Pros and Cons of Outsourcing when Starting a Business
Some of the current popular advice for would be entrepreneurs says that outsourcing
everything but your core operations is the best and easiest route to business ownership.
Like most other advice, this idea comes with its own set of pros and cons. Before
you take the leap into outsourcing, be sure to understand exactly what it really
means to you and your business.
Outsourcing Pros
Outsourcing non-core competencies does have its advantages. If you do not have to
spend your time handling the accounting or managing your website, your full time
and attention can be on the actual operations of your startup. If you are lucky,
the professionals you outsource to will work hard for your business and help you
grow. Outsourcing can be a valuable money-saving alternative to hiring and dealing
with staff, and can provide an alternative perspective on what and how your business
is doing.
Outsourcing Cons
The downside of outsourcing revolves around one critical point -- abdicating control
of your business. One of the significant advantages of entrepreneurship is taking
control and responsibility for your own work life. Often, business owners hand off
a task to an outsource professional and trust them implicitly to do the right thing.
But every business includes nuances and details that need to be addressed through
every aspect, and it is unrealistic to expect every outsource professional to know
and understand those specifics on their own. In addition, without taking a proactive
position in monitoring outsourced tasks, you can easily become a target for unscrupulous
practices -- overcharges, underperformance, even theft.
What to Do?
Clearly, entrepreneurs need a way to enjoy the advantages of outsourcing non-core
tasks while avoiding the potential problems. The first step is to check your attitude--be
sure you are looking at outsourcing as a supporting role in your business. That is,
you must maintain a sense of responsibility and the control of a manager over the
work that you pass off to others. This means that you need to understand the fundamentals
of every business task and how it relates to and affects your business before you
outsource. You need to identify precisely what it is you want the outsource professional
to handle and a method for evaluating their performance. You need to work closely
with the outsourcer to develop useful reporting procedures so that you can keep up
with what they are doing, and when and how it is getting done.
The fundamentals of entrepreneurship require more than a passing familiarity with
business basics. Whatever your particular operations, you are ultimately in the business
of business and, as the owner, you are ultimately responsible for everything that
occurs in the name of your venture. Making a choice to hand off core business tasks
without thoroughly understanding the purpose, procedures, and impact is a critical
but common error among new business owners.
Going out on your own provides a freedom and autonomy that just isn't found by working
for someone else. Your success rises and falls on your own actions -- a reality that
is motivating for some and overwhelming for others. By taking the time to hone your
fundamental business skills before you launch, you can make informed choices about
what tasks you outsource and to whom. You will still be responsible for the outcome,
but you will also have the knowledge and skills to maintain control over the work
product of everyone involved in your venture...even outsourced professionals.
About the Author
LaunchX.com is dedicated to training entrepreneurs to turn their good ideas into
great companies. The LaunchX System provides step-by-step education in the mindset
and skill set entrepreneurs need to succeed. Our program includes intensive seminar
training, key business software, and specialized workbooks that teach you the fundamental
skills you need to achieve your financial and worklife goals through entrepreneurship.
Register today for our introductory course and see what LaunchX can do for you!
Contents copyright © 2009-2011 by LaunchX LLC. Permission granted to reprint this
article in its entirety provided that the “About the Author” section and all hyperlinks
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