important to reflect upon your staff’s abilities and find way to fill the gaps in your core competencies. While outsourcing everything can be be incredibly costly, chances are you can find someone to take care of most of your company’s non-vital business operations in a way that will actually save you money in the long-run.

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