The economics of outsourcing | Money Hints

If you run your own business, it doesn’t make sense to take on each and every task within your company. It might seem like you’re saving money by doing everything in-house, but in fact, you really might be spending more time and money than you need to be by trying to find or train an expert within your company who just doesn’t exist. Outsourcing is an economically sound decision for many companies and it can help streamline the processes of your business so you can focus more on what you’re actually best at. It allows everyone within your company to shine in their areas of expertise, getting more done. And whether you’re an IR35 compliant umbrella company or a solo-entrepreneur, you’ll feel a great burden lifted when you choose to outsource, as you find that you don’t need to wear every hat in the company any more. So here are some tips for knowing when to outsource, and how to do it.

Look at the task

It’s very important to lay out the different tasks you need done in your business, and then to determine what can be done in-house and which should be outsourced. So how can you actually know this? Well if a skilled member of your team already in the company can complete a task, clearly do this one in-house. But if you don’t have a web designer or tax accountant, these might be tasks that you want to outsource. The alternatives would be either hiring someone to join your company to do these things, training one of your existing employees, or just doing a poor job at these tasks. Outsourcing is the most economically sound choice and will get you the highest quality of work as well.


So why is it cheaper to outsource than to do the task in-house? You will spend valuable time, money and resources training someone in your company to develop your website or do some task that they don’t already know how to do. On top of that, the quality will not be up to the same standard as that of a professional. So save yourself the time and money by hiring a professional on the outside to do the job. If anything, you will thank yourself later for the convenience factor of outsourcing. You won’t have to micromanage this task, and can simply enjoy the benefits of a skilled person completing this task for your business.

What are some tasks that might be outsourced?

Oftentimes, businesses outsource IT tasks if they don’t have an IT department in-house. Another area that is often outsourced is marketing. If you don’t have a marketing team in-house currently, don’t try to scramble one together just to market your products or services right now. Slow down, outsource this particular project and you can work on building your quality team if you decide to do so. Hiring an outside consultant for PR or marketing has the extra advantage that they can give you an outside perspective on what might be most helpful for your business.

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