Is Outsourcing a Good Idea for Small Business?

The Definition of Outsourcing

In business terms, outsourcing is the practice of hiring third-party or external firms outside of a company to create goods and perform various services that were typically performed internally by the company’s own staff. This process has become increasingly popular over the years as it helps business owners concentrate on their primary and core responsibilities while leaving other operational tasks to third-party companies who specialise in those areas.

Can outsourcing save you and your business money?

While it may seem like a costly expense from the get-go, one of the main reasons why businesses engage in outsourcing activities is to cut costs. When a company outsources work for certain tasks, the compensation structures between their in-house employees and the outsourcing company will be different, which allows them to complete the work for less money. Ultimately, this results in lower labour costs and higher profits.

Common Resources Small Business Owners Can Outsource

According to a survey conducted by Medium, the most common job sectors that companies outsource include call centres, distribution, IT services, manufacturing, and R&D. However, those sectors are more applicable for bigger corporations and bodies. Here are a few things small businesses should outsource:

1. Content marketing

In this day and age, it is necessary for small businesses to tap into content marketing to promote their business in order to stay afloat and avoid being left behind. However, not all entrepreneurs are knowledgeable about what goes into marketing and how to produce engaging content for their audience.

Instead of spending your time learning the ropes from scratch, outsource a marketing team or content marketing manager that specialises in this area. By leaving this responsibility in the hands of professionals, it will ultimately help you build better relationships with your customers.

2. Bookkeeping

Whether it’s a small or bigger business, you will definitely have to deal with bookkeeping. Essentially, this is the practice of recording all of the business’ financial transactions as part of the accounting process. As your business grows and expands overtime, you may need to offload the bookkeeping responsibilities to an outsourced company.

With outsourced bookkeeping services, your business is in the hands of specialists who are not only highly skilled at their job, but also have access to the latest accounting systems and technology. It may seem difficult to give control of key business functions such as bookkeeping to an external firm, but this will benefit you greatly in the long run.

3. Payroll

Given the numerous tax laws, requirements, and regulations to comply with, outsourcing your payroll can be a huge load off your chest as a business owner. One may think that handling payroll is simply calculating salary payouts for employees. However, even one mistake can trigger tax audits, which can cost your business a great deal of money. Rather than handling it on your own, consider outsourcing your payroll to a reliable service or full-time accountant that can help you avoid costly mistakes.

4. Administrative Tasks

Scheduling and other administrative tasks typically don’t take up a lot of time. But when these little responsibilities accumulate to become numerous tasks, that’s when it will begin eating up a huge chunk of your time, which could’ve been allotted time dedicated to more laborious duties. By hiring a virtual assistant, you can say goodbye to wasted time spent on appointment-setting, emails, and other repetitive jobs.

How do I get started with outsourcing?

Now that you’ve discovered how outsourcing is a good idea for small businesses, the next thing you could be wondering is how to get started. The best way to begin is to first identify which immediate tasks you need help with. This can range from those listed above or other menial tasks including hiring, research, design, and writing tasks.

From there, you can then proceed to reaching out to the prospective outsourcing companies for the specific services.

Finding the Right Company

When it comes to heavier responsibilities that deal with finances like annual reporting and payroll, it may be difficult to find the right company to put your trust in when it comes to these confidential matters. With Aspire and Osome, you will be placing your business in good hands.

This partnership provides small business owners with incorporation packages that gives you access to a myriad of services from business account opening, company registration, company name reservation, accounting, bookkeeping, as well as tax filing. You can enjoy all of this and more starting from just S$280.

To find out more about the incorporation, click here.