How to Turn Business Challenges into Strengths via Outsourcing?

Every business operator has strengths in relation to the product or service they are providing. Business, however, isn’t that simple. Not only do you have to be an expert in your product or service, but you also have to be an expert in business processing, knowing how to run the business, control your finances, marketing, integrating with technology, and keeping up with social trends. It can be easy to become overwhelmed by this challenging gamut of requirements. The savvy business operator utilises outsourcing to reduce the risk of being spread too thin.

By embracing the benefits of outsourcing, you are tapping into the strengths of people who have literally made it a business to be experts in areas that challenge you. This enables you to synergise their strengths into your business.

Consider why businesses may turn to an accounting firm to prepare their financial accounts. Accounting firms specialise in taxation, small business accounting, and financial reporting. By tapping into these external experts, you don’t have to pay the costs to internally train and qualify staff, or invest in software and infrastructure just to deal with your own financial accounting requirements. Utilising outsourcing services completes the puzzle to creating an overall strong business.

The key benefits of outsourcing include:

Cost Advantages

1. Upfront capital savings

When it comes to setting up in-house expertise there can be major investments required in staffing, technology, training, policies, monitoring, and office space.

2. Savings in ongoing overheads

By outsourcing, you are paying for the expertise that you need, when and as you need it. You are not stuck paying for internal high fixed costs and overheads generated by internal staffing needs.

3. Temporary needs

You can avoid paying to train and equip temporary staff, or worrying about what to do with additional staff at the end of a project.

Finally, with more cash to focus directly on your own expertise, you can concentrate your finances on developing and improving the core focus of your own business.

It is important to keep in mind the economies of scale when deciding when to make the cost-effective decision to outsource. A micro business may find outsourcing costs for very simple needs to be prohibitive. As they grow and start employing staff, trying to find the time and money to cover the internal requirements of running a business starts to become a burden. Outsourcing to local service providers at the right time provides a cost-effective avenue for the business to grow with.

Efficiencies

When you try to focus on all of your own business needs internally, you are diluting your focus. By utilising outsourcing to draw from their economies of scale, your business can concentrate on its own internal strengths. When there are already established experts to help you, it is inefficient to engage in research and development costs for areas that are essential to keeping your business afloat, but not essential to what your business produces. Your productivity can literally be doubled when you allow your business to focus on the core business.

Improves your business position

Through outsourcing, small firms can access the same level of support services that big businesses often have.

Risk management strategies are managed by experts in particular fields of risk. With regular changes in the market, technology, and legal requirements, your outsourced experts are in the prime position to understand how best to cater to and make decisions around the risk relevant to their field. This ensures you can focus on the risk management strategies central to your field.

Let’s you focus on your strengths

Ultimately this is the real part of the benefits of outsourcing. You can concentrate on where you shine. By drawing on the support of outsourced experts to balance the needs of the business, you are utilising their strengths so that you can focus on your own.

How do we know outsourcing helps?

Simply by looking at where businesses struggle, it becomes clear that benefits of outsourcing can turn your challenges into strengths.  

In their December 2017 report, the Australian Securities and Investment Commission (ASIC) revealed the top three reasons for business failures (noting that businesses may have failed for more than one reason):

1. 47% due to inadequate cash flow or high cash use
2. 46% due to poor strategic management
3. 35% due to poor financial control, including a lack of understanding of finances, particularly poor record keeping

With strategic management, legal, and accounting issues comprising such a significant portion of business failings, it is clear that payroll outsourcing, management consultation, outsourced bookkeeping services, accounting outsourcing, and legal process outsourcing, in particular, can provide a crucial advantage to your business.

So…

When a business owner knows where their own strengths are, and where they need to focus, they can see areas of improvement which outsourcing would fulfil. In this way, the savvy business operator is using outsourcing as a powerful tool to maximise potential.