How to outsource and increase your profits

How to outsource and increase your profits

Under the pressure of today’s global market, a successful business operates on the lowest possible cost while never compromising the quality of its products or services. Outsourcing is a move by management to delegate some of their business functions to capable third parties. Are you on a tight budget? Do you need a service your staff cannot provide? Is it a one-time task? Are your staff and management overworked? Has your company made no progress recently? If you nodded in agreement to any of the above, then you’ll find outsourcing a strong possibility.

How will outsourcing affect your budget?

You want to boost your brand name awareness and sales by running a marketing campaign. Instead of paying a full-time, in-house staff to organize, run and manage your ad campaigns, you can simply outsource the service, eliminating the cost of salaries, taxes, provided benefits, operational and workstations equipped with everything an employee would need.

Example:

Lets say, the cost to maintain the ideal environment for one well-qualified employee could run you near or above $100,000 per annum.  If you outsource a marketing service to run one ad campaign; for a period of one-month both online and physically this may cost you anywhere from $1,000 to $20,000, dependent on your needs. This means, you pay one-fifth the cost of one employee to advertise once per year. Even if you wanted to run a one-month long campaign every quarter at a cost of $4,000 each; that brings you to $16,000 a year.

What jobs or positions can be outsourced?

Entrepreneurs should outsource from the start. Generally, businesses can outsource almost any task:

  • Administrative assistants
  • Business consultants
  • Accounting/bookkeeping personnel
  • Marketing and PR teams
  • IT consultants and specialists
  • Lawyers
  • Technical writers
  • Social media managers
  • Safety consultants
  • Recruitment experts
  • Quality consultants
  • Videographers and photographers

Pros of outsourcing

  • Better revenue realization.
  • Lower labor cost.
  • Access to a larger talent pool.
  • Saved time, specialized professionals are much more efficient.
  • No additional costs, such as employee training or purchasing new software.
  • Won’t be obligated to one company and will be able to outsource differing services from multiple service providers if you see fit.

Cons of outsourcing

  • Could make you dependent on services carried on outside your business walls.
  • Communication is less face-to-face.
  • May have conflicting quality standards.

Service provider selection criteria

You have access to an incredibly large talent pool but how do you decide on who to hire? Have a vendor selection criterion in place beforehand. This will be the checklist of prerequisites your potential hire should meet. Your demands for this particular document must be based on applicable laws, policy, and standard as required by your business for the best quality output. Your requirements can be, but are not limited to the following:

  • Any documentation required to have an understanding of the company or individual you are hiring/outsourcing. This can be a company profile or individual resume, both with references.
  • Ethics and financial statements.
  • Quality and safety statement/policy.
  • Legal requirements.

Where to find service providers

It is the age of the Internet and digital marketing, and there is no shortage of companies and people you can find to do any job you need to have done. User platforms not limited to the following are hosts to thousands of professionals:

  • Fiverr
  • FiverUp
  • Gigbucks
  • 99designs
  • Gigster
  • Zirtual
  • Clarity
  • Guru
  • Peopleperhour
  • SEOClerk

Many more options are available at the click of a button. Alternately, you can go to your local PR firms or classified ads.

Contractual agreements

When using a platform such as Fiverr, there is no need for a contract between you and the service provider. If you’re uneasy, you may have a statement of work to be agreed upon by the contractor via Fiverr inbox. If you’re unhappy with the result you’re given, Fiverr will step in and review what was requested and what was delivered to make a fair decision based on the transaction. When dealing with established firms, always have a contractual agreement with a formal purchasing and billing correspondence. Individual services providers should also be entered into a contract.

Your contracts must:

  • Highlight the assigned task.
  • Note the agreement and acceptance date.
  • Note and identify the participating parties.
  • Have a proper statement of work.
  • Explain terms and conditions.
  • Include legal requirements and a confidentiality agreement.
  • Outline the breach of contract consequences.

Purchasing and payments

Have a purchasing policy/procedure. Its purpose is to describe methods to assure that purchase requirements are controlled in accordance with all necessary laws and applicable requirements. Its scope should be to provide a purchasing process for procurement of materials or services that affect the quality of products or services provided to your business. A procedure should be implemented and each step should be taken to ensure a formal paper trail. Purchasing documents should clearly and completely describe the ordered products, services including, where applicable, a precise identification number and specify the necessary requirements for material or service.

Freelance platforms often have options to pay electronically via bank transfer, debit and credit cards, and also Paypal, which is an online money transfer platform. If you’re dealing with a firm or individual, utilize your purchasing procedure to moderate and track all payments and financial correspondence. You may provide check payments in addition to having the ability to e-transfer money or use Paypal. You have the freedom of paying upfront, after the completed assignment, or in parts if agreed to by the vendor and stated on your contract.

In conclusion, outsourcing just the right amount will increase the efficiency of your business while you retain control of your direction and growth. The process is not complicated, and access to the talent pool is not limited.


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