Outsourcing is a business practice that has been popular for decades now. Many American companies depended on outsourced labor to make the products they sell. We're often told that this outsourcing of jobs saves money – both for the company and the consumer. Lower costs for the business, after all, means that they are able to pass those savings on to their clients, which can be a smart and competitive move to make.
However, when considering employing outsourced services of any kind it is crucial to consider if this will benefit your business. Like any business decision, there are pros and cons to weigh. You must make sure you are deciding to outsource services you need for the right reason, because outsourcing for the wrong reason can be detrimental to your business.
Many companies outsource in hopes of cutting cost. However, this can “lock in” your business and stifle it. When you control your business's functions, you have options to make changes as needed. Outsourced services come with a contract that takes away some of your flexibility, sometimes for years into the future.
Outsourcing should not just be used to take responsibilities off your plate. Outsourcing can be used to create flexibility but depending indefinitely on outsourced services isn't always the best choice. Many business leaders outsource services that they will either never consider or never intend on taking on themselves again. This can leave your management team left with little to nothing to manage and could leave you incapable of shifting with changing needs.
Though it's tempting to save every penny you can when you're running a business, you should also consider if outsourcing is making your business perform better. Consider not just the short-term savings, but the long-term needs of your business.
If you are considering hiring on outsourced services, ask yourself the following questions first:
- Am I doing this because I want to simplify my life, or offer the market something new?
- Am I doing this so I can focus on my "core" business?
- How will this advantage me versus competitors? Would emerging competitors do this?
- Can competitors do what I'm doing? Can this lead to a price war?
- How will this make me more competitive in 10 years?
- How will this make me more connected to markets?
- How will this make me more flexible to deal with shifting markets, and how will I exploit this flexibility?
- Am I doing this because I'm desperate to cut costs?
- What could I be doing instead of outsourcing to be more competitive?
If you make the decision that outsourcing it right for you, Business & Accounting Solutions, LLC offers superior outsourced CFO services. Founder Don Lewis has over 37 years of accounting and business experience. By hiring outsourced CFO services through Business & Accounting Solutions, those years of expertise become available to you whenever you have need of them. Evolve with the ever-changing market with the help of Business & Accounting Solutions today.
Business & Accounting Solutions offers many services, including bookkeeping, cash flow, finance consulting and more. Contact us or call at (503) 710-6213. Know someone in need of CFO services? Consider our referral program.