Why Business Outsourcing Is Ideal For Startups And Small Businesses | Magic Assistant Blog

Why Business Outsourcing Is Ideal For Startups And Small Businesses

Why Business Outsourcing Is Ideal For Startups And Small Businesses

Outsourcing Business Task With Magic

Some businesses, especially startups, can’t afford in-house staff for every task. To mitigate the costs of recruiting the right talent for these, outsourcing services are a compelling option. These services can include delegating tasks in marketing or accounting and payroll. You can create your own outsourcing strategy based on your business’s needs to keep costs low while scaling up.

What is Business Outsourcing?

Outsourcing is the practice of hiring a third party to perform services or produce goods that are traditionally done in-house. Companies typically adopt this approach as a cost-reduction measure, since it lets them get around the cost of personnel benefits, training, office space, and equipment.

As a testament to its effectiveness, a number of startups now considered tech giants, such as Google, Slack, and GitHub, invested in outsourcing services when they were starting out. Outsourcing their IT services, like web and app development, brought significant revenue to these companies. Additionally, more than a third of small businesses were already outsourcing services in 2019. Today, 45% of companies plan to find the talent and skills they need through outsourcing.

Outsourcing business services allow you to get more done while also keeping costs under control, increasing efficiency, and recruiting top talent as well.

Benefits of Outsourcing Services for Startups and Small Businesses

What benefits do outsourcing services provide? Do they add more value than creating an in-house team? Below are some of the most common reasons why businesses of various sizes turn to third parties for their staffing needs.

Benefits of Outsourcing Services

  • Cost Reduction

Cost is one of the main reasons why organizations prefer to outsource various services and responsibilities. Training and hiring can be very expensive, and even more so when employees fall short of the role’s expectations. Outsourcing allows you to allocate your resources where you need them most by guaranteeing experienced and highly qualified workers requiring little to no training.

Moreover, most companies do offshore outsourcing to take advantage of lower labor costs in emerging markets. There is a significant difference in pay between developed and developing countries (i.e., an employer may have considerably lower costs in outsourcing services from developing countries compared to getting them done locally).

  • Better Company Focus

Another benefit of outsourcing is an increase in company focus. Since it takes ad hoc responsibilities off your team’s hands, you can focus on your respective specializations. For instance, customer service can eat up the time and attention other employees would normally spend on their respective roles. By outsourcing this service, you can provide customers with high quality and consistent service, while also allowing your internal team to operate more efficiently.

In line with the previous item, there’s no need to spend on recruitment and training, consequently decreasing the need for a lot of resources as well. As these tasks are fulfilled with minimal or reduced cost, companies can now direct their focus on creating strategies and plans to ramp up their business.

  • Broader Access To Resources

As small businesses begin to scale up, demands start to increase as well. Outsourcing services grant companies access to high-quality talent, innovation, and thought leadership all around the world. As a matter of fact, Doing so allows them to select the outsourcing partner best suited to their needs. Companies can also leverage the expertise of these third parties by having them use their own resources.

5 Key Business Tasks You Can Outsource

#1:  Accounting

If a small business does not have in-house accounting staff, it’s ideal to outsource such services to a professional. Things like bookkeeping, payroll processing, and tax accounting typically take lots of time and follow strict, complex regulations. Errors can have serious financial consequences for the business if not handled properly. Generally, outsourcing reliable professionals will save you a lot of time and money in the long run.

#2:  Marketing

Marketing is crucial to the growth of any business. However, a successful marketing campaign consists of various components that may be difficult for one in-house employee to deliver on their own. Given that, it would be more cost-effective to outsource these to a team of professional marketers or an entire agency than delegating these tasks to a single employee. They can handle content creation, ad design, social media posting, and branding.

#3:  Information Technology (IT)

IT, including cloud computing and managed services, constitutes one of the most outsourced services. In fact, there was an increase in spending on IT outsourcing, rising from 12.7% to 13.6% from 2019 to 2020. Many small businesses lack the means to sustain an in-house IT team. You will need the assistance of a professional to set up and operate the devices, systems, and applications that your business uses. You can also outsource IT to an on-demand services provider.

#4:  Administrative Tasks

Making appointments, organizing office logistics, preparing trips, and answering phone calls are examples of administrative tasks that executives and entrepreneurs may not have time to do. That said, neglecting these seemingly menial responsibilities can stunt the business’ growth. Executives can get around this by delegating tasks to a virtual assistant.

#5:  Customer Service

Having a large volume of clients and customers is a good indicator of a business’ growth. However, a startup may not have the resources to handle too many coming in too quickly. To tackle this concern, customer service outsourcing is an effective solution where you may delegate these responsibilities to a third party. With a bit of training in processes and protocols, outsourced CS reps can handle customers as well as any in-house team.

Outsourcing Services Through Magic

Business Owner Outsourcing to Magic

Business outsourcing can provide several advantages when it comes to scaling up your business. However, you must still exercise caution when adopting this practice. You need to identify the right vendors and develop the right strategies to ensure the security of your company’s data. Part of this is establishing a positive, long-term relationship with the outsourcing partners of your choice.

Magic Assistants are experts in what they do, both in attitude and technical skills. Whether working for startups or for large enterprises, Magic Assistants have a proven track record and customer stories to back them up.

Below are some roles a Magic Assistant can take on:

  • SalesSDR, appointment setting, lead generation, business development
  • Customer Supportvoice and non-voice
  • Marketingcreatives, social media, campaigns
  • Bookkeepingdata entry, financial reports, tax filing

Growing your startup from the ground up is a tremendous undertaking. Outsourcing is one way to approach the task effectively and economically. With the benefits listed above, business outsourcing is one of the most effective resources you can utilize to give your startup a competitive edge while also reducing costs and increasing efficiency.

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Written by

Franchesca Palattao

Chesca is a writer at Magic who aims to open spaces for conversation and sharing insight. Working remotely as a Magician allows her to inspire and educate others by writing, while also indulging in art and other hobbies in her spare time.

Magic upgrades your life with a 24/7 personal assistant. If you have a business, Magic gives you an on-demand remote workforce whenever you need it. Try Magic now!

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