Advantages and Disadvantage of Outsourcing from your small Business
In the right context and deployed shrewdly, outsourcing can be a fantastic way for small business owners to improve efficiencies and bolster their company’s bottom line. But that doesn’t mean the practice isn’t without its disadvantages, too. Outsourcing isn’t right for every situation, and so you’ve got to think long and hard before investing time and energy in farming out work
“Master your strength, outsource your weakness” — Ryan Khan
To help you get started, here are 20 advantages and disadvantages of outsourcing from your small business.
Advantages of Outsourcing
1. You Get More Experts
Your core team might be fantastic at a few things, but nobody is perfect at everything. By outsourcing particular tasks, companies are often able to substantially improve performance by drawing on the niche skills of experts in certain fields.
2. Things Get Done Fast
One of the top reasons small businesses tend to outsource work is because it will get done quicker. If you’re working with a limited number of staff members, you can get things done a whole lot quicker bypassing time-consuming tasks on to freelancers or external agencies.
3. You’re able to Focus on What Matters
Another benefit of outsourcing tasks is enhanced freedom. Bypassing on supporting processes, you’ll be able to concentrate your skills on strengthening and improving the core processes that help make your business tick.
4. You Can Share Some Risk
One of the most important factors in any project is risk assessment and analysis. By outsourcing certain campaigns or processes to experts in their respective fields, you will benefit from their enhanced ability to plan and mitigate potential risks.
5. You Can Reduce Costs
As one might imagine, outsourcing piecemeal work is almost always going to be cheaper than hiring permanent full-time staff. Not only will you save time and money on recruitment, but your profit will also be extended than s to shorter overheads
6. You Can Work Around the Clock
One major benefit of outsourcing digital work overseas is the substantial differences you might encounter in terms of time zones and holidays. Although this can pose an initial hurdle logistically, once overcome it can effectively mean your business is running even while you’re fast asleep.
7. You Can Simplify Project Management
If you choose to outsource work via a wide range of specialist freelance websites and online services, you’re often provided dynamic and intuitive platforms that will help you to effectively manage what’s being done, when it’s due for submission and how it will be paid. Most of this can be automated, freeing up your time for more important work.
8. You Simplify Work Relationships
Quite a few small business teams are tight-knit groups of friends and family — which is fantastic. But when you’re incredibly close to your staff members, it can also lead to issues when work isn’t being done up to par. By outsourcing work, you’ll typically be able to minimize work relationships to simple, contractual arrangements.
9. Efforts Are More Targeted
Another overlooked advantage of outsourcing is that it enables you to plan and execute more effective, targeted campaigns and projects that you wouldn’t ordinarily be able to take on. This gives your business the chance to take new risks and experiment with different methods of exposure.
10. You Get Peace of Mind
At the end of the day, choosing to outsource with a reliable individual or agency should give you peace of mind that tasks are being handled expertly and efficiently without you having to worry or lift a finger. What could be better?
Disadvantages of Outsourcing
1. You Lose Some Control
As you might expect, when you farm works out to external agencies or freelancers, you’re losing control of how those tasks are being monitored and performed. So long as you know and trust who you’ve hired, that shouldn’t be a huge issue — but you’ve got to tread carefully.
2. There are Hidden Costs
Although outsourcing work is generally considered cheaper, you must also beware of getting ripped off. Outsourcing companies or big agencies will typically ask small business owners to sign lengthy contractual agreements, and they’ll include plenty of fine print. If you don’t read the terms carefully, you could get hit with unexpected costs.
3. There are Security Risks
In this age of data protection, you must exercise caution whenever using customer data. If you plan to outsource processes that require personal data, you could be placing the privacy of others or the security of your business at risk by passing that data on to other people.
4. You Reduce Quality Control
Outsourcing companies and some freelancers may often be motivated by profit rather than a job well done. That means the work you send out may come back quickly but will lack the standard and quality that customers have come to expect from your products or services.
5. You Share Financial Burdens
Although it can be nice to bring in expert agencies to share in risks, it can be pretty dangerous to tie your business to the financial well-being of another company. Again, you’ve got to spell out all terms and conditions in contractual arrangements plainly — because you don’t want to take a financial hit if they fail to deliver.
6. You Risk Public Backlash
If you’re taking work overseas (even just to write a blog or two), your business very well may run into ill will from consumers that have taken a moral stance against outsourcing. Right or wrong, for better or for worse, some form of criticism is often inevitable.
7. You Shift Time Frames
One major disadvantage of outsourcing particular tasks is the risk that your freelancers or partner agency may be marching to the beat of a different drum. As a result, it might be difficult to synchronize schedules to ensure your customers receive what’s promised to them on a reliable timeline.
8. You Can Lose Your Focus
Because many outsourcing agencies or freelancers tend to service multiple clients at any given time, the work you’re sending out may not be receiving the focus it deserves. Depending on the processes you’re outsourcing, that lack of focus could be detrimental to your small business.
9. Things Get Lost in Translation
It doesn’t matter whether you’re dealing with overseas freelancers or some talented expert just up the street — but if you’re handing out remote work via email or telephone, important instructions are often lost in translation. That could cause you serious time, money, and hassle.
10. You May Face Moral Dilemmas
While it may not be an issue for everyone, a major disadvantage of outsourcing is that you may be denying your team or a talented local agency crucial work or development opportunities. Growth begets growth, and by outsourcing work, you may not be contributing to the growth of your community.