WAYS STARTUPS CAN LEAP FORWARD
WAYS STARTUPS CAN LEAP FORWARD
In the present world, many startups see offshore resourcing to reduce operational and final costs irrespective of the technology in place. Before going into details of how startups can reap the rewards from offshore outsourcing, let’s take a brief look at what outsourcing means.
What Is Outsourcing?
Outsourcing can be described as the process where companies engage a third-party organization; it can be locally or internationally. This third-party organization will handle any business activities in which they are being asked to do. This is a perfect approach and a widespread business practice among tech companies. Today, most of the startups out there are looking for the best solutions to their daily needs and working with an offshore team looks like a wise decision to make.
The areas that’s can be outsourced are limitless. However, during a startup stage of a business it is vital to keep your costs down while giving your full energy to the core part of the business. In order to do that it is also important to identify which areas of the business can be outsources to take the burden off and costs down while increasing the productivity up.
Smarter business areas to outsource
Accounting and Finance Services are two of the most popular outsourcing functions in businesses. These functions are vital to any business regardless of their core activity. This is where a business can be smart about their costs. Accounting and finance functions are highly adoptable to have remote working staff. With the rise and ever so popular accounting IT software also making this task even more easy and transparent. By making the decision to outsource these functions not only will save costs but it would also be a very smart step towards growth of the business while highly qualified offshore staff working for you to provide the accounting and finance services you require.
Human resource function can be one area where a business can explore to get outsource company’s help. Outsourcing some of HR functions involve hiring offshore companies to help manage personnel functions, which includes compliances, administrative tasks, company and employee benefits administration, employee’s compensation, retirement plans are just to name a few. Outsourcing HR functions help reduces the fixed cost of managing your employees as these HR firms are more efficient because they have the talent, also they are equipped with many important infrastructures. Startups can save both time and money by outsourcing HR functions and they will be able to offer good benefits to their employees.
Marketing function of a business is another area where a company can benefit from outsourcing. It wouldn’t be an overstatement to say digital marketing has become an entire world of its own and it is taking over the world. When the core business focus is not in this particular field, it will be a very challenging task to master the art. As a startup, investing in digital marketing will be a very good decision to make, so you can either outsource partially or completely. Digital marketing and advertisement help increase your brand awareness, traffic, customer engagement and sales. Starting a digital marketing team in-house requires time and money, you will need to build a big team, you will need experts in content, strategy, lead generation, branding, ad campaign management, SEO and many more. The best approach is to outsource to a full-service digital marketing agency.
Customer service work is one of the most time-consuming tasks in an organization. They must interact with your customers from time to time, answer questions and get feedback. Regardless of the startup you are trying to build, it will be very easy to find the right customer service firms that will make your business grow. Outsourcing this role will increase your presence online, have a good reputation and move your business forward.
Benefits of outsourcing in startup companies
Let’s look at some of the benefits that startup companies will experience when they decide to outsource some of their business functions to another company.
Reduced operating costs and expenses: Utilizing offshore resourcing can make you enjoy significant cost savings. Especially when you outsource to some countries that have lower production costs, what do we mean by lower production cost? This means a lower cost of living for your employees in that country, which means lower salaries, as well as lower infrastructure and operational costs. Other than on salaries, you can save on taxes, employee benefits, superannuation and many other overhead costs to accommodate employees inhouse.
Helps focus more on core activities: Instead of wasting time on some time-consuming process, it will be better off to outsource and focus more on core activities of your organization. According to a study, 18% of start-ups fail every year because of in-house knowledge gaps and inadequate skill sets that could easily have been avoided by outsourcing. A startup company can dramatically reduce its operating costs in areas such as accounting, marketing, IT and legal would help them to focus and invest on their core business processes.
Greater Competitive Edge: It is easy to lose some customers when the cost of the products you build is high, but when you outsource the services, the external provider cost structure and economy of scale will provide your organization with an enhanced competitive advantage. Especially in Australia, USA and UK the costs of living, cost of raw materials and cost of labor is very high. When a startup company (especially small to medium scale) operate 100% within their country, the products and services in turn end up being very expensive as well. When this happens, these small-scale companies must complete against larger companies (those already setup large scale outsourcing) who end up providing products and services in very low prices, small businesses to fail is inevitable. Current business fails in Australia are a good example of this.
Cultural Advantage: As it stands, every organization has a varying cultural inclination and various aspects of working. Hiring an offshore team will give you the needed exposure to different planning strategies amongst other organizational activities, and you can peek into different cultures of working. Often, this strategy turns out to be beneficial to firms, so do not underestimate the importance of cultural compatibility. Its result can be the key to elevating your business to the next level.
Outsourcing enables start-ups to reach some world class professionals and gives them the opportunity to leverage a global knowledge base. Some companies outsource to allow them to gain access to the new market areas, they can easily take the point of production and service delivery closer to consumers. Outsourcing helps organizations mitigate risk and this is one of the top reasons to outsource. It gives the startup companies an opportunity to access resources that might not be available internally when they start. Finally, in this present era, many startups are in a pole position to succeed and grow, and outsourcing is a crucial component in that organizational machine. Developing in-house talent may cost startup businesses capital and time; therefore, startups should learn more on outsourcing services that can help reduce some operational costs and push up their annual turnover. Offshore resourcing is and will be the best way to grow your startup in this era.