Small business

Is Outsourcing a Good Idea for a Small Business?

There is a general feeling that outsourcing is for businesses beyond a certain threshold. That small businesses are simply way too small to either benefit or even get entertained by a well-established outsourcing company in places like India or the Philippines. Well, nothing can be further from the truth. Small enterprises are not just welcomed but if trends for outsourcing to India or Philippines are studied for the past few years, one will find a greater prevalence of small and medium-sized businesses. Now comes the question, is outsourcing a good idea for a small business?

The answer is a resounding YES! How can it not be? You simply have to look at the pain points common to all small businesses and you will realize that almost all these issues have a solution in outsourcing. How? Well, let’s go point by point, shall we?

1. Cost- For starters, name one small business or startup that doesn’t have financial constraints? If there is any such small business, I would sincerely like to meet them! Money is the biggest and the source of all other problems. The number of bright ideas that fade away into oblivion because of lack of money are simply way too many. You cannot hire at will or hire the best, you are unable to implement the latest technologies and machinery to streamline production, and you have to choose between a talented staff and required tools! Young entrepreneurs are always up against it, and instead of doing what they do best, get stretched in trying to manage and protect their company and its employees. Outsourcing to India immediately reduces costs by up to 70%, allowing the business the much needed monetary relief and hence buffer that it seeks.

2. Access to talent- As a small organization, you might not exactly be the dream destination for the top talents in the industry. Before outsourcing was a “thing”, most businesses made peace with that. However, that also meant that a small business remained that, a “small business”. Thanks to outsourcing however, this isn’t a problem anymore. It doesn’t matter whether you are a small business or a mammoth corporation, for the offshore outsourcing company you are simply the “client”. As in international diplomacy, where regardless of their size, population or military prowess, every country has the same standing in respect to each other; similarly for an offshore outsourcing company, you are at par with any large corporation they might have as a client. Further, while you might not be able to attract the top talent locally, you can easily hire one of the top offshore staffing agencies, thanks to the massive difference in prices overseas. And a top staffing agency in India will be able to attract the best available talent in the market in India.

3. Geographical location- One of the biggest challenges that many entrepreneurs face is their geographical location. In order to set up their businesses, entrepreneurs often have to shift to more “business-friendly” locations where both the right talent and the required number of potential customers can be found. However, those who cannot move to or near such places, are unable to realize their full potential. The advent of the Internet of Things and outsourcing has made it possible for a person living in even the remotest places to run a small boutique business. All he/she needs is a steady internet connection so that his ideas can reach talent located elsewhere on the planet and new innovation and inventions can come forth.

4. Access to the latest technology- Many outsourcing companies invest in the latest technologies pertaining to their domain. This is the case not just due to the fact that the latest technology will help with their work, it is also done to impress the client. For a small business, investing into the latest technology can be a time consuming and costly; also futile if the project hits roadblocks or is temporary.

5. Focus on core tasks- For the entrepreneur managing a small business, focusing on the core activity is critical for the success of his/her product. Any small business starts with an idea and it is the desire to see a brilliant idea come to fruition that essentially gives way to a business. However, between having a brilliant idea and creating a successful product, the process of creating and managing a business can be a very different cup of tea! If the brain behind a business is stretched thin in a thousand directions while trying to run the business, then the business stands to lose its biggest asset. By outsourcing non-essential and non-core activities, businesses can focus on what’s important and take the business forward.

6. Legal issues pertaining to labor- Small businesses are extremely vulnerable to employee lawsuits, and a single lawsuit by a disgruntled employee can bring the business down or cripple it significantly. Outsourcing eliminates this issue, since the offshore employees or remote staff that the business would hire would be legally not under the ambit of US law and offshore staff cannot sue their clients (the small business in questions).

7. Fair Competition- Perhaps the biggest positive that small businesses can derive from outsourcing, especially offshore outsourcing, is their ability to play at par with the big boys of the industry. All the benefits they accrue regarding cost, talent, access to technology etc. ensures that the playing field is leveled somewhat and if their product is good, they can hope to really rule the market in a very short span of time.

So, I am guessing that the answer to “is outsourcing a good idea for a small business” has been answered. For long, small businesses have lamented a market which isn’t fair and where the big boys played rough, gobbling up potential competition before they had had a chance to truly spread their wings. Thanks to outsourcing, for every Free Market Goliath, there can be a Free Market David- you, the small business owner.

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