How Outsourcing Can Be Your Pocketbook’s BFF
As the owner of a small business, my role is responding to clients and bringing in the revenue. In doing so, I see the more mundane administrative tasks left in my wake: invoicing, account management, payroll, marketing, purchasing, and inventory. The list is endless.
Luckily, there’s salvation for resource-strained businesses and their teams: Outsourcing can be your
Here are six good reasons to outsource:
#1. Payroll Pains
Payroll, without a doubt, should be outsourced. It’s time-consuming and requires attention to detail that proves frustrating when paying your people is an urgent necessity. More than 40 percent of small businesses outsource their payroll tasks, and that includes my firm.
We use Gusto, an online payroll service. It files all of our forms (both state and federal), and it also directly deposits paychecks for us.
Another reason to outsource payroll is to avoid costly errors. One in three employers is penalized for payroll errors by the IRS, and total penalties amount to billions of dollars. Unless you want to spend a substantial amount of time becoming overly intimate with the fickle and ever-changing tax regulations, outsource your payroll to avoid costly errors and protect your bottom line.
Lastly, outsourcing your payroll can help cut costs. Businesses overpay employees, on average, by roughly 4 percent because of differences between accurate time records and employees’ time worked.
#2. Social Strains
Social media is a powerful client prospecting tool, though it’s not directly associated with cash flow. I, therefore, can’t pretend to have it front and center on my radar, so my company outsources all of our social media to Social Marketing Solutions, which has people who do.
And might I add: Hiring an in-house social media manager (as opposed to outsourcing one) could cost you between $50,000 and $70,000 a year in salary for him or her. If it isn’t obvious, outsourcing a decent social media manager means you get an expert handling your platforms for far less money.
And the proof is in the pudding: It’s been a little more than a year, and thanks to our social media outsourcing partner, we have a lot more engaged followers and have exploded on LinkedIn.
Hire a consultant you can trust and who understands your company’s goals and the industry dynamics. He or she should also monitor activity and metrics to ensure you’re projecting a consistent and accurate brand image.
#3. The Legal Load
Unfortunately, your own legal insights could be ill-informed at best, and following them could be disastrous at worst. Still, you don’t have to have a lawyer on retainer to get reliable and timely legal advice.
Try online sites like JustAnswer or Rocket Lawyer. These services are great for tapping legal expertise when you need it.
And a study by Deloitte found that upward of 65 percent of respondents outsource their legal counsel and opinions — that’s nearly two-thirds! Further, another survey conducted by Allen & Overy discovered that almost 40 percent of respondents would prefer a “one-stop shop” when it comes to legal services. Thus, outsourcing makes the most sense.
Attorneys are vetted by past clients who provide reviews, so it’s easy to find the exact expertise for your situation and to feel confident in a consultant’s ability. By hiring a professional who knows contract and business law, you can protect your assets and free up your time.
#4. Website Woes
If you’re like me, updating your company website and boosting its search engine optimization is not high on the priority list. However, doing both is crucial for new business. Installing IT solutions to protect my systems and clients from hackers is also not part of my expertise. Outsourcing this part of my business keeps me from worrying about constantly being current. It also saves a business time and money while simultaneously boosting website maintenance efficiency and relieving stress.
#5. Smart Savings
From my experience, outsourcing payroll saves four to six hours of staff time a month. Using Social Marketing Solutions saves 20 hours a month, and using our outsourced bookkeeper saves 30 hours a month.
Still not convinced that outsourcing is the way to go? Consider the effects on our bottom line: Payroll saves us $250 a month; Social Marketing Solutions saves us $1,500 a month; and having a part-time accountant saves us $2,000 a month.
#6. Ecstatic Employees
Outsourcing time-consuming administrative tasks means my team members can focus on the tasks for which they were hired and trained. Capable staff can be competent in many areas, but outsourcing provides the niche skills of experts who complete each task to the highest levels of quality and speed.
Without outsourcing, my typical day would include an hour or so wearing a CFO hat to do the accounting, plus another few hours wearing a COO hat because we get hundreds of files daily that must be tracked. Then, donning my CMO hat, I would reluctantly have to venture into the land of Twitter, LinkedIn, and Facebook for another two hours a day or more.
None of these hats fits me particularly well — and that of the CFO is the most uncomfortable. Accounting is the most time-consuming administrative function for me: It requires the most brainpower to complete, and it’s the area wherein I procrastinate the most.
But using online businesses like QuickBooks Online means small businesses can avoid the pitfalls of poor-fitting hats (and procrastination) at a palatable cost.
And here’s something to consider: Not only are you retaining your top talent who’ve been in your company for some time (and who can now focus on performing what they were hired for), but you’re also bringing talent in. In fact, nearly 40 percent of companies outsource solely to get their hands on new skill sets. It’s a win-win no matter how you look at it.
I’m not the only one who relies on independent contractors. The New York Times reported that agencies and contract companies have accounted for almost 94 percent of employment growth in the past decade — and almost one in six jobs. Now, try convincing me outsourcing is passé.
What services have you seen success in outsourcing? Let me know in the comments.
Ben Walker is CEO of Transcription Outsourcing, which provides user-friendly, high-quality, and cost-effective transcription services to organizations all over the U.S. It specializes in the medical, legal, law enforcement, financial, and general business industries. A resident of Denver, Colorado, Ben enjoys golf, hiking, and watching college football.Read Full Bio