Use Outsourcing Carefully in Your Business Startup
Many people want to start a business because they have a particular skill that believe
can be turned in to a successful venture. They imagine that they will be able to
spend most of their time performing that skill, which sounds great because it is
something they enjoy doing. The reality is that once your startup is launched, you
are forced to play every role in the business, and less and less of your time is
spent on the actual operations. Of course, the obvious way around this is to outsource
all "non-core" tasks -- anything that isn't part of the operations.
In theory, outsourcing tasks to the professionals in specific areas makes logical
sense. After all, they are well-trained and experienced in those matters and will
do the best job of handling all of the accounting, legal work, website design and
maintenance, marketing, etc. according to their own skills. And, you will be able
to focus all of your effort toward managing the actual operations of your business
-- the tasks at which you are particularly skilled. Whether or not this is the best
choice for your business depends on a number of factors.
"Starting a business" can mean very different things to different people. For some,
they are referring to a basic self-employment situation -- just one or two owners
and a skill, no employees, and no particular plans for growth. For others, the ideal
business is a small firm with a few to a few dozen employees and slow, steady growth.
Then there are the entrepreneurs who envision growing their idea into a thriving
company with rapid growth and expansion, increasing from a few employees to a few
hundred over time. The vision that you have for your startup is an important factor
in whether outsourcing is a good choice for you.
One-man startups, or the self-employed, are the most likely to be looking to outsource
basic business functions. When you are on your own, your time is limited and better
spent doing what you do best. There is also limited risk in outsourcing core business
tasks as it is relatively easy to keep an eye on what your hired professionals are
doing for you. However, because your time is limited by virtue of working alone,
your cash flow also tends to be limited. Fees for outsourced professionals can add
up quickly, and many self-employed individuals ultimately find that they are better
off handling some or all of the business tasks themselves.
Startups with plans for growth or expansion typically involve more complicated internal
systems and they all require more attention, and more expertise, than in a microbusiness.
Outsourcing critical tasks seems like the obvious choice, but there are significant
drawbacks in turning over responsibility from the beginning. First, it is your business,
meaning you are ultimately responsible for the success or failure of the venture.
Second, no outsider is going to have the personal investment in your venture that
you do. Third, every aspect of a business affects the others, for better or worse,
and the only way to have enough information to make the best decisions for your venture
is to be knowledgeable about the details of every aspect.
If you do plan to outsource core business functions, you need to be well-prepared
to maintain control of your venture. The best way to prepare is to work through the
setup of every system yourself. If you need help, find a professional who will walk
you through the details. This is particularly important with the company's accounting
system. As the business owner, you must understand how every transaction is categorized
and how every decision affects the overall financial outlook. The same goes for marketing
systems. It is critical to understand what works and what doesn't in terms of reaching
your primary and secondary markets, what your competitors are up to, and what changes
are on the rise in the industry and consumer tastes. If you leave these details to
outsiders, you will have a very difficult time evaluating the options available for
moving your business forward. One of the principle responsibilities of entrepreneurs
is to gather and synthesize as much relevant information as possible to ease the
constant stream of decision-making required to succeed.
Outsourcing can be effective for preserving your time for more important or interesting
tasks. But as a business owner, it is absolutely critical that you maintain control
over the details of business fundamentals. If you aren't interested in handling the
financials, marketing, or any other core business practice within your business,
entrepreneurship may not be for you.
About the Author
LaunchX.com is dedicated to training entrepreneurs to turn their good ideas into
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