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Should You Outsource? How to Decide and Get Started

Posted by Melissa Hollis to Accounting, Business

Outsourcing business tasks to save time

Recently, I heard from a group of successful founders on what they wish they knew before starting their businesses. Amongst the valuable and actionable how-to’s for today’s business owners, I came across one piece of advice that might actually allow them to breathe a sigh of relief (as opposed to adding another item on their to-do lists!).

“There isn't time to learn how to be an expert in every area of the business. Play to your strengths and specialize in one to two areas that you can do better than anyone else - then offload the things you aren't good at to fill your gaps.”
- Benji Hyam, Postable.io

It’s true, today’s business landscape has shifted from what was once a marketplace dominated by one-stop shops to niche services. This is a change for the better, as it allows experts to be expert founders instead of just a cog in the machine. Today’s entrepreneurs, startup CEOs and business owners often have many talents and unique ideas for businesses that solve problems. However, hiring a full staff to handle different aspects of running those businesses can be an expensive task.


As this trend continues, outsourcing just makes sense—especially for smaller firms and companies. In this two-part article, you’ll find what you should know before deciding to outsource different tasks as well as a checklist of all the specific processes you may need to establish once you do.

 

Part I: What You Should Know Before You Decide to Outsource

The internet is certainly a wonderful thing. It puts the information we need at our fingertips and allows us to share information with anyone located almost anywhere in the world instantaneously. What’s more, the internet allows professionals in a variety of industries and career paths to work from just about anywhere. 


According to an Elance survey in 2013, 78% of small business owners said that outsourcing certain tasks to freelance agents or agencies was more cost-effective and faster than hiring someone on-site. They also noted that they had access to talent they may not have otherwise found locally. Here are four questions to ask yourself when determining whether outsourcing is right for you:

 

1. Do You Have Experience with Marketing?

If you want your business to be successful, then people need to know that your business exists. To make that happen, you will need a website (that is both desktop and mobile friendly), a memorable logo that suits your brand, and a plan. Unless you understand the world of digital marketing, chances are good that you will not realize the best possible return on your marketing dollar investment.


Hiring someone to develop, design, and implement a digital marketing campaign on-site can get expensive quickly. There are many benefits to outsourcing your marketing tasks:

  • Your team can focus on your core business rather than the design and development of a website, the maintenance of a blog, or even managing social media platforms.
  • You will receive professional service from someone willing to implement effective strategies.
  • You can get an outsider’s perspective on your current marketing campaigns.
  • You can leverage a freelancer’s expertise in certain industries.
  • You can increase your ability to conform to trends and advances in technology.

2. Do You Have a Customer Service Team?   

No matter what kind of business you run, you will need a team of dedicated people who will take calls from people regarding your product and any questions they might have.


Although you could hire these individuals yourself, consider the benefits of outsourcing a customer service team:

  • Outsourced customer service agents already have access to telephone systems, computers, and desk space. This alone can save you considerable amounts of overhead.  
  • If you and your team are currently handling customer service, this takes away from your ability to focus on the core of the business and often means customers have to wait for a response. Unless your personal service is, in fact, the core value of your business, outsourcing frees up your time. It also improves customer satisfaction since they can get an immediate response.
  • Outsourced employees have often been fully trained on handling disgruntled customers and overcoming objections.

“You’ll wear many hats as a business owner, some may suit you and others won’t fit. You must outsource those jobs which are out of your capability.”
- Greg Hixon (GravyGrowth)

 

3. Do You Have the Time and Knowledge to Handle Accounting?

Let’s face it – accounting is by far one of the most tedious parts of running a business. It requires constant attention since it is the backbone of your business, and bookkeeping is not everyone’s cup of tea. Hiring a full-time accountant or bookkeeper is always an option, but unless you have corporate-level sales volume, it really isn’t necessary. In fact, there are plenty of companies out there that will handle all of your back office needs and help you grow without the headache of crunching numbers on your own.


There are plenty of reasons why you should always consider outsourcing your back office tasks:

  • Outsourced accounting companies and agents are fully trained to handle your books.
  • Avoiding in-house accounting takes stress off of you and your employees, allowing you to focus on more important aspects of your business.
  • Professional accountants can help you review and categorize all of your transactions, which could even help you catch bottlenecks and other problems with your revenue stream.
  • Some outsourced accountants (inDinero's for example) can handle all of your tax preparation and filing for you, which eliminates the need to pay a tax professional who knows very little about your company hundreds of dollars each year.

