Why Outsourcing Is A Better Option to Grow More with Less Spent

Have you ever thought why some businesses succeed even if their initial business trajectory is slow or shaky but some super high-growth companies eventually fail to continue their success? Whatever the reason may be on the surface, at the heart of it there is failure to do capability sourcing. What this means for your business is that you need to continuously adapt and innovate towards growth and controlling costs at the same time. Expanding your number of shops or improving your online presence will most likely have a positive effect but unless you learn to grow without having to invest loads of money, there will always be a limit to your successes and always a chance that it won’t be sustainable. One of the easiest and most effective ways to ensure long-term success at a lower cost of growth is outsourcing. Let’s talk about that in today’s article.

Focus improves on revenue generation by streamlining operations

Non-revenue generating activities sometimes are not the best avenues for your precious resources. However, these auxiliary tasks such as payroll management or call center are as significant as core tasks like sales and product management. The point to note here is that while it may make sense to keep core and revenue generating aspects open for more growth expenditure, it is advisable to fix the spent on non-core and non-revenue generating activities. One way to overcome this is to let an external company take care of these segments on a fixed budget with pre-decided targets. That’s how outsourcing helps you to maintain your momentum and yet limit the expenditure at the same time

Outsourcing promotes growth with lower costs as a direct effect

So we have discussed the cost lowering potential of outsourcing models several times. For this article we will limit the discussion to how outsourcing promotes growth. To understand that, look at the extra costs that come with the direct costs of any department. For example if you have accounting employees within your company, their salaries and equipment costs are a given. But their additional benefits, sick leaves, lunch or tea expenses, and other overall utility bills of their working space are also unavoidable costs if you keep that department in-house. When you outsource such segments of your business, you not only limit direct costs but you also have more resources left to focus on revenue and growth generating activities.

Better privacy and operational control with fewer resources

While it may seem more enticing to keep everything in your own hands, there is an obvious limit to your business growth if you keep following this model. Sooner or later, if you wish to continue to expand your business, you will have to leave charge of certain tasks in others’ hands. Sometimes, especially with departments like finance and human resources, there can be problems within your employees if their interests clash or overlap. In these cases, a significant amount of time, effort, and sometimes even monetary resources are needed to be spent to smoothen out the workflow. As opposed to this if financial and payroll management is being done outside your core operations center, there is much better control over the processes as well as higher level of privacy, within the company as well as better protection from other market players, who cannot influence or bribe your employees to leak on the business secrets

Higher motivational levels of employees without additional monetary benefits

Continuing with the previous point, motivation levels and thereby productivity and efficiency levels of your employees can be the make or break factor in your business growth trajectory. You can provide them with all the benefits of comfort and luxury or have the strictest measures on attendance and work targets, if they are not sufficiently motivated, you will not get optimum results. One of the most common mistakes that companies make in motivating their employees is to feed them easy and mundane tasks thinking that since it’s easy and repetitive, employees will be happy.

While this may be true for larger, and technology intensive companies where the repetitive nature of the task does not translate into repetitive nature of an individual’s work. Smaller and growing companies however need to leave such mundane tasks to external outsourcing companies, who by the nature of their businesses have enough technical and professional room to keep repetition away. Your in-house employees, on the other hand, when faced with tasks that they know contribute to the company’s overall growth and are significant in nature, would be far more motivated, happy, and thereby productive, propelling your company towards higher growth.

Higher scalability and flexibility without investments or divestments

Being able to increase or decrease workload is not only important for businesses of a seasonal nature. In modern times, even a regular business may be faced with periods of expansion or contraction depending on the overall economic conditions of a country or a region. In such times, if there is a sudden increase in business activity, if you want to capitalize on that, you would need to buy more equipment, increase office space, hire more employees, and so on.

Now if the business cycle goes into a crunch, what would you do? Sell off extra resources and fire idle employees or continue to keep all resources unused and simply keep paying extra costs? A simple and cost effective way to maintain all scalability and no extra costs comes through outsourcing. You can add more services or reduce your expenses as and when needed without needing to disturb your workflow and without any extra costs.