4 Growth Potentials Outsourcing Services Will Bring To Your Business
Without continual growth and progress, such words as improvement, achievement, and success have no meaning…
– Benjamin Franklin
The major goal of any business is to grow by generating larger profits, expanding its workforce, reaching out to new markets, and increasing production on a continual basis. The ability of an organization to achieve this goal is known as its growth potential.
There are several factors that an organization’s growth potential is heavily dependent on, such as, the expectations of success by its leaders and its other team members along with qualitative and quantitative measures used to determine readiness for expansion. This can be gauged better by determining the organization’s plans for the future such as its movement into new markets, the development of new product lines, the employment of more effective marketing techniques, and streamlining business processes through various methods such as outsourcing selected business processes to third parties. So how exactly does an organization increase its growth potential by outsourcing services from vendors?
— Verdantix (@Verdantix) July 11, 2014
Outsourcing Services Increases Your Bottom Line
As a business owner, the goal of reaching your maximum earning potential is a given. You might think that becoming a “solopreneur” is the way to go if you want to save up on your ever-increasing costs. For a stagnant business, that may be true but not for any growing business. As it grows, so do the tasks and responsibilities that must be handled well. The chances for growth are slim and eventually, you will burnout.
Consider this case study:
Ann, a small business owner who owns a food truck business, is great at cooking and loves what she does. People rave about her food and come from all over just to get a sample of it. However, she’s a one woman show. She does everything from preparing the food to cooking and serving the food, not to mention cleaning up afterwards. She’s unable to serve as much food as she can because of her obviously limited manpower. Thus, her growth potential remains stagnant. As is, her average daily profit is $500.
One day, she decides to get an assistant for $10 per hour for 10 hours a day. With an assistant around, she’s able to prepare, cook, and serve more food to her customers and is able to nearly double her average daily profit with $900. After subtracting $100 to pay for her assistant, she’s able to take home an average of $800, a $300 increase from her former average daily profit.
By outsourcing some of her administrative tasks that need to be done, but not specifically done by her, she is able to increase her productivity by around 80% thus, increasing her bottom line as well. Ann soon realized that if she wanted to grow her business, she had to let go of her total control of the business and start delegating tasks to other people and carry some of her workload.
Outsourcing Services Expands Your Workforce
A growing business means having a growing network of clients which, in turn, means having a growing number of responsibilities. There may come a time when you, as a business owner, need to consider outsourcing some of these responsibilities to other people. When you can no longer seem to handle the day-to-day operations of your company and have exhausted the potential of your current manpower, that’s the time to consider outsourcing.
The types of tasks that are generally outsourced can be summarized in three categories:
1. Highly skilled tasks
Accounting is considered as a highly skilled and meticulous task. You may not need a full-time accountant but you will need someone to make sure that your books are in proper order from time to time.
2. Highly repetitive tasks
These are usually the administrative tasks such as accounts management, data entry, so on and so forth.
3. Highly specialized tasks
There might be projects wherein you’ll need expert IT support but have no need of one full-time.
All these tangential processes can and are recommended to be outsourced. Take note that not all tasks should be outsourced. Make sure to identify your core competencies and keep your research and development processes internally done. If you’re business is focused on product design, keep all design-related tasks internally.
Outsourcing Services Reaches Out to New Markets
A business that aims to achieve its maximum growth potential needs to look at new markets in which to expand. According to a newsletter from Statestreet, Japan’s financial services outsourcing market is rapidly evolving. Many Japanese asset management companies that have overseas units have begun to expand their overseas staff in preparation to seek out new clients overseas.
It is an inevitable trend. One which has only begun to take shape recently when the previously perceived barriers such as local language requirements and lack of investment management experience have been overcome through technological advances and the development of well-trained in-house teams staffed with industry veterans.
Outsourcing middle and back-office functions have enabled these businesses to cut relative costs and ease seasonal business fluctuations paving the way for the further development of their services.
Outsourcing Services Increases Your Production
A business cannot grow if its production remains stagnant. This usually happens when a business gets bogged down by administrative tasks which hampers the growth and development of the business’ internal team.
Let’s assume that a business has an online tool product. This product will not sell itself therefore, it needs to have sound marketing strategies to back it up. If that product is unable to generate enough market interest, there is little chance that it will improve and its marketability will simply continue to decline. If that business’ forte is to develop online tools and not in marketing, how long do you think will their efforts bear any fruit?
By outsourcing a vendor that specializes in marketing online tools, all the business needs to focus on is to improve the production , development, and expansion of their products. They can even hire a commission-based marketing team. This will further save up the business’ costs as the marketing team will only get paid based on their performance.
There are many ways businesses can realize its growth potential but none more flexible than outsourcing services. Although there are risks, outsourcing ultimately offers business owners a lot of advantages. It’s a process that allows a business to build a team of skilled professionals without adding the expense of full-time employees. A business’ growth potential can best be maximized by focusing one’s time, attention, and resources on the business’ core competencies while letting contracted professionals deal with everything else.