Nearly every small business owner reaches a point where they realize more help is needed.
Determining what kinds of roles need to be filled, when to fill them and how to do so are among the most significant decisions that business owners make, in large part because hiring and training new employees can be costly and time-consuming. For many small businesses, it makes sense to outsource certain parts of their operations.
In this article, Excelsior Growth Fund’s Business Advisory Services team looks at steps to help you “deepen your bench” (a sports analogy for building talent) through outsourcing.
Step 1: Identify which tasks or services hold the best potential for outsourcing
A critical first step is to understand which parts of your business make the most sense to entrust to outside services.
An easy way to identify them is to ask yourself:
- Which tasks and services are critical to your mission? These form the core of your business and should be handled in house
Which tasks and services play support roles? These are necessary for smooth operations and may contribute to growth but aren’t at the heart of what you do. These are good candidates for outsourcing.
Where are you and your team lacking key experience and credentials? These tend to be good fits for outsourcing.
Are there tasks that can be automated through technology? You may be able to outsource some through software programs to improve efficiencies.
In addition, there are some areas in which outsourcing is a natural fit for small businesses. While large companies may have in-house accountants, marketing teams, and payroll and human-resources departments, very few small businesses have dedicated staff in some (or any) of these roles, especially in the early stages. These are necessary functions though, and are great areas for outsourcing.
Step 2: Find the best resources in each area you plan to outsource
Once you’ve determined which areas to outsource, you’ll need to find resources that best fit for your business.
Ask colleagues for recommendations at networking and industry events. For roles that require industry-based experience (like accounting), research who’s serving your competitors and ask if they’re taking on new clients. It can also be helpful to read your local business news to see which companies or professionals are earning accolades. Interview potential companies and candidates as you would with any other part of your team.
Common areas that small business owners often outsource include:
Bookkeeping: While some owners rely on bookkeeping software programs (like QuickBooksTM and XeroTM) in the early stages, outsourcing bookkeeping can help free up time so that you can focus on areas that support your mission and fuel growth.
A bookkeeper can help you manage the process of recording day-to-day financial inflows and outflows. It’s important that you continue to stay on top of your businesses finances, so establish a good relationship with your bookkeeper if you choose to outsource this role—it’s your money, after all. It’s also critical to find a trustworthy bookkeeper, so get recommendations from colleagues, interview several applicants and check references.
Accounting: It’s highly recommended that small business owners hire a reputable certified public accountant (CPA). A CPA’s role is both broader and more specialized than a bookkeeper’s—a CPA can help develop key financial strategies, save your business significant taxes, ensure you remain compliant with the IRS and other agencies and much more.
When looking for a CPA, recommendations from colleagues are helpful and it’s great to find someone who is experienced in your specific industry. When interviewing candidates, ensure that they understand your business’s long-term vision—with time, your CPA’s guidance can be critical to helping you achieve it.
Payroll: Many small businesses rely on software programs with payroll functionality. However, handing things off to a payroll company can help if your team is undergoing significant growth, if you have complex deductions or plans (like health benefits or retirement savings) or your business has other considerations that make payroll and its related compliance issues more complicated.
Human resources: As soon as you hire your first employee, a human resource liaison becomes a necessity.
Consider whether you or someone on your team is adequately experienced and knowledgeable to manage the day-to-day tasks. If not, this is an excellent area to outsource. Ask trusted resources for recommendations, and then interview your potential liaison, as you want to ensure they’re a good fit. Ask what services are included in a contract, what they can offer down the line that you may not need yet, and how they can help you manage common human-resources issues, like hiring and firing staff, employee complaints and others.
Information technology (IT) services, digital design and content management: All businesses should have a website and mobile capabilities. Regardless of how often you need outside professionals for these services, it’s always good to know who you can turn to when you do.
For the technical side of IT, ask local business resources for recommendations, like your chamber of commerce, as well as colleagues.
For the design side, take note of digital sites that you like and find out who’s behind them. Keep in mind that the cost of these services varies tremendously, so be clear about what you need. Don’t be oversold and ensure that you maintain the ability to update your site as needed.
Marketing: Every business needs marketing to help it grow. While most small businesses can launch with relatively simple, in-house marketing programs, eventually you’ll need to bolster your brand, extend your reach and grow your audience. Talk to individuals, small shops and mid-size agencies to see what they can do for you, how success is measured and how much it will cost.
Step 3: Manage your entire team—in-house and outsourced
Oftentimes, when businesses outsource they develop an “out of sight, out of mind” attitude. As a business owner, it’s always important to keep in mind that the people you hire or contract with, in any capacity, still play a role in your business’s success.
For that reason, it’s essential to:
- Create clear expectations for each contracted service: Clearly communicate your goals and expectations for each of the professionals you outsource to and thoroughly review any contracts you sign.
- Manage your team: Delegate tasks to those you outsource to and stay on top of projects and deadlines. Then, let them do their jobs.
- Set good communication and processes with your team of professionals: Check in regularly, solicit and give feedback and, like any other work relationship, create a positive work environment.
Build the best team, inside and out
Building a strong bench means that you’ve got the right people in the right places to do the right work, whether they’re within your offices or thousands of miles away. When approached wisely and managed with care, your outsourced team can be as important to your business’s success as those who are closest to you. Do your research and communicate well and you’ll build a solid team with strength in all areas.