Running a business is never easy for an SME business owner. As you get your business up and running, the long working hours and continuous decision making can be stressful. As it grows, more of your precious time is spent strategising, managing employees, balancing books and recruiting. If you get it wrong, problems will arise that can leave you burnt out – you may struggle to get your business back on track.
As an entrepreneur, you expect and welcome challenges but sometimes it’s not a good use of your time to try and manage every part of your business. Fortunately, there is a solution that can allow you to focus on your business strengths and priorities while ensuring the rest of your business is operating at 100% efficiency.
Contracting difficult tasks out to a third party is a common practice in business, much like it is at home when you hire a specialist tradesperson to fix a problem with your boiler or electricity supply. You would never dream of tackling all your housing problems yourself, so why should you with your business? To open your mind to the power of outsourcing I have outlined the three main reasons why it is a key tool in your business arsenal.
Many people have a great idea for a service or product but fear stepping onto the entrepreneurial ladder because they don’t understand some aspect of running a business e.g. accounting, employment law or marketing. This should never hold you back from realising your dream of being your own boss. Some of the world’s best business leaders are so because of their leadership and decision-making skills that allow them to get things done.
There is no question that starting your own business can be difficult due to the inability of many start-ups to access finance. The SME Alliance which represents thousands of small businesses in Britain stated to a 2018 parliamentary inquiry that big banks are reluctant to lend to small businesses. Small business owners are forced to use their own savings or even seek assistance from family and friends to source capital. Once finance has been secured, it is quickly swallowed up by a range of costs.
Lloyds Bank recently stated that the average cost of starting up a new business is £12,601 with property accounting for 25% of costs incurred. Property, transport and IT each account for 20% of start-up costs. Given the large outlays you may experience, it’s critical you think smartly about your business priorities and savings. For example, if you are fortunate to have a thriving business and need to hire specialist staff or equipment, it may be easier to outsource certain business operations such as data entry to reduce the need for space or an expensive relocation.
Finding competent staff is especially difficult and expensive for SME businesses. They don’t have the big brand name to draw talent in and training and recruitment can be expensive and time-consuming. If an employee leaves, the impact on your business can be huge. A study by economic consultancy, Oxford Economics states that the average cost to employers of replacing a single member of staff is more than £30,000 and takes at least 28 weeks on average to bring a new employee up to speed. A more efficient solution in light of these hidden costs might be to replicate the function you need to fill with an appropriate outsourcer. This means that you not only have access to the specialist knowledge you need to grow your business but it also ensures continuity so your performance and customer service will not be impacted.
When you are growing your business, there are always new challenges to overcome such as breaking into new markets and creating new customer offerings, unfortunately as it does so, you will find yourself spending more time trying to manage it. You need to focus on the big picture as much as possible, because a business with no direction is going nowhere fast. Think smart. Use outsourcing to increase your efficiency and leave administrative functions to others as much possible. Doing so will save your business time and money in the long run.
Outsourcing New Product Development
If you have a product, but do not have the means to develop or market it, Innovolo is your outsourcing solution. Innovolo’s Innovation-as-a-Service platform helps SME business owners and startups successfully bring both new and existing products to market at low cost through an on-demand, innovative and smart services platform.
“Innovolo is becoming a crucial and integral part of the process by which my company develops our products. I have to admit that when we started working with the Innovolo team I was sceptical as to whether these outsourced tasks would be done at least on par with what we could do in-house, but I was mistaken.”