The Value of Outsourcing

Posted by Heather Villa, CMA, MBA, MSM on October 01, 2009 in: Delegation for Success

Many people still associate outsourcing with manufacturing or global workforces, but it is much more. Outsourcing is an efficient way to manage special projects or overflow, expand staffing resources, and grow your business without the related increase in overhead and vacation pay. Many businesses outsource critical business tasks that require specialized knowledge such as bookkeeping, marketing, customer service, and sales.

Outsourcing is an effective way to manage business critical functions without incurring the expense of full time employees. Overhead costs are kept down. There’s no office drama between two competing employees.

“But I’m so small it’s cheaper for me to just do the work myself” is the common objection of many small business owners. However, what they don’t realize is that it’s actually a better use of time and money talent to outsource. In a Fortune 500 company, you are unlikely to find the CEO working in the mailroom or the Administrative Team putting together quarterly forecasts. Companies hire people to do specific jobs based on their expertise. Each employee contributes to the success of the organization by performing their specialty.

Every business must manage a budget and no one has infinite resources. But your budget is more than the tangible dollars in the bank; it’s also the value of your time. And the amount of focus you spend on revenue-generating effort. As a business owner, if you spend 15 hours per month on bookkeeping you have taken 15 hours away from other activities. Consider this example from a solo entrepreneur:

20 billable hours per week at $100 per hour = $2000

10 non billable hours per week (which might include bookkeeping or administrative work) worth $45.00 hour = $450

If the entrepreneur outsourced the non-billable tasks he or she would gain 10 more billable hours or $1000.00. Even after paying $450.00 for outsourcing, there is a gain of $550.00 and they are no longer burdened with a detail-oriented task that they might not be skilled at.

In addition to the financial gains, outsourcing provides a peace of mind that the task has been expertly managed.

In your business, are there non-revenue-generating tasks that you’re doing simply because you’ve always done them or because you’ve thought that you couldn’t afford to hire someone else to do them? You don’t need to hire an employee, but you can hire someone else to do them and you’ll earn more money doing things that you probably enjoy more!

About the author:
Heather Villa, MBA CMA MSM, is a Business Coach and Entrepreneur. She helps business owners achieve success in operations, productivity, project management, and social media. Read her other articles at http://hireheathervilla.com/resources/articles/ and visit http://heathervilla.com for more information.

Disclaimer: © 2009 Heather Villa. Permission is granted to repost this article. Article must be published in its entirety, including author bio, and all links must remain intact.

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I love working with coaches, freelancers, and entrepreneurs to help them become more successful. If you'd like to improve your business, find out how I can help.

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