For many entrepreneurs, the word outsourcing brings to mind large corporations shifting jobs to lower-wage workers in foreign countries. While this is a particular type of outsourcing, specifically referred to as offshoring, outsourcing actually is a much broader concept referring to any job functions handed off to a third party. In fact, there are many types of outsourcing that are commonly available to small businesses. If you operate a small business, you’ve no doubt discovered some tasks that can be delegated. While outsourcing certain tasks can provide cost savings, it also can help benefit businesses by helping them to run more smoothly, meet customer demands more efficiently, and build a diverse network of freelancers with specific talents. In 2010, the software company Intuit calculated that, by the year 2020, more than 40 percent of the U.S. workforce will be freelancers.
Whether you call it outsourcing, subcontracting, or hiring freelance work, with a careful approach you can build strong relationships with off-site professionals and achieve your specific project goals on your schedule. Freelance workers can be found in your own community or on the other side of the world, but they can save you time, money, resources, and headaches, and they can help you be the best resource for your customers in a competitive marketplace.
Achieving business goals
Ultimately, outsourcing is a way to garner expertise from business professionals when it is not affordable to hire full-time employees. In the current economic climate, most small businesses find it crucial to be extremely efficient with resources. Furthermore, savvy managers understand that sometimes a job requires an outside expert on a short-term basis.
Matt Amundson, president of First Security Bank in Hendricks, Minnesota, says that outsourcing is particularly valuable to his small business. To be successful, his company needs to work with a wide variety of contract workers, and smaller regional banks are no exception. Amundson always does a cost-benefit analysis to determine when to bring in outsourced labor and for which jobs.
Amundson has found it advantageous to outsource various services, and this has streamlined his business and freed up more time for his full-time staff to meet customer needs. For example, he subcontracts payroll, tax work, accounting, short-term staffing, and IT services, including the development of mobile apps.
“Outsourcing is an industry of its own, and many companies providing workers are small businesses themselves,” he notes. By bringing in outside professionals for individual projects, he is able to support other local businesses.
Outsourcing is evolving
As technology advances and economic trends change, businesses are turning to outsourcing to help meet new demands and solve new problems.
“Electronic media transformation has been huge,” Amundson says, and he points to small startup services that can now be developed and implemented very quickly. “The speed has come up exponentially.” As a result, businesses like his are able to meet customer demand for faster services.
Jason Krapf owns and operates Today’s Vibe, a boutique creative marketing agency in Philadelphia. His business focuses on strategic web development and design, search engine optimization (SEO) and online marketing, as well as less traditional marketing campaigns for all types of clients. While much of the work is handled in-house, Krapf occasionally outsources some types of jobs, including SEO. “We also outsource some data entry, whiteboard animation creation, very basic graphic design, and other coding projects,” he adds.
Krapf points out that, for small businesses looking to outsource, there are now numerous web-based communities connecting domestic firms with outsourced work from all over the world. “This has helped streamline the process, and the mediation role of these companies takes some of the frustration out of outsourcing work,” he explains. “Many sites will require services be packaged in much smaller increments, allowing small businesses à la carte access to outsourcing many of their daily demands, with short turnaround time, no retainer fees, and some of the cheapest labor available in the world. Now a roofing contractor in Maine can order SEO services from India in $5 bundles, rather than paying a domestic firm $500 for the same work.”
At the same time, Krapf expresses some unease about using the current online freelance marketplaces. The quality of the work has not been consistently reliable, and he is concerned about the type of living the international freelancers are earning. “Still, I didn’t have a choice but to use it,” he says. “It hurts domestic creative companies too. It’s hard to stay competitive in the market share I was targeting with Today’s Vibe.” Krapf is currently launching a new company with his business partner, and says he wants to try to phase out internationally outsourced SEO, if possible.
How can small businesses find freelance help?
There are a number of marketplace websites where small business owners can find third-party professional resources online. Some of the most popular sites to find freelance assistance for small projects include:
- Freelancer.com (one of the largest online marketplaces for outsourcing work)
- Fiverr.com (a site to recruit help for $5 "micro-jobs," including basic IT assistance)
- GURU.com (another large outsourcing marketplace, where freelancers are "matched" to job needs)
On the other hand, sometimes the best way to find quality assistance is through existing networks of business associates. Amundson has had success simply by calling up industry peers and seeing if they have any recommendations. He has also networked local trade associations to look for external help. However, due to the sensitivity, regulations, and security concerns inherent in his industry, Amundson is always careful to do thorough vendor assessment.
If you operate a small business, it may be well worth your time (and money) to consider outsourcing particular tasks or individual projects. Given the acceleration of communications technology and the trend toward specialized freelancing, the best person for the job might be someone in another country, or just someone down the street. Whether you need help developing a polished website, processing company payroll, manufacturing and printing, or publishing content that adds value for your customers, there is almost certainly someone out there who can help you achieve your business goals.