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4 Ways Outsourcing Can Save a Failing Business

Richard Walton
Updated Jul 25, 2022

Why outsourcing helps small businesses rival their larger competitors

Twenty years in the startup world has taught me this: growth is everything. When your business fails to grow, it fails to succeed. But to keep innovating and moving forward, you need time, money, and resources, which are the three things that most startups and small businesses lack.

That’s where outsourcing steps in. It can be one of the most effective growth strategies for small businesses if you’re clever about what you outsource, how you manage it, and most importantly, who you hire. Here’s how outsourcing can help small businesses rival their larger competitors. 

1. Cost savings 

Most businesses need to find ways to save money so that they have the capital to invest elsewhere in the organization. In the early stages especially, it’s absolutely crucial to keep expenditures to a minimum. That’s where outsourcing is so valuable: You can bring in top-quality professionals for a fraction of the price it would cost to hire them in-house. You don’t have to worry about obligatory national insurance contributions, sick pay, benefits, or any other extras that pile on top of a normal employee’s salary. It grants you more flexibility, as you can bring them in as and work arises.

At my company AVirtual, for example, our digital marketing experts, virtual PAs, and bookkeepers are up to 50 percent less expensive than full-time employees in the UK. They’re highly trained professionals with years of experience working for global firms, but because we’re based in Cape Town, we’re able to offer services at more competitive rates. The cost savings should never be a company’s first concern; a bad job could end up damaging a company’s reputation and bottom line. The quality of the output should always be given top priority.  

2. Access to specialist skills 

With a limited budget, it’s difficult to entice star employees to join your start-up, but outsourcing provides easy access to talented professionals from across the globe at low costs. Most companies need a marketing person, sales manager, IT technician, bookkeeper, and head of HR, but they don’t have the budget or the workload to sustain a full-time, skilled employee. Outsourcing means that small firms can find the expert assistance they require part-time or even hourly.

Think about it like this: If it’s not your area of expertise, there will be someone who can do the job better and quicker than you, which if you’re paying by the hour, will end up saving you a lot of money. Capita IT Enterprise Services, for example, provides low-cost, specialist IT services, with up-to-date technology, which small businesses might not otherwise be able to benefit from. This kind of specialist assistance can help small businesses keep up with the professionalism of firms with much larger in-house teams. 

3. Less HR administration 

Reducing HR admin is important for cutting costs and saving time. If an in-house employee falls sick unexpectedly, it usually means that the business is short-handed for a while, which as a result, will affect the overall rate of productivity. In some cases, you may even have to bring in a last-minute cover replacement, which will take time to arrange and will most likely cost you a premium if it’s short notice. Most outsourcing companies offer coverage throughout the week so that you don’t have to worry about employees taking sick leave or vacation.

What’s more, if you’re using a good virtual services company, they’ll usually take care of all the management details too so that the replacement is ready to start working straight away, without you having to waste more time and money on re-training. Companies like TeleDevelopment Services offer a high level of HR support and can help with organizational development (OD) by implementing performance management systems, as well as training courses for employees and risk management.

4. Stronger team 

Whenever a young entrepreneur asks me for advice, I always tell them that you can never underestimate the power of working with a team of skilled and passionate people, which means investing a lot of time into recruitment. But even if you do, you might not always get it right, so you have to be prepared to let them go. Removing unsatisfactory employees full-time can negatively affect the rest of the team and ultimately, the company’s growth.

Outsourcing to a virtual services company or freelancer means that you can very quickly remove someone you’re not happy with, even if it’s just a personality clash rather than a professional weakness, and concentrate on creating the strongest team possible. The best virtual services companies provide match-making services, making recruitment faster and more effective. Virtual Staff Finder, for example, uses an experienced sourcing team to scout out the best candidates and test their skills before proposing three prospective virtual employees to the client.

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Richard Walton
Hello, I am the founder of Outsoucery. We help UK SME's scale up. From our headquarters in Cape Town, South Africa we supply world-class professional business services by the hour. From 5 hours a month and with no contract SMEs have access to our team of bookkeepers, executive assistants, social media managers, digital designers and business growth services. Find out why 100's of UK SME's use us and why we are one of the fast growing business in Cape Town today. Read more about us in the FT, the Times and SUCCESS magazine.