Four Reasons Why Outsourcing Is Not Just for Big Businesses

A common misconception that plagues the business world in general, and the pool of small businesses and startups in particular, is that outsourcing or, specifically, the ability to outsource work is only limited to big businesses like large multinational corporations.

Well, nothing could be further from the truth.

This sad assumption from small business owners, entrepreneurs, and startups alike is what keeps these businesspeople from taking advantage of the opportunities that outsourcing provides to big businesses and SMEs alike. And what are these advantages, you may ask? These advantages can include—but are not limited to—cost savings, the ability to hire professionals with both highly skilled expertise and specialized skills, the opportunity to ship out repetitive tasks, and the advantage of being able to focus on the company’s core business, thereby helping it grow in the process.

Let’s go on a deep dive on why outsourcing is not just for big businesses and how it can benefit small to medium-sized organizations and startups as well.

This is the most obvious advantage of SMEs and startups going the outsourcing route—the cost benefits involved. The common misconception about big businesses having all the fun when it comes to outsourcing is that they can pull it off because their organizational structure is more suited to outsource multiple positions as well as the fact that they have a bigger budget. But this is actually false—outsourcing can benefit any company, regardless of its size or organizational structure, and any-sized company can afford to outsource.

In fact, with the choices nowadays of reputable outsourcing firms all around the world, a budget is no longer an issue. Any small or medium-sized business and even startups can now afford to outsource. And with outsourcing comes cost savings for the organization, of course, but how exactly does a business save?

Outsourcing—especially when companies outsource noncore activities—can help save SME businesses or startups money on a number of levels. For one, these SME companies or startups will be spending less on technology, infrastructure, and staff while, at the same time, using the outsourced resources far more efficiently. Essentially, the cost savings result from three areas:

(1) Salary costs. If a company is just using hourly services from an external provider as and when needed, that is clearly going to be cheaper than hiring an in-house employee full time.

(2) Employee costs such as insurance, pensions, and benefits.

(3) Indirect costs, including utilities, office space, hiring costs and administration.

The thing about SMEs and startups is that, unlike large multinational companies, they still have niche expertise. This can be a good thing in that these relatively smaller companies and businesses are excellent at one or two things, but that leaves other tasks that will be better outsourced, whatever these tasks may be—such as Web design for instance or maybe even copywriting, or even accounting or bookkeeping. The bottom line is, these specialized skills can be outsourced by SMEs or startups so these companies can reach the level of quality that they need in order to increase effectiveness. SMEs or startups would do well to take a hard look at their business’s core values so that they can determine their strengths and weaknesses. The key for these SMEs and startups is to outsource tasks because it will help advance the company, not just because of the shallow reason that they don’t want to do a particular task.

It’s also good for SMEs and startups to outsource so that they can gain access to experts. For instance, many reputable outsourcing companies out there can help provide smaller businesses with experts in marketing, information technology, human resources, engineering, and more. This is another important reason, as we just discussed, why outsourcing is not just for big businesses.

This is in direct contrast to the previous point we’ve just discussed wherein SMEs and startups decide to outsource to gain access to expertise and advanced skill sets. In this case, smaller businesses can outsource repetitive tasks—like, for instance, data entry, social media management, blogging, administrative tasks, etc.—in order to focus on the core business.

Last but not least, the fourth reason why outsourcing is not just for big businesses. Speaking of SMEs and startups being able to focus on their core business, which we just discussed in the previous point, it’s just as simple as that—when businesses, regardless of size, decide to outsource to gain expertise and skills and even to be able to ship out repetitive tasks, the main focus and end goal is to be able to focus on the company’s core business.

In other words, when smaller businesses can free up more resources through outsourcing, they can focus more on the important things, the things that matter, which may lead to unprecedented growth and may help the “small” companies on their way to joining the ranks of big multinational companies.