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BFS Capital Blog

Can Outsourcing Enable Small Business Growth?

March 12, 2014

Growth and success inevitably lead to more and more complex decisions for business owners. One big one: The question of outsourcing. Having built their businesses practically single-handedly, many are reluctant to let go. Cost can be a factor, since some owners believe that keeping everything “inside” is less costly.

Concerns about outsourcing are legitimate, but some beliefs about the practice aren’t necessarily true. What’s certain, though, is that nearly all businesses need to outsource certain functions; and it’s probably a non-negotiable for growing and moving forward. It’s important to understand the reasons behind outsourcing, along with the decisions that will get you there.

Sorting it all out isn’t easy. That’s why’s How to Build a Better Business with Outsourcing by contributor Nancy Mann Jackson is a must-read. The site describes the information as a “comprehensive guide on the what, when and how to outsource for your small business.” Perfect!

As multi-tasking wearers-of-many-hats, business owners like to think they can do it all. Or they may see outsourcing as something only big businesses do. But this can stall the growth of the business. When you’re spreading your time and effort too thin, you’re not concentrating on the ones that will pay off by generating income. It’s also important to recognize technology as the game changer for smaller businesses. As a result, outsourcing can have an amazing impact on growth, productivity and the bottom line. Technology means access—access to every kind of skill and expertise in any location, from paralegals and web designers to IT specialists and bookkeepers.

So, how do you decide when and what to outsource? When is different for every business. You may have new projects but are not ready to hire another full-time employee. Or, you and your staff have become overwhelmed with the day-to-day and need to offload. Or, maybe you’re ready for growth but can’t begin to find the time to nurture it. For small and young businesses, many recommend outsourcing right off the bat, beginning with the basics like a virtual assistant and bookkeeper. From there, it’s easy to build an outsourced team by adding skills such as web design, project management or marketing.

For more established businesses, especially, this leads to the question of what to outsource. Begin by taking a critical look at your operation, as well as your own strengths and values. Don’t outsource activities directly related to your core business or things you as a business owner should be doing, even if you’re not overly fond of them! Experts say the types of tasks best outsourced fall into three general categories:

    • Highly skilled or executive expertise. A great example: You wouldn’t hire a CFO-level person but could really benefit from one periodically for financial analysis or annual planning.


    • Highly repetitive tasks. For example, shipping, accounts payable, data entry, etc.


    • Specialized knowledge. IT or marketing support are just two examples.

From there, your focus changes to finding the right outsourcing partners and building working relationships, from initial contract to setting expectations to detailing the services you need to managing potential risk. In the beginning, at least, outsourcing can be time consuming and takes patience; there’s definitely a learning curve on both sides.

Time will tell whether outsourcing benefits the business in the ways you’d hoped. Most business owners report great advantages, including being able to focus their time and attention on those things the business does best and achieving its goals. Read more here.

A growing trend among small businesses in the U.S. is outsourcing to people in other countries, which, not too long ago, was only done by big companies. No more, reports the New York Times. Now mostly through online marketplaces, small businesses are increasingly seeking out these sources of cheap labor. But while foreign outsourcing offers advantages, it’s also fraught with a whole host of cautions and pitfalls. Buyer beware!
Image courtesy of Stuart Miles /

Are you outsourcing? And if so, how did you decide what functions to outsource?