How to Outsource Small Business Tasks

Outsourcing small business tasks so that you and your employees can focus on generating income and new business is a great way to impact the productivity, growth and revenues of your small business. Thanks to technology that allows you to connect digitally with anyone in the world at any time, you can hand off responsibilities such as bookkeeping, marketing, information technology and administrative functions to contractors and freelancers you do not need to keep on staff. You can also outsource the manufacturing of product parts to suppliers. Outsource small business tasks by deciding what you do not want to do yourself and finding the best professionals to work with.

Part 1

Part 1 of 4:

Choosing Which Tasks to Outsource

1
Decide what your business should outsource. Whether you are a sole proprietor or the owner of a small company, there are many tasks you probably do not have the time or the staff to do. Identify tasks that do not need to be done in the office. Logistically, these will be the easiest to outsource. Then, determine the strengths and values of your business and the core competencies of you and your staff. You and your employees need to focus on what you do best.
- For example, web design business should not outsource any aspects of web design, as web design is the core competency of the business and the owner should not delegate this to others.
- However, this business could outsource payroll or another non-core process.^{[1]XResearch source}
- You should also seek outside help for repetitive tasks. Most relatively simple and repetitive tasks can be cheaply outsourced. For example, bookkeeping, payroll, and data entry tasks probably do not need to be done on site.
- In addition, you can reduce the cost of your front-desk work (like scheduling and taking calls) by hiring a virtual assistant rather than a full-time receptionist.
- There are a number of virtual assistant services that offer handling of phone calls, basic customer assistance, and appointment management, all for much less than it would cost you to hire a receptionist.^{[2]XResearch source}
2
Outsource tasks requiring expertise your business doesn't have. There are three reasons for outsourcing: to obtain missing expertise, extend resources, and lower costs. When you need executive-level expertise but cannot afford to hire a team of vice presidents, you can outsource this type of work. For example, use a tax lawyer several times a year to analyze your books and financial reports. This will save you the trouble of hiring a full-time CFO or accountant.
- Your customer support, IT, and other knowledge-based tasks can also be effectively outsourced if you have the right partner. Doing so can save you from hiring a number of additional employees and extending your business hours. Make sure to seek out a reputable company that can provide the same level of customer service that you would provide yourself.^{[3]XResearch source}
3
Outsource for greater capacity. Some essential projects for your business will only need to ever be completed once or only once every few years. For example, you only need your logo and website designed (or redesigned) every few years. Therefore, there's no reason to hire permanent employees for these tasks.
- If they do well, you can hire the same outsource partners when you need additional, related services like a website update or graphic design for an advertisement.^{[4]XResearch source}
Another common reason to outsource is to reduce costs. These can be monetary costs or time costs. In many cases, a specialized outsource partner will be able to perform the task at a higher level of efficiency and, therefore, a lower cost. This can be done with manufacturing as well as other business operations, such as marketing.^{[5]XResearch source}
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Part 2

Part 2 of 4:

Defining Your Outsourcing Needs

Write a thorough explanation and definition of the tasks or process outsourced. Make sure to specify your inputs (what you will provide to the outsource partner, if anything) and outputs (the deliverables you expect to receive in return). Include as many details as you can about what you need as far as quality, quantity, and speed. Check over your details again to make sure you've included everything you want the outsource partner to be responsible for.^{[6]XResearch source}
2
Determine your quality standards and what you can afford. To choose a reliable outsourcing partner, you'll need a way to assess the quality of their services. This will help you weed out potential partners who can't provide that level of service. Figure out a definable unit by which you can measure the outsource partner's level of performance.
- For example, a customer satisfaction rating for customer support or an error percentage for payroll services can be measured, tracked, and agreed-upon in an outsourcing contract.
- In many cases, there will be a trade-off between quality and either speed or cost. You may need to lower your quality expectations if you can't afford the higher-quality outsource partners.^{[7]XResearch source}
- Remember you should never outsource something you cannot manage yourself. For example, you would never let someone else do the company's accounting unless there was expertise within the company to understand and manage the process/deliverables.
3
Clarify the terms of outsource partner interaction. Outsourced tasks will always require oversight from your end. You'll need to figure out who, whether yourself or an employee, is going to be in charge of providing information to, interacting with, and resolving conflicts with the outsource partner. Include the extent of this interaction, as far as your needs and capabilities for doing so, in the description of your outsourcing needs. Make sure to specify how your processes and departments will interact with those of the outsource partner.
- This is also a good place to include any rules or restrictions on data shared with the outsource partner.^{[8]XResearch source}
4
Provide a bid package for potential outsource partners. Create a specific explanation of the work you need done. This should include a good explanation of the scope of work, expectations, timeline, and any other requirements. This will allow your potential suppliers or outsource partners to calculate the costs on their end and provide you with an accurate bid.
- Provide measurable goals/objectives for your outsourced processes.
- Define your needs clearly so that you and potential outsource partners are on the same page from the start.^{[9]XResearch source}
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Part 3

