1. Information technology (IT)More than half of companies –– 53 percent –– outsource at least some of their IT functions. Another 26 percent plan to do so in the near future. In addition to cost savings (which can be as much as 40 percent), using outside vendors or cloud solutions to manage your IT functions makes you more agile as a company and provides flexibility as your business grows.
2. Accounting/FinancePayroll is complicated and time consuming. Yet 60 percent of smaller businesses still manage it in-house. Handing this task off to the experts has been shown to decrease costs and increase compliance. Companies that outsource payroll save 18 percent over businesses that tackle it themselves. Plus, the IRS estimates that 40 percent of small businesses pay roughly $845 per year in penalties for late or incorrect filings and payments. Sales tax can be equally burdensome. Aberdeen Research Group estimates that small companies spend 24 days per year managing sales tax compliance manually, at a cost of around $22,000. Face an audit and this cost increases fourfold. Online services and automated software can reduce this risk and save you a bundle in the long run.
3. PeopleThree in four U.S. small businesses say hiring freelancers gives them a competitive edge. One-third of Americans are now opting to either freelance, contract, or consult, which means there is no shortage of skilled labor for hire. Utilizing freelance and contract workers gets companies talent they likely couldn’t afford otherwise. (Utilizing freelance or contractor workers can save you 30 to 50 percent.) Virtual assistants are also a hot commodity, with affordable administrative experts a mere click away. Outsourcing allows your business to scale staffing needs according to seasonality or project. Just be sure to follow protocol for properly classifying workers to avoid IRS scrutiny and possible penalties.
4. MarketingE-commerce and social selling has made online marketing, web stores, and social media more vital than ever for small businesses. But for most small businesses, it isn’t financially feasible to have full-time PR, social media, and web design functions in-house. It may be helpful to contract or freelance out some PR, marketing, or social media management.
5. LogisticsAs a retailer, outsourcing logistics frees up time to focus on selling and merchandising. Having fulfillment, warehousing, and delivery activities handled by third-party providers not only lowers overall spending, it helps improve customer service. These providers are experts in what they do, so they can respond and scale to meet demand quickly.
6. Customer supportFor smaller organizations, having trained or dedicated customer service staff isn’t always a viable option. This often means office staff or salespeople have to handle this function, dividing their time between getting new customers and keeping the old ones happy. Outsourcing to a contact center can give you that extra power to handle those customer calls. However, business owners should carefully weigh their options as costs and services vary widely. Cloud-based services or shared-agent solutions may be more affordable choices. Outsourcing can be a smart strategy for extending your capabilities as an organization while keeping a focus on your core competencies. Also, don’t discount other advantages such as lower risk, better compliance, and greater control over resources. Most important, outsourcing allows you to refocus your priorities as a business owner or manager and avoid wasting time, money, and talent (including your own) on activities that could be better handled by an expert outside your organization.