The Pros and Cons of Outsourcing

Have you ever found yourself wondering why there can’t be more hours in the day? Even the most ambitious and tireless small business leaders still only have a finite amount of time and energy to funnel into their company’s operations. On the flip side, there are certain things that must happen for a business to survive and thrive. What is a business owner to do?

Outsourcing is one strategy that empowers business owners to ensure everything gets done without requiring them to have to do everything themselves. Keep reading to learn more about the upsides and downsides of outsourcing, as well as some examples of which small business functions you can outsource.

Potential Pros & Cons of Outsourcing

Like any business decision, nearshore outsourcing of certain administrative and operational tasks brings with it a slew of possible advantages and disadvantages.

Pro: Maintaining Complete Control

Keeping projects and tasks in-house gives the greatest degree of control possible, as you or an employee you trust personally will be handling the job. You retain complete control over the timeline and quality of the project, as well as any tweaks or updates it needs after completion.

Pro: Skill-Building

By outsourcing something in which you and your employees do not have expertise, you are forfeiting the chance to learn how to do that thing. Over time, this can lead to missed opportunities to build skills and specialties across your staff.

Pro: Lower Overhead Costs

As Investopedia outlines, one of the biggest boons of outsourcing is the potential to reduce expenditures.

For instance, say your budget doesn’t currently support hiring a full-time marketing employee at a competitive salary — but you need a campaign done in time for the next major holiday or you’ll lose out on valuable traffic. You can always hire a freelancer or agency to plan and execute the campaign for an agreed-upon fee that’s more amenable to your current budget.

Con: Diminished Communication/Control

There tends to be more pros than cons when it comes to outsourcing, but this one is a major: Your business ultimately gives up a large percentage of control over the task. It’ll almost certainly involve less communication with the contractor than if you were handling it in house where you could get daily — or even hourly — updates if needed.

What Small Business Functions Can You Outsource?

When outsourcing as a business strategy, we inevitably think about the types of tasks that are outsourceable in today’s landscape. As you can imagine, there are quite a few.

Here are some of the simplest business functionalities to outsource, from the U.S. Small Business Administration:

  • Administrative Duties: Part and full-time virtual sales assistants are available to offload tasks like email, scheduling, and more.
  • Accounting & Payroll: Depending on the needs of your business, you can outsource a wide variety of accounting tasks to a software program, firm or combination of the two.
  • Shipping & Returns: Drop shipping has emerged as an ecommerce strategy that outsources packing and shipping products altogether. 
  • Human Resources: Not at the point where you need a full-time HR manager? You can choose to outsource paperwork and onboarding to an agency.
  • Customer Service: External live chat and call centers exist to handle customer service inquiries in a professional manner.

This is by no means an exhaustive list of potentially outsourceable duties for modern businesses, nor did we cover every single pro and con worth thinking about. However, this overview of small business outsourcing can help you make an informed decision on whether or not to harness this strategy for your own company — and how to do so effectively if you go that route.

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