Should You Outsource Your Startup?

In the early days of your startup, you’ll be tempted to find ways to take things off your plate. Since startups are all about growth, you’ll want to look for ways to focus on that goal while freeing up resources in other areas. One of the ways you may look to accomplish this, is through outsourcing.

However, before you rush to save money by hiring a freelancer it’s important to realise what you’re getting yourself into. It’s also important to realise that not every aspect of your business is created equally, and certain areas may lend themselves more favourably to outsourcing.

The Good

Outsourcing certain aspects of your business will most certainly save time and money. In fact, these two things should be almost guaranteed. If they aren’t, you’re missing out on two of the main reasons to outsource in the first place.

Outsourcing can further allow you, the founder, to focus on your company’s growth and direction. As a startup founder, you are often forced to wear many hats. If there’s a cost-effective way to have someone else wear a few, more the better.

The Bad

Outsourcing is not without its risks and downsides either. Any time you bring in talent from outside of the company you are taking a few risks, and putting your faith into someone else. Giving up a certain amount of control may be necessary, but it is not something that a lot of founders like to do, especially early on. Things to consider include:

Your goals are different. Whether you’re hiring an individual, or an agency, the bottom line is that your operational goals differ. Your goal is to grow your company. Their goal is to grow theirs. Because these goals are intertwined, this is not necessarily a bad thing. However, for founders who want to create a culture of “everyone on one team, united, towards a common goal,” outsourcing is a divergence from that.

Communication may suffer. Communicating with an outsourced staff, or department, can present new challenges, especially if there is a language barrier that may come with outsourcing overseas. Key points, or core values may become lost in translation, especially if your outsourced talent is not part of the day to day operations.

You may not save as much as you think. While you should be saving money, how much is it costing you in terms of time spent communicating, correcting errors, or providing oversight? If you’re saving 10 hours a week by paying someone else to work those 10 hours, but you’re having to spend 5 hours a week making sure they’re doing the right thing: is it worth the cost to net those 5 hours? And what effect is it having on your sales or customer service?

What Should You Outsource?

Of course, there are some areas that businesses have been outsourcing for years, and with great success. Payroll is perhaps the best example. Especially in a day where workplace time tracking is becoming increasingly digital, payroll processing has been handled by outside company for businesses of all sizes for decades now.

General accounting is another area that can benefit from an outside hand, unless you’re large and well financed enough to have an in-house accounting guru. Like payroll, business accounting is less subject to interpretation, more fact-driven, and there are a number of outside individuals and firms available at a fraction of the cost of in-house solutions.

What Shouldn’t You Outsource?

At the right stage, any number of things can be outsourced. However, in the early days there are some areas that should be kept within the confines of the company. Matters of culture, for example, should be built on in-house, as this is crucial to your business’ development. Your culture defines your business, and by its nature, that is difficult for an outsider to define.

Likewise, key areas of product development should also remain inside. Anything that touches on your identity as a company, and your specific product is certainly one of those things, should be worked on and developed by your own team. After all, this is the reason your startup exists in the first place.

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