5 Things to Consider Before Outsourcing

If you run a business, outsourcing is something to consider. It might be unnecessary if you can easily do everything in-house. However, hiring a third party to handle specific business services or tasks can — rather than tackling them internally — be a good strategic decision.

Whether you run a business from an office, operate a virtual company from home, or own one or more rental properties, getting help from a third party can be a game-changer. 

Many investment property owners realize, for instance, that serving as a landlord is hard work. In addition to their work and family duties, they have to take care of tenants and their properties. Calling in a third-party property manager can benefit people investing in real estate.

Here are five things to consider before deciding if outsourcing is the right move.

1. Cost Savings

Cost savings is an essential consideration before deciding whether or not to outsource. According to one source, worldwide spending on outsourcing reached $731 billion last year. It adds that almost four in 10 small businesses — 37% — outsource at least one of their business processes. And companies that outsource human resources can save an average of 27.2%. 

Before deciding if outsourcing is the way to go, you must assess two things. On the one hand, you must determine how much your current business processes and procedures cost. On the other hand, you must decide how much you can save by outsourcing these processes and procedures.

2. Pricing

Factor into the equation how much it’ll cost to find a dependable and reputable third party. That’ll mean looking at various candidates, seeing what they offer, and getting quotes. The cheapest quote might not be the best option for your company. Look at what you get for what you pay monthly. Sometimes paying more is a better deal in the end.

As for cost, a rental property owner hiring a property manager will pay a percentage of the monthly rental income. It might be tempting to choose the property manager who is charging the lowest amount. However, it makes more sense to select the service provider that offers the most value.

3. Ability to Meet Demands

Before selecting a service provider, do your research. Otherwise, it’ll be like rolling dice. Find an outsourcing company with a long track record of successfully serving customers in your niche. You can ask other business owners for referrals and recommendations or check out online reviews for some information about. 

When speaking to prospective outsourcers, you must outline what you’re looking for and expect. Getting everything in writing is the best way to safeguard your business interests. 

4. Service Level Agreement

The service level agreement is a document that details an outsourcing pact. It protects your business and the outsourcer by outlining the service provider’s responsibilities. A good service level agreement will clearly outline who does what so nothing’s lost in translation. Getting a lawyer to review the service level agreement before signing it is the best thing to do.

5. Reduce Liabilities

Are there certain business processes and procedures you’d like to keep in-house? Remember that you don’t have to outsource everything. Before looking for an outsourcing company, determine what you wish to do in-house and what you want to outsource. The right outsourcing partner will be just that…a partner. They can be part of your team, or you can outsource everything. 

If you choose the latter, the outsourcing company will keep you in the loop and seek your input as necessary. So, you won’t lose control of your business simply because you outsource.

These are some things to consider if outsourcing is on your mind. It might not be the right move for your company, but it could be a godsend and a game-changer.