Outsourcing is the Right Answer - Right?
Posted on 1st May 2017 at 15:22
Well MAYBE would be my answer.
You are a soloentrepreneur with a growing busines? GREAT!
Up to a point cash flow and time have meant you could do most things yourself - book keeping, invoices, social media, admin (of various sorts) website. You might have sought the services of an accountant especially if you are a Limited Company or to help you with your tax return.
Then as you find your business doing better , your time needs to be spent on 'doing your thing'.
The thing that your business does. The service that it provides whatever that might be.
So what do you need to do?
Well find someone to do the stuff that really isn't your thing! Of course, that comes at a cost but that is OK as your cash flow is better and your time is now at a premium.
Outsourcing it is then. This is a great plan especially if you look at it with a business head on. So you will have an hourly rate .. you may not actually charge your time as an hourly rate but there will be one somewhere. You have to consider how much time you spend on doing your book keeping for example, as opposed to outsourcing it to a book keeper or virtual assistant, who will probably do it in half the time and charge you accordingly.
This is a great first step. The question is how long should you keep doing this for before you decide it is time to employ someone? Don't panic!! Let's have a look at the pros and cons of each shall we to help you get a view?
The great thing about outsourcing is that you have no responsbility to the outsourced resource, except to pay them for whatever work they have done for you. You can 'switch it on and off' as you need it, which is great if you have a seasonal fluctuation or using your accountant to do your set of accounts or tax return, for example.
By outsourcing you can spend your time doing the thing you are good at and which is likely to make you money and therefore profit.
The downside to outsourcing is that you generally have no control over the time when your work will be done, or the standard that it will be done too. Of course you can 'sack' the supplier with very little, if any recourse. We are often unwilling to challenge those who provide the service over the time it has reportedly taken, the standard to which it has been done and even how it has been done. This may lead to increased charges to get it put right especially if we weren't clear in the explaination initially.
SO what about employing someone then. Scary isn't it? Well not really but then I would say that woudn't I as people management is my thing!
Well the downside is that you will have responsibility for a somebody ( or somebodies) in terms of wages, national insurance (depending on how much they earn) pension and that responsibility of someone's livelihood is not to be taken lightly.
There are also legal responsibiiies under employment legislation and recourse if you get it wrong. Of course you can outsource the HR complexities to someone like me to help you get it right from the offset.
The pros of employing your own staff are many though. You have full control of what they do, when they do it, how they do and the standard by which you want it doing. It is also much easier to show someone how you want a task completing if you can sit with them and show them and not have to explan it over the phone or via email.
Once you have changed your mindset to that of 'The Boss', you will hopefully feel empowered to challenge if things are not right. Even if this does not come naturally, it never surprises me that employers will do it as it is their business and one that they have a vested interest in of course.
You will need to provide them somewhere to work although homeworking may be an option and provide them with the tools to do the job.
The other thing to be minful of is the amount of money you are spending on your outsourcing compared to what you can spend on an employee. The current rate of pay for an employee aged 25 plus is £7.20 per hour which you legally have to pay. Up to this age there are various minimum wage points that require legal compliance. On top of this is National Insurance (but there are some exemptions/allowances for small businesses) and a pension contribution if relevant. You might be pleasantly surprised at the difference.
So outsourcing is the right answer - right? Well it depends on your business, the work you need doing and how often you need it doing. It is worth sitting down to really consider all the factors as your business grows and if it would help to chat it through, you just need to get in touch.
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