Most small- to mid-sized business owners have considered outsourcing at least some of their responsibilities and internal needs, like their accounting, marketing, or IT needs. That’s because outsourcing, at its most efficient, can help you get more results, free up your time, and in many cases, even lower your costs.
For example, with managed IT services, you could completely forgo the need for an in-house IT team and save money by preventing expensive problems (thanks to the experience and insight of your service providers).
But while outsourcing can be a powerful way to boost the potential of your business, there are also “wrong” and inefficient ways to approach it. If you want to make the most of your outsourcing strategy, there are some important principles you’ll need to follow.
Choose the Right Partners
Most of your outsourcing success will depend on your ability to choose the right partners. Assuming you know what you need to outsource, a good provider will exceed your expectations, while a lackluster one may force you to go back to the drawing board.
When vetting partners, consider the following most important areas:
- Expertise and experience. How experienced is this provider? Have they been doing this a long time? Either way, are they used to handling clients like you, or have they mostly focused on different industries? Generally, the more experienced the provider is, the better.
- Cost and quality of service. Many business owners consider cost to be their biggest priority—they don’t want to spend too much on outsourcing, or they’ll instantly negate one of the biggest advantages of outsourcing in the first place. However, you must be careful here; in many cases, cost correlates with quality. Paying less for a service provider could leave you with a lower quality of service.
- Communication and collaboration. You need a partner who’s easy to speak with, and someone who will work to understand your business’s unique needs. You need someone you can call or email and get a near-immediate response. Otherwise, you might be forced to deal with the issues that inevitably come up completely by yourself.
Know Your Own Strengths and Weaknesses
It’s important to acknowledge your business’s own strengths and weaknesses before you decide to outsource. Part of this should be easy; if you’re outsourcing some component of your business, it’s likely because it’s a weakness for one reason or another.
But you’ll also need to take this a step further. For example, let’s say you’re about to outsource your marketing needs, but for the past several years, you’ve had multiple failed campaigns. What is it about these campaigns that eluded you? Are there areas of success or strength you could capitalize on? These considerations can help you partner with an external provider more efficiently, choosing a better partner and collaborating with them more seamlessly.
Shop Around and Negotiate
There’s no shortage of business service providers out there, so spend some time shopping around. Don’t go with the first consultant or agency you come across. Have multiple conversations, and see if different providers all seem to be saying the same things. Compare their prices against each other, and dissect the exact services they’re willing to offer your business. Once you’ve narrowed down the field, don’t be afraid to negotiate; in many cases, you can get a better package or a lower price just because you asked for one.
Set Expectations Early and Clearly
If you have specific needs, or if you want the work to be done in a certain way, make sure you set those expectations upfront and unambiguously. For example, if you want there to be a weekly update meeting, make sure you state that before you finalize the contract. If you want to make sure your new accounting service providers organize your work in a specific way, tell them. The clearer you are, and the earlier you introduce these expectations, the more likely they’ll be followed.
Address Potential Issues Proactively
No partnership is perfect. Eventually, you may find a point of contention with your outsourced service provider, such as a mistake in their work or an inconsistency in their communication. If and when this happens, address it directly and proactively. Explain what went wrong from your perspective, and ask them to take corrective action. In most cases, this is a learning opportunity that stands to make the partnership stronger.
If you’re outsourcing an entire department or some other major element of your business for the first time, you might be hesitant to pull the trigger; after all, a misplay here could end up doing more harm than good. But as long as you pay attention to these fundamentals, and you do your due diligence on all your outsourcing providers, you should end up with positive results one way or another.