Business & Finance

What Is the Secret of Outsourcing

Written by Peter

The secret is Outsourcing itself is a skill you acquire as a business entrepreneur. Remember this: Everybody is blessed with talents that they use and rely on in their life and business, but absolutely no one possesses every talent.

Outsourcing as defined by Wikipedia:

Outsourcing is often viewed as involving the contracting out of a business function – commonly one previously performed in-house – to an external provider.

As noted in Wikipedia there is no universally agreed upon definition mostly an agreement about the concept.  It is an extremely complex business practice.  Because of its complexities – it can be extremely positive for a business or destructive.  These are the most important things to understand about outsourcing:

  • Knowing why you are outsourcing
  • Knowing exactly what you are outsourcing and
  • How to outsource

Done right – outsourcing can bring your business fantastic results – done wrong – untold damages.  We think outsourcing is a very big lesson in business and one of the extremely valuable business principles most new entrepreneurs and small business owners fail with the understanding of it or with the implementation of it

A solo entrepreneur’s approach to outsourcing can be quite simple and effective. Do what you have a talent in – for yourself – the rest > outsource it for others who have talent in what you require.

Many new small business owners are internet franchises.  Entrepreneurs start a business, they spend money, and then they are making a decision – I’ve spent so much money let’s try to stop the spending and do myself whatever is required and then when the business starts rolling and starts to bring some cash flow – then we will start outsourcing. We think this is definitely wrong – they failed to understand one of the most critical small business principles: they never get to the phase of being able to outsource it and get anywhere.   Most will struggle to learn skills they don’t understand, might be brand new, and is not in line with their nature and the work will come out inferior and ineffective.  It will not be a plus for the growth of your business

Just the opposite is the more effective practice – make their decision the other way – I’ve spent so much money on starting a business I will spend an additional amount on outsourcing the work I don’t understand.  Following this direction instead, things will be done fast, accurately, and professionally. This will drive their business growth, increase or create profits to plow back into the business generating additional profits to build real wealth

With today’s global online economy outsourcing is “cheap as chips”.  Take this as one of your general business principles – outsourcing is so prevalent, affordable and so effective – it makes sense to implement. Many business principles are hard to accomplish but this is one of the business principles that is the direct opposite – it makes your business run and grows much easier

I think it’s one of the very basic business principles and many new entrepreneurs are trying to avoid outsourcing to save money.  It is a very short-sighted view of developing a real reliable business! I also want to add to this something very important even if you have professionals who you outsource to.  because you found a reputable and good supplier it does not mean you can rely completely on them after all you are the business owner use wisely – implement outsourcing on an incremental basis.

There are many outsourcing experts who highly recommend that you have a good understanding even on the things you don’t do yourself.  It should be looked at as these suppliers are literally an extension of your business a pseudo-employee.  They can make or break your business.  Know what they are doing, understand it at a high level as a minimum, and become more knowledgeable of it over time.

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