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Why Small Businesses are Increasingly Hiring Outsourcing Providers


For many entrepreneurs, outsourcing – the act of using external services to handle a company’s tasks, is not a new concept. However, some small business owners still see outsourcing as a luxurious business solution for the big companies – this view is entirely out of place. Both small and big companies can hire outsourcing providers in order to achieve economic and other benefits.

Before You Outsource

While this business solution is ideal and beneficial to all, a small business needs to examine some processes first. For instance, you may have to look into the entire business to determine what should be outsourced and what shouldn’t. This is the best way to make outsourcing work to your benefit. As mentioned earlier, outsourcing comes with tons of benefits, especially cost savings. But you need to do it thoughtfully and carefully. In fact, outsourcing more than necessary can be a grave mistake as we saw in the early 90s during the outsourcing ‘mania’ period.

But, if you leverage an outsourcing provider wisely as a small business, you are bound to enjoy the following long-term benefits;

Greater Efficiency

If you decide to handle all the business processes in-house, you should expect higher expenses on research, product/service development, sales/marketing, as well as distribution. And, you will eventually pass all these costs to your customers, making your business less competitive to similar businesses that are leveraging outsourcing solutions to minimize costs. On the other hand, you will gain increased and valuable competitive advantage through an outsourcing company’s cost structure and economy of scale.

Controlled Capital Cost

As mentioned earlier, there are other reasons for outsourcing in addition to cost saving. However, cost-cutting is the major benefit and factor. Using this business solution, fixed costs are converted to variable costs. It also helps to make capital available for more business investments. It’s also a great way to by-pass huge expenditures at the early stage of a business. And, since you are able to release more funds into activities that produce revenue, your business may become more attractive to investors.

Ability to Begin Fresh Projects Faster

Usually, established outsourcing providers have resources to commence a project without delay. On the other hand, when you decide to handle such projects within, it may take months or weeks to hire the right persons, give them the necessary training and support. And, if there’s little or no resources at hand to accomplish these, the project will be placed on hold.

Reduced Labor Costs

The cost of employing and training in-house staff for a temporal project (e.g. new product marketing campaign) can be huge. You will be better off in terms of cost saving, time saving and increased efficiency by resorting to outsourcing providers for such projects.

Daven Michaels is a New York Times Best Selling Author and CEO of premiere global outsourcing company, 123Employee. The company employs hundreds of young bright individuals on three continents. His International event, Beyond Marketing Live! Inspires entrepreneurs build & grow their business with revolutionary new theories and systems allowing them to design the business and personal lifestyle of their dreams.

5 Responses to “Why Small Businesses are Increasingly Hiring Outsourcing Providers”

  1. Pete Zdanis says:

    A complete digital marketing guide. Wonderful and very interesting!!! Thanks Bud

  2. Giles Lieb says:

    Thanks for this amazing article.

  3. Very informative. There are lots of outsourcing companies nowadays. So to be sure of your success make the right choice.?

  4. Enjoyable content! Thank you

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