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Drive Growth: Outsourcing Non-Core Competencies

Hey there! I get it; running a small business can be tough. There are so many responsibilities and tasks to juggle it can be overwhelming. One thing that could really help is outsourcing. By outsourcing non-core functions like accounting, IT support, customer service, and marketing, you could free up a lot of time and resources to focus on what you do best. This could lead to enhanced productivity, efficiency, and overall business performance. In this article, we'll take a closer look at outsourcing and how it can help small businesses drive growth and stay ahead of the competition. So, let's get started!


Benefits of Outsourcing for Small Businesses


Outsourcing is becoming more and more popular among small businesses these days. It's a great way to optimize operations and grow your business. By trusting specialized professionals or agencies with specific tasks, small businesses can benefit from many advantages. Here are some of them:


Cost Savings and Increased Efficiency


Outsourcing is a cost-effective solution for small businesses. It can help you reduce overhead costs associated with hiring and training full-time employees. Additionally, it enables businesses to benefit from economies of scale, as external service providers can often offer their services at a lower cost due to their expertise and infrastructure. This can result in significant cost savings and increased operational efficiency for small businesses. (I am all about efficiency!)


Focus on Core Competencies


This is the one! One of the biggest advantages of outsourcing is that it enables small businesses to focus on their core competencies. By delegating non-core functions, businesses can redirect time, energy, and resources to their competitive advantage. This enhances the quality of the core product or service while enabling businesses to stay ahead of the competition by continuously improving and innovating.


Access to Specialized Expertise


Outsourcing provides small businesses access to a vast pool of specialized expertise and knowledge. External service providers are often industry experts with extensive experience in their respective fields. By outsourcing, small businesses can tap into this talent and benefit from the latest industry trends, best practices, and technologies.


Scalability and Flexibility


Outsourcing offers small businesses the flexibility to scale operations up or down based on current needs. Whether it's seasonal fluctuations in demand or sudden growth opportunities, outsourcing allows businesses to adapt quickly without significant investments or long-term commitments. This flexibility ensures that businesses can meet customer demands efficiently and minimizes the risks associated with overstaffing or underutilization of resources.


Enhanced Risk Management and Compliance


Small businesses face various risks and compliance challenges, especially in highly regulated industries. By outsourcing certain functions, businesses can transfer some of these risks to external service providers with specialized knowledge and experience in dealing with compliance matters. This reduces the risk of compliance violations and allows businesses to focus on providing high-quality services without getting bogged down by administrative tasks. (I'm married to an auditor -- can you tell?)


Improved Customer Service and Satisfaction


Outsourcing customer service functions can significantly enhance the overall customer experience and satisfaction. Small businesses can partner with call centers or virtual assistant services to handle customer inquiries, complaints, and support requests. These external providers are often equipped with advanced technologies and trained professionals who can provide prompt and efficient customer service. By outsourcing customer service, small businesses can ensure that customers receive timely responses and resolutions, leading to increased customer loyalty and word-of-mouth referrals.


Outsourcing is a game-changer for small businesses looking to focus on core competencies and grow. This strategic move allows businesses to streamline operations, improve productivity, and stay ahead of the competition. But, it's crucial for small businesses to carefully consider factors such as cost, reliability, and compatibility when choosing outsourcing partners.

Finding and hiring reliable outsourcing partners

When it comes to outsourcing, you need to find and hire the right partners to make it work. Here are the steps small businesses should take to find dependable outsourcing partners who can help them grow and succeed:

  1. Figure out what you need: Before you start looking for outsourcing partners, be clear about your goals, project scope, and requirements. This will help you find partners who can meet your needs. Do you require only quarterly tax support, or do you also need help with payroll and financial statement management? The answer will determine what type of service provider you really need.

  2. Do your research: Research potential outsourcing partners and consider their experience, expertise, reputation, and client testimonials. Shortlist a few partners to compare their offerings.

  3. Check them out: Evaluate the capabilities and compatibility of each potential partner. Consider factors like team size, technology, quality of work, and cultural fit. Choose partners who get your business and can work well with your team.

  4. Ask for proposals and samples: Request proposals and samples to understand their approach, methodologies, and work quality.

  5. Do your due diligence: Conduct interviews (and possibly background checks or at least online presence) to ensure reliability and professionalism.

