Is outsourcing safe for a startup?

Outsourcing - also a good idea for your small start-up!

You have just fought your way out of the hamster wheel and are now perhaps still at the very beginning with your new start-up. And suddenly you hear or read somewhere that you should outsource work that has to be done again in order to benefit from it. Perhaps this is the very first time you are reading this about outsourcing. You ask yourself: how is this supposed to work? And above all: What are the advantages for me? I want to answer these questions with this article so that you too can benefit from outsourcing with your, perhaps still quite small, start-up.

The beginnings of a start-up and the difficulties

Have you got rid of your old, maybe even annoying job and have now founded a start-up that you want to start your future with? Then you may already be enjoying the things that make such an independent and young company: the flexibility, the agility and the ability to scale your innovative business model.

Especially if you are still in the start-up phase and are still at the very beginning, it is very likely that you do not have too many employees and you still have to make some contacts.

What is important, however, is the core business - it is about developing and promoting ideas, making contacts and acquiring customers. In addition, all kinds of problems have to be solved every day.

Even if you have a little time left in between, that doesn't necessarily help you. Because if you lack manpower, there are more and more small jobs that remain unfinished. Offers and invoices would have to be written and the bookkeeping had to be brought into shape. Emails want to be answered and your presence on Facebook, Instagram & Co. could, especially in these times, need an update. But then there's the phone that keeps ringing.

If it is not economically viable to fill your own position for all of this, the whole thing will hang up on you in the end. Then you also spend your evenings and sometimes even the weekends at your desk to do tasks that are only marginally related to your business, but which unfortunately now belong to it. The consequences - I guarantee you that already now - are grueling: Frustration will spread quickly, you will be frustrated, drained and annoyed. As a result, you lack the energy that would be better used elsewhere, actually more important. And if things go even worse, you postpone everything to "later" and your start-up begins to falter.

This is why outsourcing is particularly worthwhile for start-ups

So this is where outsourcing comes into play. When you think of the term, you may also be the first to think of medium-sized and larger companies that are outsourcing to cut costs. However, outsourcing is actually particularly suitable for start-ups.

Because the external service providers step in exactly where your start-up is currently or over a longer period of time. These can be office services, accounting providers or social media editorial offices. They all cause costs again, but the bottom line is that you will travel more cheaply with them than if you hire people for the tasks, for example. In addition, you get all the tasks done and have a clear head. Furthermore, the advantages are that ...

  • your start-up receives the expertise of professionals as required. The partners who specialize in this area, with whom you then work together, guarantee you a level of professionalism that you could never develop at this speed and comprehensively with your small team or even on your own.
  • you avoid rookie mistakes.
  • the fixed personnel costs are kept manageable.
  • you will be able to react more quickly to changes.
  • As already mentioned, you and your company can then concentrate fully on the core competencies. You will not be slowed down by paperwork and the like and thus remain agile and flexible.

Some tasks cannot be handed in. And for this you need enough time. These tasks primarily include strategic corporate development. If you make use of outsourcing, you can focus specifically on the systematization of processes, the improvement of quality and on marketing. In addition, you can put your feet up in between and let go from time to time. Because taking a breather is extremely important - even if you would like to invest every second in your new project.

What can startups outsource?

It should already be partly clear which areas, tasks and things you can outsource. Since you cannot be an expert in all specialist areas and should not try to handle management, programming, marketing management and much more confidently and optimally, there is outsourcing potential here. Fragmented and unfocused work sometimes leads to you losing focus with your start-up.

So everything that does not belong to your department and that no one in the team can do in such a way that they are one hundred percent sure of their cause, you can outsource to freelancers, service providers or agencies.

The following areas are ideal for outsourcing:

  • Bookkeeping: Receipts and bills, these two words alone should be enough to send a cold chill down your spine. The perpetual sorting is one thing, in addition, the right know-how is often lacking. If you haven't attended an accounting seminar to at least get an insight into the basics in such an event, it will be difficult. And even then, questions will arise and you will resent not having outsourced right away.
  • Tax Matters: When it comes to taxes, it is even more important to do everything correctly because the devil is often in the details. In addition, mostly only professionals have an exact and complete overview of the current legal situation. One or the other tax-saving trick is likely to slip through your fingers without their help. With the right partners, you can also benefit from other services to generate time for your core business. Some tax advisors advise on various business issues or they take care of wage and salary accounting and offer accounting services
  • Office services: Office service providers usually take on almost all classic office tasks. So she can take phone calls and deal with other correspondence. They also book appointments and plan meetings. If you outsource to large office service providers, you benefit from the fact that they are available around the clock, 24/7. At the same time, however, you only pay them for the services that they actually do. In this way, as the founder, you remain available to interested parties and customers in extreme cases at any time. This is a real added value, especially with international contacts in the USA or Asia. You don't have to worry about sick leave, vacation or parental leave. Worries that would be justified for an employed office worker in the company.

Also:

  • programming
  • Graphics / design
  • Texts (advertising texts, company blog, etc.)
  • IT infrastructure
  • Support
  • Marketing and PR

Outtasking, nearshoring and offshoring - what is it?

By the way, not all outsourcing is the same. If you do not hand over entire projects with your start-up, but rather individual tasks, one speaks specifically of outtasking.

When outsourcing certain activities or projects to nearby countries, this is called nearshoring.

Offshoring, on the other hand, describes the relocation of tasks to countries further away.

Especially when it comes to nearshoring, you can benefit from the obvious advantages: If you relocate tasks to Eastern European countries, the lower wage costs result in corresponding savings opportunities. In addition, the short distance, in contrast to Asian countries, especially India or China, which are known as offshore regions, as well as the identical time zone, offer the possibility of a much more reliable exchange of contacts. And last but not least, the cultural differences are small and the work ethic and the final results are sometimes even better than in Germany.

Why outsourcing sometimes fails

It should have become clear why outsourcing can also be useful and necessary for your possibly still small start-up. However, if you take the wrong approach to outsourcing, it can quickly lead to chaos and an unnecessary burning of time and money. The five biggest mistakes in outsourcing can therefore be found summarized here. Memorize them well to avoid them at all costs:

  1. Inaccurate contracts

You have to document all services and details in the contract. Otherwise, failures here can be very costly. Prices, price units and purchase quantities, on the other hand, should also be flexibly changeable and adjustable afterwards!

  1. The wrong partners

A good partner does not only have relevant references. He also has the appropriate performance, competence and willingness to subordinate himself to your goals. Only choose partners who have these characteristics!

  1. Inaccurately defined services

You shouldn't outsource too little to have enough time for your core business. However, some tasks are best done yourself. Sensitive data, processes and products as well as dynamic content are only suitable for outsourcing to a limited extent. So define the scope of services correctly and precisely!

  1. Inaccurately defined goals

Outsourcing also fails now and then due to imprecisely defined goals. Above all, you want to save time and money, which is why you are outsourcing. So define the goals with your partners very precisely so that the expectations of both sides match.

  1. Lack of quality controls

Outsourcing without quality control doesn't work. For this reason, too, the shorter distance in the above-mentioned nearshoring is sometimes a great advantage over offshoring. Always ensure transparency and carry out sustainable controls with the external service providers.