Part 3 of 4:

Finding an Outsource Partner

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Search for excellent providers. Once you decide what to outsource, look for the right contractors. Start by asking for referrals from your own professional network. Talk to other business owners and professionals about how and where they outsource. You can also check professional associations or trade groups field in which you are trying to outsource work.^{[10]XResearch source} Use other social media platforms such as Facebook or Twitter to advertise what you are looking for.
- Alternately, you can connect with contractors and freelancers on sites such as eLance, Guru and oDesk. These websites allow business owners to place an ad that describes what kind of work they need to have done, and contractors respond with their qualifications and rates.^{[11]XResearch source}
- Send each potential provider the same bid document you prepared so that you can more easily compare their offers.
2
Review qualifications and experience. Check references and conduct interviews. Ask to see samples of work and for references. Make sure that the outsource partner speaks your language well enough to conduct business. Ask questions to cover any concerns you have or address potential issues that might arise down the road. Researching each prospect more than you think is required will help you select the best outsource partner.^{[12]XResearch source}
- Perform due diligence on each candidate. This should include contacting prior and existing clients specifically.
If you are sharing financial, customer, or proprietary information with the outsource partner, you will need to make sure that their data security is up to par. Ask for an ISO 27002 compliance statement to assess their overall security level. Similarly, a PCIDSS compliance statement and HIPAA compliance statement should be reviewed for partners handling credit card and health insurance information, respectively.^{[13]XResearch source}
Contact reputable potential outsource partners and ask them to submit a bid based on your scope of work. Don't let them know what your budget is so that they can submit honest offers. When you've collected several offers, review them for price and the level of quality that they can provide. It's not usually advisable to choose the lowest offer, as you usually get what you pay for.^{[14]XResearch source}
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Part 4

Part 4 of 4:

Finalizing the Outsource Agreement

1
Create a contract. When you find a person or firm you are ready to outsource your tasks to, draw up a contract that describes the work, deadlines, expectations, and rate of pay. Be sure that every conceivable detail of the agreement is clearly stated and leaves no room for misinterpretation. This is especially true for the deadline and quantity/quality of work expected. You should also include a clause in the contract that provides for revisions to your agreement.
- Be sure to include elements for recourse and remedies in case things go bad. Talk to your lawyer about creating these types of legal protections in the contract.
- Make sure that both you and the partner have read the contract and that you both fully understand it before signing.
- Get any questions or concerns out of the way before finalizing the contract. You don't want these issues to come up once you are working together.^{[15]XResearch source}
Ask for weekly status reports or hold meetings via conference call or video chat to update each other on where you stand. If there is a time-zone difference between you and the outsource partner, turn this into an advantage by having them work on time-sensitive tasks while you are not working (such as overnight).^{[16]XResearch source}
3
Allow the outsource partner time to adjust. Even the most experienced outsource partner will need some time to perfect the service they are providing to your business. Employees on their end will need to learn your established business practices or information over time. There will likely be a transition period in which the service level is not up to your standards. Don't worry; if you've chosen the right partner, they will improve over time.
- Continue the process in-house until the transition period is over and work is being done successfully.
- If they do not improve, you should be protected by the quality standards established in your contract and can begin to search for a new outsource partner.^{[17]XResearch source}
- Avoid micromanaging your outsource partner's work. This will only reduce the time you should be saving by outsourcing your work and distract you from your core operations.^{[18]XResearch source}
Make sure outsourcing is saving your company time and money, and that the work is being done to your satisfaction. If your outsourcing has proven successful, you can determine whether there are other tasks that your small business can outsource.^{[19]XResearch source}
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Tips

Be careful not to outsource tasks simply because they are unpopular and you do not feel like doing them. When you identify the parts of your work that are essential to your business and your customers, make sure you and your full time employees handle those tasks.
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