  6. Negotiate the terms: Once you find the right partner, negotiate contracts and service agreements that outline the work scope, timelines, pricing, and other terms and conditions. Make sure it is a win-win situation for all parties involved -- this will ensure a healthy reciprocal relationship.

  7. Keep the communication flowing: Set up clear communication channels and protocols with your outsourcing partners to ensure smooth collaboration and updates. Regular meetings, progress reports, and performance reviews can help build trust and accountability. External service providers are often experts, but that doesn't mean that they will intrinsically know your vision for your business - clear communication is key to this (and any) relationship!


Following these steps will help small businesses find dependable outsourcing partners who can help them achieve their goals. Remember, outsourcing is a long-term partnership, so regular communication and collaboration are key to success.

Key metrics to track when outsourcing

It's important to keep track of some key metrics to measure the success of outsourcing non-core tasks. Here's a list for you to consider::

  1. Cost Savings: Let's be real; one of the biggest reasons to outsource is to save on costs. Keep an eye on how much you're actually saving by outsourcing and take into account things like reduced overhead costs, increased efficiency, and economies of scale.

  2. Quality and Accuracy: You'll want to make sure that the tasks or services you're outsourcing are being done well. You can measure this through customer feedback, error rates, or performance evaluations. A high-quality marketing or content partner will speak your language and feel like a natural conversation in the marketing efforts. Make sure they are accurate and get to know you for optimal quality (and time savings).

  3. Turnaround Time: Time is money, so it's important to keep an eye on how long it takes for tasks or services to be completed. Make sure that they align with your expectations and requirements.

  4. Customer Satisfaction: If you're outsourcing customer-facing functions like customer service or tech support, you'll want to keep track of customer satisfaction levels. You can do this through surveys, feedback forms, or Net Promotor Score (NPS) ratings.

  5. Employee Satisfaction: Outsourcing can also impact your internal team, so it's important to measure their satisfaction levels. This can be done through surveys, feedback sessions, or retention rates. IT and other maintenance are great areas to outsource that often have an impact on employee satisfaction. Consider internal and external benchmarks when outsourcing these functions.

  6. Growth and Revenue: Ultimately, the success of outsourcing should be reflected in business growth and revenue generation. Keep an eye on key growth indicators like increased sales, new customer acquisition, or market share growth.

By tracking these metrics, you can make data-driven decisions to optimize your outsourcing strategies. Regular monitoring and analysis of these metrics will provide valuable insights into the impact of outsourcing on various aspects of your business.

Pitfalls to avoid when outsourcing

When it comes to outsourcing for small businesses, there are definitely some things to keep in mind. Here's a list of things to watch out for:

  1. Lack of Clear Objectives: Be clear about what you want to achieve. You don't want any misunderstandings with your outsourcing partner.

  2. Poor Communication: Effective communication is key. Set up clear channels and stay in touch regularly. Let me say it again -- COMMUNICATE.

  3. Insufficient Due Diligence: Do your homework. Check references, credentials, and capabilities. You don't want to end up with poor-quality work or missed deadlines.

  4. Overlooking Data Security: Keep data security in mind. Make sure your partner has good security measures in place. You don't want to risk a data breach or legal trouble. Having a trusting IT partner can help with security as well.

  5. Lack of Flexibility: Stay flexible. Adapt to changes and be open to suggestions. A lack of flexibility can get in the way of success. Virtual assistants and other outsourced administrative tasks are often best if given clear objectives then left to their own devices. Give your partners space to do what they do best.

  6. Overreliance on Outsourcing: Don't rely too heavily on outsourcing. You still need to maintain some internal capabilities. Overreliance on outsourcing can lead to loss of control and limited growth.

By being aware of these potential pitfalls, you can make outsourcing work for your business and have a successful partnership with your outsourcing provider. Just remember to approach outsourcing as a strategic decision and manage the process carefully!


Embracing Outsourcing for Small Business Growth

Outsourcing can be a game-changer for small businesses looking to boost their performance and stay competitive. To make the most of outsourcing, it's important to choose the right partners and monitor the results regularly. So why not start exploring your outsourcing options today and see how you can enhance your business operations and drive growth?


Be on the lookout for a follow-up on where to delegate and who can help you out!


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