Seven keys to outsourcing success for start-ups

Outsourcing, hr and recruitment business strategy concept. Internet and modern technology.

Outsourcing’s benefits are magnified for small business and start-ups. Good suppliers provide the flexibility you need to perform, they connect you with expertise beyond your capacity and can make your business look bigger and more professional. Choose wisely and you will form relationships which propel your business forward.

Outsourcing won’t always be perfect – you should expect a few bumps along the way. There is no absolutely foolproof approach, but consider the following keys for outsourcing success:

1. Look beyond cost: Price does not indicate value. Making choices on cost alone is the biggest, most common mistake with outsourcing.

What are you trying to achieve? Without knowing your motivation and the problems you are trying to solve, you risk falling into the price trap. It’s false economy on so many levels – it’s like buying a cheap pair of shoes and expecting them to provide long-lasting support, comfort and reliability.

2. Use outsourcing to grow: It pays to think bigger with outsourcing because it can also help you grow.

For example, the delivery transport area of business involves large fixed costs. Imagine investing in new vehicles and drivers yourself to trial some new delivery runs – get it wrong and it could cripple your business. The smarter way is to use your supplier to trial new runs gradually.

This turns fixed costs into variable ones, giving you the agility to grow – always look for suppliers who can grow with you.

3. Flexibility equals control: Outsourcing should provide you with more control. Any supplier should give you the flexibility you need to up resources or scale them back quickly – if they can’t, then you aren’t getting the control you need.

4. Your suppliers add value to your clients: It’s not just about solving a headache or taking liabilities off the balance sheet – outsourcing should also bring the potential to make your service better.

5. Understand what success looks like: Understanding success will be partly financial because you would expect to be more efficient via outsourcing, but success may go well beyond this measure. Other KPIs such as customer service, reliability, and responsiveness may not be so easy to measure yet bring untold benefits to your clients.

6. Don’t underestimate the human factor: Outsourcing isn’t much different from hiring new employees. It’s good to do business with people you like. Do they genuinely care for you and your business? You need suppliers who treat your business as if it were their own.

7. Ask for a trial: Be wary of jumping into a large commitment too quickly. Be extra wary of suppliers who try and push you into lengthy contracts. There’s nothing wrong with asking for a short trial period instead.

Any good supplier who really wants your business will happily start small and let you gradually scale up resources. If the trial doesn’t go well then you haven’t lost too much. But it could be the start of a beautiful friendship, one step at a time.

Walter Scremin, General Manager, Ontime Delivery Solution