An estimated 87% of businesses in the IT and business sector say cost reduction is the number one reason for outsourcing, according to smallbizgenius.net. Companies of all sizes in every industry have experienced a big blow since the COVID-19 crisis began. The impact of the pandemic has forced business owners to identify grey areas and use creativity to stay afloat. As a result, businesses are shifting their focus to e-commerce operations while still keeping up with activities in physical stores.
The shift to e-commerce has brought about the need for enterprises to manage finances more efficiently. For this reason, brands are adapting to e-commerce accounting services provided online. According to Swati Khanna Kapoor, of Whiz Consulting, an Australian based offshore accounting vendor, “Clients want solutions that help them stay afloat during difficult times when they’re uncertain of what might happen next.” Swati adds, “As part of the firm’s advisory services, we have been helping clients understand how they can shift to e-commerce. This allows them to survive and brings stability to the business.” If you have been wondering who should use outsourcing services and how it benefits startups, read on to find out.
If you’re like many entrepreneurs, you’re probably asking how outsourcing reduces business costs. Typically, small businesses operate with limited budgets, which is why the cost of hiring experts, and buying equipment can be prohibitive. And while getting a loan to finance your venture is a perfect idea; obtaining financial aid as a startup is hard. With this in mind, outsourcing is the only cost-effective way to promote business growth while keeping costs down. When you outsource work to third party companies or freelancers, you reduce operating costs by 20-30%.
Outsourcing business functions like IT, human resources, payroll, accounting, and marketing can save your company a lot of money. Many vendors you can outsource tasks to are highly-skilled and have years of experience working with clients like you. So, you don’t need to invest in training because they’re already familiar with your business requirements. What’s more, outsourced teams work remotely and have the required infrastructure to perform tasks efficiently. For a startup, this means reduced costs on office space rent, taxes, employee benefits, and technologies.
Risk management is one of the most overlooked benefits of outsourcing business processes. Let’s say your company experiences challenges due to market fluctuations, global health pandemic, technical mishaps, or natural calamities. Your outsourcing partner will ensure business continuity by working on your projects and submitting deliverables on time. Ideally, outsourcing promotes stability during a crisis because vendors are not affected by internal and external challenges affecting your business. Since service providers are equipped, skilled, and work remotely, they can add value when in-house staff is unable.
Sometimes a company requires additional resources to streamline processes or complete projects. For instance, if you’re overwhelmed with accounting tasks during auditing and tax season, outsourcing provides the help you need for a specified period and cost. Given your vendor will work on the project at hand only, you’ll pay the agreed service fee. Moreover, you can always hire them again, resulting in consistency and flexibility. As a small business owner, you want to focus on maximizing your budget and promote efficiency to stay ahead of the competition. Therefore, evaluate the business functions you can outsource so you can minimize costs, enjoy flexibility, and most importantly focus on core functions.
Outsourcing business functions has become an essential part of the business, whether it’s a restaurant, manufacturing company, or grocery store. When you outsource IT, marketing, accounting, payroll, or human resource tasks, you enjoy increased efficiency and flexibility, reduced costs, and risk mitigation, to mention a few.