Ten Tips For Outsourcing Your Business Activities
John Wade gives 10 great tips to help you to decide whether outsourcing should be an option for you and your business
Successfully growing a business is just the most amazing feeling. Achieving your vision, and enjoying the satisfaction of success, however you describe it, is superb motivation for continuing to work even harder, and grow even more. Those of us who set themselves up for success deserve a pat on the back, on top of the intrinsic reward of ‘being the boss’. However, when things aren’t yet successful, outsourcing might be an option.
Continuing progress presents any business-owner with one of the most difficult decisions to make – balancing managing the business with the need to find time for the rest of your life. When 60 hour weeks become the norm; if your spouse and friends take second place to invoicing; when you realise that living your life becomes secondary to working in your business. The question of expanding your business and needing others to help is a hard one to answer. And the pain of taking someone else on can be too much to even consider for some.
Yet it is a necessary step to growing your business. Done well, it allows you time to work on rather than in your business. Some incredibly successful business people strongly recommend taking time out to plan your future success.
Outsourcing is one option. Once the preserve of major businesses, outsourcing is a great way to grow your business without the pain of employing people. Yet outsourcing carries its own risks as well as its rewards. Getting it right is key.
So, our top ten tips for growing into outsourcing, based on bitter experience in some instances, include:
Essentially, it should be the stuff that can be done at a cheaper rate than your time – if you haven’t got someone else doing some of that stuff, then you’re doing it, and there will be experts who are less expensive – and more competent – than you, at that task
Specifically. Know exactly what you want doing, and define precisely the standards you expect. We recommend checking contracts, Terms of Business and Service Level Agreements to the nth degree, so there are no surprises.
Be sure the provider knows your business sector, and/or your specific requirements. It’s your brand they’re risking, after all. Make sure they know your trade or industrial or service sector. Whilst some outsourcers argue they bring a different perspective, play it safe, and hire knowledge and expertise.
After all, you’re outsourcing a job which you would otherwise hire someone in to do. So get recommendations; and be whose recommendations you accept – there’s at least one business networking organisation positively requiring its members to refer business amongst themselves, almost regardless of whether they have direct experience of their standards. It’s your business, and you’re responsible for hiring. No-one else. Which links neatly with…
Easy to say, you might think. Yet consider the cost to your reputation or brand if you go for cheap and it goes wrong. One client lost a £1M contract because the CEO was underwhelmed with the quality of the presentation, although he was impressed with its content. His view was that if the vendor couldn’t match the quality of his company, then he wouldn’t risk his business…
A verbal contract isn’t worth the paper it’s written on. Which is why you need to agree precisely what you want (1 and 2 above), exactly what you expect in terms of standard and price (5 above) so if there is a problem, you’re not caught. And include payment terms and reporting requirements, too – as we see next…
Like many relationships, things start well because people try hard; it’s later they take things for granted. Yet many businesses get this wrong – even ignoring it altogether. Try and get built-in compensation for poor performance – although you’re unlikely to get it!
What are you expected to provide to make the relationship work? What are you expecting back, and when? Finally, what triggers are there; what notice do they need to provide you with the work you want back. The purpose of outsourcing is to get someone else to fit with your requirements. Not you with them…
If the relationship works well, you may want more; and the converse is also true. Get them to tell you what you should expect
Remember why you’re outsourcing some of your work: it allows you time to concentrate on other stuff. The things you get paid for. Your business. Your spouse or children. Whatever the reason for outsourcing, make sure you get the benefit.
Having someone else do some of your work is liberating, exciting – and scary. You can mitigate all of those worries by following the above advice. There’ll be other more sector-specific issues you’ll need to consider, too. And not all outsourcing requirements are the same. You may need legal input. You may not.
What you do need is to make sure you get it right. Otherwise, you could spend more time managing their output or your relationship to get the real value out of this structure for growth.
This article was updated in March 2019
John founded OCCM in 2009, working with professional and financial service firms during his thirty+ year career in the sector. He works closely with senior management and business leaders; and coaches people, teams and firms in an organised, cohesive and effective way – building trust to produce results.
His successes include law firm turnaround; strategic planning; workshop facilitation; and conflict resolution. He also manages legal process and project management engagements.