06/26/13

3 Signs Your Small Business Needs to Outsource

Lendio-Blog-OutsourceIt’s no secret; successful businesses concentrate on their core strengths. Outsourcing is actually a derivative of that philosophy. Outsourcing has received a bad rap, largely because it is perceived as an end-run around taxes, unions and a host of bothersome government regulations. The fact, however, is many companies outsource so that they can concentrate on core competencies.

This begs the question, “How do I know when and if I should outsource?” What follows are three indicators that outsourcing will benefit your enterprise.

1. Excessive time spent on issues unrelated to your core business

Clearly, time and money would be saved by outsourcing the print and mail functions. By doing so, you avoid the cost of equipment and expertise associated with managing your own print and mail. You avoid adding staff to man the print and mail operation. You avoid the inevitable problems of maintenance and the eventual need through obsolescence to replace costly equipment in the future.

Remember, XYZ Company makes widgets. XYZ Company doesn’t benefit by going into the print and mail business.

2. Escalating costs in a specific business function unrelated to the core business

I would argue that outsourcing the collection of account receivables would be a better alternative to increasing payroll costs. Again, XYZ’s core business is the fabrication and sale of widgets. It is not a collection agency. As the owner or CEO, you may want to consider using the services of a factoring firm. Not only would this reduce staffing requirements, the potential to increase the cash flow of your business is high. If you would like to see the impact of factoring, you can use this free invoice factoring tool to see the merits for yourself.

3. Your business has never undertaken a cost/benefit analysis

These are simplistic examples and scenarios, but they do put outsourcing considerations on the radar, which is exactly where they should be.

AndrewAndrew Cravenho is the CEO of CBAC LLC, an innovative invoice financing exchange. As a serial entrepreneur, Andrew focuses on helping both small and medium sized businesses take control of their cash flow. Prior to CBAC, Andrew founded an annuity financing company relieving tort victims of financial hardship.

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