A lesson that many entrepreneurs learn the hard way is that they can’t do it all. Launching a small business requires a lot of specialists, and you may not be able to find and hire some of them locally.
Outsourcing — the practice of delivering particular work that can be performed within an organization to external companies — is a familiar notion to many entrepreneurs. Many large companies turn to outsource for a plethora of reasons. But is this the same for small businesses?
Advantages and disadvantages of it outsourcing for small business
Benefits of outsourcing for small businesses or why outsourcing is good for business
Hiring team augmentation or a dedicated team to reduce development costs is almost always the primary reason. How? Well, you don’t have to pay for the office rent and equipment. Moreover, if you find an overseas partner you may hire someone who charges lower rates (if you’re from the US or UK).
#2 Bringing specific expertise fast
Whether you live in the smallest city or in the metropolitan — you may run out of the talents your business needs. Some may be hired by another company, others may just don’t live in your area, paying for relocation or hunting talent from other companies may cost you more than hiring dedicated talents.
#4 Focusing on the most important things
You can be a jack of all trades. But it won’t lead you to success. To distribute responsibilities wisely you can hire a dedicated team and deal with the things only you can deal with.
#5 Ramping up development teams fast
Sometimes you understand that the issue in your software needs to be resolved immediately. Or, maybe, you are so passionate about the new idea that you want to implement it right away. In this case, outsourcing these tasks will be so much easier than spending time on the tiresome recruitment process and worrying about finding suitable candidates quickly.
Outsourcing doesn’t mean compromising on price. It allows hiring senior experts overseas for the price you would hire junior talents in your country.
What are the drawbacks?
#1 Threat to security
If proprietary company data like payrolls or medical records will be transmitted or used by the outsourcing company there’s a chance that data might be stolen. But don’t be discouraged, there’s a way out! By applying proactive safeguards like signing a nondisclosure agreement will make the whole process safe.
NDA (nondisclosure agreement) is a legal contract in which a business promises to keep data in the secret not to share this information with others without proper authorization.
#2 Hidden costs
To avoid paying costs that exceed your budget (one of the benefits of outsourcing for small businesses is making money not wasting it), make sure you have every detail covered in your contract. Create a specific project description and contact your vendor to make an estimate. The more precise you are with your project, the better cost and time estimation the outsourcing company will be able to deliver.
#3 Mental alignments and language barriers
If this is the problem that stops you from outsourcing, we have good news for you. If you hire a company in Eastern Europe you may be safe, because their mentality is similar to western. To check out their language level and life attitude you just have to interview their team lead and one or two developers.
How to outsource
Now, let’s talk about how to outsource work.
The best place to start with outsourcing is Clutch-like platforms, where you can find an immense database of outsourcing software development companies grouped by location, services, expertise, or company size. There you’ll find feedback left by previous clients. While you may not be able to choose your future business partner immediately, it can be a great starting point.
Whenever you picked several companies, contact them, ask several questions about their previous project experience, values, and professional development. At this stage, you can also check their English skills.
After you cope with all these things, and you decided with the vendor you will receive a team of specialists and interview them as well. By the way, if you choose an outstaffing company they have many candidates to choose from, so don’t worry about not finding a suitable worker.
What should you do next?
When all said and done, the only reason you should outsource is to save more money and hire better specialists than you would do without outsourcing.
Outsourcing in the small business allows you to bring specific expertise fast, focus on the main but not auxiliary tasks, and avoid an extra unnecessary expense on in-house employees.
If you see more value in choosing to outsource than relying on an in-house IT personnel, contact inVerita outsourcing company today!