Use outsourcing to reduce your costs and increase efficiency

Being your own boss and running your own business provides the ultimate in freedom, but it brings plenty of challenges. There are new competitors entering the market all the time, and customers are better informed than they have ever been on the choices open to them. Business owners are faced with a constant battle to both improve their products or services and to keep operating costs to a minimum.

An effective, yet often overlooked, way to achieve the latter is through outsourcing. When the strategy first hit the headlines in a big way in the 1990s, it was met with suspicion, largely because, when pursued by major corporations, it inevitably meant reduced headcounts and layoffs. However, the strategic benefits, for businesses of all sizes, are irrefutable.

Cutting costs

Employing staff costs money, and it goes way beyond the salaries. There are also recruitment costs, admin costs, training and development expenses and the raft of benefits you have to pay out. Also, keep in mind that the more staff you have, the more office space and equipment you are going to need.

Outsource your non-core functions, and these costs evaporate, to be replaced by a known monthly charge. Not only is it more cost-effective, it also makes the budgeting and forecasting process far more straightforward.

Improving quality

Outsourcing 101 states that you focus on your core activities and skills, and outsource the rest. Inherently, this makes sense. Unless you are a catering company, you really don’t know much about catering – so why employ a catering team when you can place it in the hands of people who are expert in this field? Another example is IT. Ten years ago, most businesses had an IT department, whether it was a team of staff or a single individual.

But when you look at a website like this one and see the levels of skill and expertise a professional third party can bring, it becomes clear that this is something with which an in-house team simply cannot compete.

Increase efficiency

The other benefit that comes of outsourcing non-key functions, particularly ones like IT, is that it is an enormous weight off the shoulders of the management team. The IT system is very much the lifeblood of a modern organisation, so it needs to be given priority attention.

Choosing the right software systems, backup regimes, user interfaces and all the rest can have a significant impact on the bottom line at the end of the year. A third party provider who is an expert in the field can make the right calls, whereas a business owner might spend weeks fretting over what choice to make – and then make the wrong one.

Outsourcing is one of the most valuable strategies for cutting costs, increasing quality and enhancing operational efficiency in organisations, and makes every sort of sense, whichever angle you approach it from. Keep it in mind as a way to ensure your business stays competitive in these challenging times.

Join our newsletter

If you like Critical Financial, subscribe and get our latest content via email.

Powered by ConvertKit

Share this post:

Leave a Comment

*

May the 4th Be with You: Star Wars Swag on Amazon

May the 4th Be With You: Star Wars Day Swag

It began as the punniest holiday ever but quickly grew into an earnest (if somewhat random) celebration of the long-running (and still... more →
People count the money to buy a house in future success.

Avoiding Mortgage Scams: Don’t Fall for Unreasonable Promises

If it sounds too good to be true, it probably is. That’s sound advice for almost all aspects of life, including the search for... more →
Eat for free for a whole month via the meal kit companies discounts for new customers.

How To Get a Month of Free Food: 9 Meal Kit Companies Offering Discounts to New Customers

Play your cards right and you might be able to line up a month’s worth of free meals if you were to try out all nine of the meal... more →
Generate extra cashflow -- here are 97 ways.

96 Awesome Ways to Generate Extra Cashflow

Who doesn’t want more money nowadays? We’ve got you covered on that front. Here comes a long list of different ideas on... more →
Valentine's Day gifts that won't destroy your budget

Valentine’s Day Crafts Are Romantic Rescue from Crazy Inflation

Fall for the hype this week and you’re out an average of $143.56 for Valentine’s Day. Crafts and other do-it-yourself tactics... more →

Ultimate Guide to Bitcoin — FREE Ebook!

Have we got something for you: a free ebook about bitcoin! more →
Get a flu vaccine.

Why You Need To Get a Flu Vaccine Right Now

Flu vaccines aren’t just for the elderly  anymore. Here are 25 reasons you should go get vaccinated. more →
Financially successful

Acquire the Trait All Financially Successful People Have

Financially successful people tend to all have a lot of self-discipline. Improving your discipline in one area of your life often spills... more →

What’s the Best Free Recipe App?

The Apple Store and Google Play together offer more digital cookbooks than you probably have room for on your mobile device. So which... more →
New tax law might slow down housing market.

What Will the New Tax Law Do to the Housing Market?

The new tax law will have a profound impact on the housing market, although in ways that go beyond the deductibility of mortgage interest... more →

4 in 5 Households Will Get a Tax Cut in 2018

Four out of five U.S. households will get a tax cut as a result of the legislation that President Donald Trump signed into law today. more →
Will bitcoin reach $100,000?

When Will Bitcoin Reach $100,000?

Bitcoin has accelerated its pace of appreciation in recent months, and if the current levels between $15,000 and $19,000 make you itch... more →
The Dow Jones topped 24,000 -- now what?

The Dow Jones Crossed the 24,000 Threshold. Now What?

Stocks appear to be increasing in volatility, yet the markets closed on Monday, December 4 with the Dow Jones Industrial Average is... more →
Peer mortgage

Should You Get a Peer-to-Peer Mortgage?

If you can’t get approved for a home loan from a bank, you might want to look into applying for a peer-to-peer mortgage. more →
Investment gifting is awesome.

4 Things To Know Before You Donate an Investment

While donations of any kind are appreciated, gifting investments benefits both the giver and the receiver. Here are four key things... more →
Are you wondering: What's the Relationship Between the Stock Market and Federal Debt?

What’s the Relationship Between the Stock Market and Federal Debt?

Wouldn’t it be wonderful if gains in the stock market could actually reduce U.S. government indebtedness? If that were true,... more →
how to use craigslist, searchtempest like a pro

How to Use Craigslist like a Pro

I’ve been using Craigslist for the past decade. I’ve probably made 50+ transactions and everything has gone off without... more →