The Changing Face of Small Business Outsourcing

The outsourcing industry has grown by leaps and bounds since its inception in 1970s. With internet, quality services at an optimal price could be sought across the globe. Even the smallest of businesses can seek to outsource work to up their productivity, optimize resources, and grow at a faster rate. Small Business Outsourcing is going through a major change and there are several factors that contribute to the change:

• Changed attitudes – a leaner business model: Although the effects of recession are now somewhat fading, small business owners are finding their hands tied behind their backs when it comes to resources and hence they want to optimize their time and money. 63% of small businesses are looking to reduce overhead spending to minimize their cash flow challenges, and 45% plan to reduce their in-house workforce. With outsourcing, they realize that they can free up a chunk of their resources at a fraction of the cost. For e.g., if you hire a staff accountant, there is a cost to company involved, but if you outsource monthly bookkeeping to a trusted vendor, you can get it done a lower cost and you pay for performance. What would you choose if you were a business owner?
• A deeper pool to swim in – Exploring each and every way to stay afloat: 59% small business owners feel that while coming out of the recession, the old way of doing business won’t work; they need to find new ways to take advantage of market opportunities. 72% small business owners say that they are looking for more efficient ways to operate. Businesses need to explore all ideas that can offer them chances of reducing overheads without hampering their productivity – outsourcing at a global level is among the most sought after strategy.
• Finding the right fit – Outsourcing to smaller players on the rise: The recession has not only lead to unemployment but also a lot of job insecurity. This has resulted in many professionals starting their own small businesses and consultancy firms. Small businesses today, would rather hire talent through an external professional agency than go into a liability of acquiring an employee. This creates a bigger, worldwide pool of talent to pick from based on factors like core competencies, price, availability, etc. In addition, many geographical factors are ruled out thanks to tools that help communication, collaboration, and payment via internet.
• Local vs. international talent – Get the best of all worlds: Outsourcing to countries like India, Philippines, etc., works well when you want the right skills at a cheaper price. Small business owners want their money to be spent wisely, and if a data entry processor in India can do a month’s work for what you’d end up paying a local vendor for a week, why not? At the same time, some aspects of the business cannot be outsourced to offshore vendors. Making that decision, of course, will be a crucial point.

The world is getting smaller and that works perfectly well for small businesses looking to outsource.

(Data Source: US Small Business Outlook 2010 Survey by Forrester Research)