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4. Do You Have a Human Resources Department?

Finally, take the time to think about your employees. Chances are good that you are responsible for handling any issues that might arise with the people who work for you. If you are responsible for scheduling, payroll, hiring, firing, and other human resources tasks, then you probably aren’t spending enough time focusing on your business as a whole.


There are numerous reasons why you should think about outsourcing some, if not all, of these tasks:

  • Hours logged, payroll, and employee information is more accurate when handled by an HR professional.
  • Outsourced HR agents are unbiased when it comes to your employees, so they can often make better decisions when it comes to filling positions or recommending that you let someone go.
  • These agents can handle all of the formalities associated with bringing new employees on board, such as background checks, drug screening, and reference checks.
  • You’ll have access to technological advances that might cost you tens of thousands of dollars to implement on your own, and these allow you to delve into strategic analytics without a significant investment.
  • Do you know the difference between who should be considered a contractor and who should be an employee? These experts will.
  • You will spend less time putting ads in the paper or hosting interviews when you need new employees; outsourced human resources agents can handle this, too.
  • Outsourced HR employees can even help train your new in-house employees via video conferencing, email, and other online forms of collaboration.

As you ask yourself these questions, be sure to think about the potential benefits associated with outsourcing some of your business management tasks. Overall, doing so will save you money, time, and plenty of frustration along the way. It will also allow you to put your time and energy into the most important part of your company – the products and services you provide to your clients and customers.

 

(Psst! Check out this post with over 100 productivity tools and resources startups can use or outsource certain business functions to.)

 

Part II: Your Checklist for Outsourcing Best Practices

“For everything we don’t like to do, there’s someone out there who’s really good, wants to do it and will enjoy it.”
- Josh Kaufman

I wish I could tell you that once you outsource something it completely vanishes from your plate, but that’s not typically the case. In fact, if you don’t have the proper systems in place for managing your outsources vendors and freelancers, you could end up spending more time and energy tracking them down. That’s why it’s important to establish good procedures and clear expectations from the start.

This checklist outlines a few aspects of the working relationship you should establish when outsourcing a function or portion of your business:

 

Identifying Communication Styles, Preferences, and Protocols

Your communication expectations should be clearly set before you even begin to talk about a contract. In fact, while you are vetting each vendor, be sure to ask:

  • What is their prefered method of communication? Email, Phone/Conference Calls, etc.?*
  • How often will we meet to plan and strategize?
  • How often will we meet to evaluate performance?
  • When can I expect to get updates on their project progress?
  • Will these timelines be set from the start or will there be a ramp up period of high-touch communication that gets adjusted as workflow becomes more routine?

*Does your company use Slack or another chat tool?

If your vendors and freelancers are open to that level of high-touch communication, this can be highly productive. It can also instill a feeling of team-involvement. Just be sure you clearly understand and respect each other’s boundaries! (Here’s a great piece Fast Company did a on Slack best practices and etiquette.)

 

Getting Clear on Reporting Expectations

Results are key in any vendor relationship. Whether they’re long-term big picture goals or short-term benchmarks, you’re going to have goals or a desired outcome for these partnerships. Setting benchmarks and metrics for success is crucial, even when the relationship is ongoing, not just on a project basis.

  • What is their value proposition (aka what is the exact problem they’re solving)?
  • What will they report on?
  • How will we set benchmarks?
  • How will we choose our indicators of success?
  • What are some outside metrics we should be looking at?
  • What feedback will they need from us?
  • What data will they need from us to close the reporting loop?
  • What reporting systems do they use?
  • Do they have access to data reporting systems we are not using?

This goes hand in hand with communication, as communication is going to be the vehicle for how you see these key metrics. Agree upon the reporting systems or procedures and expectations as soon as you can and be extremely clear to articulate any changes when they come up.

  • What do they use to present results?
  • How often do they typically present results?
  • How customizable is their reporting across your clientele?

The idea here is to find a sweet spot. As the stakeholder, you’ll want to feel comfort that outsiders are making progress toward your goals but data overload can cloud decisions and your understanding. Keep the emphasis on key performance indicators (KPIs) and potential opportunities to improve your strategy.

