Like most business decisions, timing is a significant factor. In this regard, outsourcing is no different. Outsourcing has a lot of advantages and benefits, from reducing costs to increasing scale. Properly executed, outsourcing can take your business to new heights.
However, wrongly organized outsourcing can cause severe problems for your business. Asides from poor management and communication, one major mistake entrepreneurs make when outsourcing is timing. Outsourcing too early or too late can cost your business heavily while destroying the whole outsourcing process.
Factors to Consider Before Outsourcing
The following factors must be in place in your business before you decide to outsource.
The scale of demand
For outsourcing to make sense and be profitable, your business must be at a stage where there is a massive inflow of demands. When your team’s workload is more than they can handle, then it is time to outsource. If your business’s demand and workload are low, the cost of outsourcing and financing a team might be more than the benefits.
For outsourcing to be profitable, you would have to get as much value as possible from your team and your outsourced employee or firm; This would be difficult when there is hardly enough workload to go round. Idle or underutilized employees cost you and your business heavily.
Capacity and competence of your team
Outsourcing would require you and your team to take on new roles. Most of these roles would be supervisory. Outsourcing might see your team members moving up the corporate ladder to supervisors, managers, and heads of specific departments.
To fully utilize outsourcing’s benefits, it is advisable to designate a team member to supervise and manage the firm or employee you are outsourcing to.
However, this would require a high level of supervisory, communicative, and managerial skills on the part of you and your team. Therefore before outsourcing, be sure that you and your team are capable of handling the new roles.
If you feel your team members might lack this skill set, then organizing a training program might be a simple way to fix this. There are excellent companies such as Si Mar Inc that specialize in providing your team with the skills necessary for this next stage in your business.
Conclusion
Outsourcing is a critical step in the growth of your business. It opens your business to expansion and new opportunities. However, it all depends on how and when you do it. Deciding when to outsource comes down to two basic things. Demand and Workforce, once they are both in position, then it’s time to outsource.
