We’ve all heard about large companies using outsourcing as a part of their strategy. However, is this something small businesses can also benefit from? Let’s find out if outsourcing for small businesses is as effective as it is for corporations.
What is outsourcing?
Outsourcing means ‘using resources outside’. Companies often have business partners that take care of some of their business processes. Outsourcing has become extremely popular due to globalization. Nowadays, it’s become a new norm and it is no longer an odd thing to do. It has many benefits that are very hard or impossible to achieve when proceeded in-house. We’re going to focus on them in a minute especially when it comes to outsourcing for small businesses.
Outsourcing for small businesses – is it a good option?
I’ve noticed that many entrepreneurs and people in general tend to perceive outsourcing as a tactic used mainly by huge enterprises. And that is only partly true. This misconception about outsourcing being limited for huge corporations has been created because of the difference in numbers. Big companies have no other choice if they want to stay relevant on the market and compete with others. When it comes to small businesses – not everyone is doing it. Which creates an opportunity for those who do. Outsourcing for small businesses is a huge advantage from the beginning of their existence.
Benefits of outsourcing for small businesses
- Cost reduction – key benefit of outsourcing for small businesses
I think it’s the first benefit that’s usually being mentioned when it comes to outsourcing. And there’s definitely a reason why that’s the case. The difference can be significant and for small businesses it’s very important to manage your budget wisely. We also have to remember that you pay for what you get so I would be really careful with the companies that offer very much for very little. A very common destination for people that want to optimize their costs but want a great quality is Poland. Before choosing the country I recommend doing some research.
- Maximum performance of your product
When you decide to outsource software development you get your own tech advisor. These people know software development like no one else. When you choose the right people they will be much more than just people that write your code. They will make your product as good ad it can get. If it’s an IoT device, they can help you with choosing the right hardware for your system and so on. These people know technology and know your vision. Thanks to that you can get the best performance out of your product.
- Guide and knowledge from experienced people
As an entrepreneur you know how important is knowledge and how big of a value people bring to the companies. You also know how difficult it is to get the best people when your company is still fresh. Moreover, the best people are usually very well paid and busy. There’s a limited amount of people you can consider. BUT you can also decide to outsource and have unlimited number of tech talents to choose from. These are also people that work everyday of their life with code, they’re much more experienced than people you can afford in your area. I’m not telling you to do it, I’m just suggesting you to check your options before making a decision that can impact your whole business.
- Focus on your business
Creating a new business is a stressful thing to do. It requires a lot of focus and dedication. There’s many things that need to be taken care of and many things that seem to be out of control. On top of that, software development is extremely time consuming and frustrating for someone who doesn’t necessarily understands it. Outsourcing your project development gives you and your employees an opportunity to focus on the most important aspects of your business.
- Long term partner
Creating a meaningful relations is very important when making a business. It’s even more important to have some business partners that you can share your vision and contacts with. Companies often decide to outsource their whole R&D departments that take care of a whole product development process for a long-term period of time. Thanks to that, startups can develop their projects constantly, with the people they trust and share a vision with. Outsourcing can be an extent of your own company.
- Time reduction
Let’s say you want to hire a developer to take care of your product. But you’re a startup, you have limited budget and you have to be smart with your costs and expenses. So you’re probably going to hire only one developer or small team for a few months. It’s not the most efficient way. Hiring process is going to take some time. Then these employees are going to have to get to know the rules of your business. After all, they’re working for you. There’s a lot of added costs that you have to also consider when recruiting. On the other hand, there’s outsourcing. It gives you a lot more possibilities when it comes to time of execution and number of people. The company you hire can use more people for the project in order to develop it quicker. Moreover, they’re paid strictly for the project.
- Competitive advantage
Outsourcing software development is a way to achieve competitive advantage on a market. How? All of the benefits written earlier are creating this one. Cutting costs, maximizing the performance, access to skilled and experienced people creates an opportunity to be ahead of your competition. It’s crucial for new and businesses to be as efficient as possible because it’s their biggest chance of succeeding.
Outsourcing is a big decision for every company. However, it’s not uncommon. You wouldn’t be the only one that chose outsourcing. The number of companies cooperating together is huge. But definitely focus on the research before you choose your partner.