 

Ensuring Efficiency with Project Management Etiquette:

Ultimately, most businesses justify outsourcing a part of their business with the idea that it will be more efficient. This is only true when a project’s lifecycle and roles are clearly broken down:

  • What phases will we track for each project?
  • How will project stakeholders be involved in the approval process?
  • Should we be tracking projects by timeline or results?
  • How will roadblocks be communicated and alleviated?
  • How do we define criteria for each stage of the process?
  • Does it make more sense to use tickets or assignments?
  • How will projects be broken into sub-action items and assignments?
  • How will projects be assigned? By phase? By role? By stakeholder?

Look for project management systems that make it easy to add new users/outside collaborators from within and outside the company. Trello is a great example of a free tool to do this. For more elaborate ongoing projects, Basecamp and PivotalTracker both offer features that make planning multi-assignment projects, assigning tasks, and even collaboration easy to do all in one system.

Basecamp stands strong as a scheduling tool for projects with multiple layers of development as you can build out stages and add files and one-off assignments to larger campaigns. PivotalTracker is built for agile project management so it’s very focused on timelines and delivery. What sets it apart, competitively, is its ability to track project progress (or “velocity”) against set deadlines and goals.

 

Encouraging Smooth Collaboration From the Inside Out

As an internal team member managing outside vendors, the biggest question you should ask yourself over and over is “What can I do to bring out the best work in these external contributors?”

Ultimately, these vendors will need or benefit from materials or information you already have. This could mean contract details, branding materials, product descriptions, and lease agreements to name a few examples. If you’re responsive and timely with feedback or your deliverables it should be easy to keep projects moving forward. As you embark on this shared journey, outline the ways you’ll share information:

  • What types of secure information will they need from us?
  • What are we allowed to disclose to third party vendors?
  • Do we have secure ways to transfer that kind of data or information to them?
  • Define what can be shared publicly and what needs to stay on lockdown (Set up a NDA or Non-Disclosure Agreement)
  • When will they need us to collaborate?
  • What will we need to approve?
  • What systems or tools will we use to share projects and provide feedback?

Some of the best tools for cross-user collaboration might already be right at your fingertips:

Really any cloud-based tool that offers multi-user access like Google Docs, Dropbox, Adobe Creative Cloud, Microsoft OneDrive can be used to collaborate. It’s common for businesses of any size to use at least one of these. Some specialty tools like Huddle, Podio, and Redbooth add in features built for team collaboration and stakeholder approval.

 

The Smartest Startups Start With Their Strengths

Delegate or outsource everything except the stuff you’re awesome at. It allows you to focus on the tasks you’re amazing at.
- Cameron Herold

When building a business you’re going to find roadblocks. Some of these are going to be learning opportunities for you to grow and become better at what you’re doing, but others will indicate that this is not something you should handle alone or at all.


As an outsourced accounting and tax provider, we often hear how much of a headache or distraction these back-office tasks can be for early stage businesses. Just take a look at this excerpt from our client interview with Wade Foster, Co-founder & CEO of Zapier:

“As much as Zapier’s founders loved running a company, accounting and taxes were not their favorite parts of the operation. After nearly two years spent getting things up and running between them, these duties were still on their plates and were getting more and more cumbersome. They were ready to get the back-office burden off their shoulders so they could focus on their passion—the business.”

Read more about Zapier’s story and Wade’s experience growing what started as a small app integration tool into one of the most recognizable B2B SaaS solutions in this case study.


When businesses outsource, they typically find they can dedicate more attention, and resources (time, talent, and budget) to the value they’ve committed to provide. Remember, everything gets more complex during phases of growth. Make sure you spend that time growing your offering instead of catching up with all the other moving parts going on behind the scenes. The earlier you outsource away ulterior time-sucking tasks, the sooner you can expand your core competency and revenue-generating offering.


How much of your future time will 30 minutes with a financial expert save you?

About the author
“Melissa

Melissa Hollis

Melissa Hollis is a content marketer and lover of all things West Coast. She enjoys waking up every day and getting the chance to rethink the obvious and enable the dreams of aspiring entrepreneurs.


Disclaimer: The inDinero blog provides general information about tax, accounting, and business-related topics. It is not intended to provide professional advice. Read more in our Terms of Use.