There are a thousand little operations that must be carried out every day for any small business to stay in operation. But often those little tasks seem to have nothing to do with your actual business. Or at least, have nothing to do with your core product.
That’s why companies take outsourcing very seriously. They siphon off the parts of their business that don’t have anything to do with their core product, so they can focus on what they’re good at.
But knowing what to outsource can be a challenge in itself. You don’t want to lose control of any aspects of the company that are necessary to its central purpose. So what can be outsourced effectively?
Outsourcing your IT has almost become a cliche. Most businesses are now employing some form of outsourcing – and for good reason. One, their core product is not dependent on them having complete ownership and control of their systems. They can still deliver their product without any compromises by allowing somebody else to take over the running of their IT.
And two, it’s far more cost-effective. Running a traditional in-house IT set up, a la 1990s, costs companies a fortune in capital and maintenance. There was downtime galore and the tremendous cost of maintaining a full complement of IT staff, ready to pounce when something went wrong. Which, of course, it always did.
Now many have had enough and have moved over to an IT outsourcing nirvana.
Distribution is another one of those revoltingly complex operations that businesses struggle with. Every year, you devote a giant chunk of your company’s precious resources to managing suppliers and delivery. And every year you have to weigh up the pros and cons of managing your business’s distribution.
Relinquishing control over your company’s distribution can free up an enormous number of resources. No longer do you have to chase clients for payments. No longer do you have to keep abreast of all your resources in your inventory. And no longer must you capture and store data relating to your logistical activities.
This can all be done by a third party company, allowing you to get on with focusing on your core product.
Many new entrepreneurs loathe employing an accountant. Paying an accountant to file your taxes is like adding insult to injury. It’s essentially paying somebody to work out how much money you owe somebody else when all that other person does is make your life more difficult.
But having an accountant is virtually standard across all industries, especially if you employ people. That’s because accountants are a way of protecting yourself against the complexity of the tax code. It’s a minefield and one that the inexperienced can find themselves mired in, with serious repercussions. The tax man might make mistakes with your tax rebate every year. But he’s not ashamed of having double standards and coming down hard if you make a mistake on yours.
Rather than just seeing how much they cost, try to look at what accountants can save you. They save you time, which is important. But they can also make back more than their fees through tax-efficiencies and tricks to help you save money. And that’s why practically everybody uses accountants. They tend to be good value for money in the end and don’t detract from your core objective.