We’re happy to announce that we have a new managing partner on board – Rami Wazni. With over two decades of experience in the software development industry, Wazni will be responsible for overseeing Appstronauts’ North American division and helping to increase our presence in the region.
5 Reasons to Choose to Outsource When You Launch a Startup
With geolocation, you offer extra value to your app’s users and increase the competitive advantage. And it’s super easy to implement with Ionic. Discover what are the benefits and how to do it.
Launching a new startup is not an easy task. High competition in the market and problems with finding an appropriate advantage make many companies unable to enter the market. What’s more, the lack of skilled specialists, as well as experts in specific fields in a given company may prove problematic for many startups. However, one of the most important reasons why small businesses, as well as startups, fail is poor management. Being the person responsible for running a startup is an extremely demanding task and many people, unfortunately, cannot cope with it. In many situations, the pioneer/core team members are trying to do everything on their own. Using their own time and knowledge, the startup founders try to do all the tasks on their own. However, even the most promising startups can’t do everything on their own. What is more, it is often a recipe for disaster when they try to do all the work alone. We are witnessing many situations when startups fail to expand or even to survive in a competitive business environment because of a lack of management, expertise, and other resource problems. However, there is a way to deal with these problems. The answer is business outsourcing. What is outsourcing in the IT industry we have already discussed in our other articles, so be sure to find more about this subject! In today’s article, we will explain why you should choose to outsource when you launch a startup!
You will learn:
- What are the reasons to choose to outsource?
- What are the areas and the processes to outsource?
What are the reasons to choose to outsource?
Certainly, many questions will arise why startups should decide to use services outsourcing. There are several reasons why you should, and we will try to present each of them to dispel any doubts!
1. Ability to delegate tasks and processes.
The main problem we experience when analyzing other startups is that the management team wants to control every aspect and every area of the business. It is of course common that CEOs want to have the best control over the operations, however, in many aspects, it causes more harm than good. Unfortunately, a lot of business owners do not understand the main benefit of outsourcing. During the first months of the startup’s life, it may not seem that important, but as your business starts to grow it becomes more and more serious! All startups must consider limited in-house staff abilities. Therefore, it is required to take action to avoid labor shortfalls. It is a great idea to delegate and outsource some of the smaller and less important tasks and processes to other companies or freelancers. It will certainly save a lot of time and increase the effectiveness of the care team. What’s more, the company’s competitiveness is also increased by extending the range of its operations!
The time-saving aspect is also a very important reason why you should choose outsourcing when you launch a startup. It is a very reasonable approach to outsource some of the most time-consuming processes and tasks. The general rule of outsourcing is that repetitive tasks should be outsourced to a third party. That said, we absolutely should consider outsourcing tasks that do not directly affect development but are only process-related.
3. Competitive advantage.
Competitive advantage is another significant reason why outsourcing should be taken into consideration. Getting an advantage over the competition will allow your startup to gain more customers and better projects. One of the best ways to create a competitive advantage is by reducing the cost of the products. Outsourcing will definitely help with this goal. External providers of some services will help to reduce costs and therefore stand out above the competition!
4. Better cost efficiency.
Tight budgets and limited financial resources are common problems startup experience. Many startups find it difficult to hire internal, in-house staff that will proceed with all the tasks and processes. Hiring an employee assigned to perform a specific part of the process can be beneficial in the long run. However, in the changing and mobile environment of the IT industry, it is more reasonable to decide to outsource some of the processes. It will definitely reduce the costs, as we do not have to worry about recruitment, payment of monthly salaries and benefits. What is more, there’s no need to be concerned about possible severance pay in the event of termination of the contract. For this reason, outsourcing is a great solution to reduce the costs of the operation!
5. Ability to work on many projects at the same time.
Delegating tasks to external companies will relieve the core startup team from many time-consuming activities. Therefore, it is possible to work on many projects at the same time. This aspect is also related to the issues discussed above. With the ability to work on many projects at the same time, we gain a better competitive advantage and get better cost-efficiency. That is why outsourcing is definitely a very good idea if you wish to work on more than one project at the same time. Potential freelancers and outsourcing companies usually charge on an hourly basis, which is also a great way to manage your work.
What are the areas and processes you should consider outsourcing?
We have already discussed why it is worth deciding to outsource services in an IT startup. Now we would like to present what specific processes can be delegated to outsourcing.
Human Resources and recruiting.
Recruiting the right candidates is not an easy task. What is more, running the human resources department in a small startup may turn out to be unprofitable. When startups attempt to delegate human resources and administrative tasks to their key employees it is the first step to fall. It is a way better decision to outsource the HR function of your business. The results are that your startup can recruit and hire top candidates and also any compensation and benefits packages are tailored to improve employee engagement. All this is done without burdening the key employees.
Data Entry and Processing
One of the most common areas in business outsourcing is data entry and processing. These two areas of operations can easily be outsourced or offshored. These processes take up a lot of time and require both manual and automatic labor. Therefore, we can find many specialized outsourcing companies that are willing to help with such processes as data entry or manual processing. With all the vast amount of information companies have to work with, properly executed data entry processes, which are also outsourced can be really beneficial! It is certainly one of the most important areas to outsource if you wish to improve the effectiveness of your business.
In general, most startups and small businesses do not need a full-time, in-house accounting or bookkeeping team. The simple and easy solution is to outsource those services to a third-party specialized firm. It can be beneficial both – from the quality of service, and the cost-saving perspective. Experienced accountants often provide their services as freelancers. And if you need support from a bigger team, many companies are willing to take accounting care of your startup.
Outsourced marketing is also a great idea for your startup. Building a brand is not an easy task, and it doesn’t happen in one day. Instead of spending your own human resources and time to develop your brand, you can easily outsource this area of operation! Building a brand, website creation, social media as well as SEO – all those aspects can be outsourced to third parties. Outsourcing your digital marketing services will save your startup company a lot of time and money! Many creative agencies are experts in this field, as well as you can find many freelancers who are eager to help you with marketing. So do not hesitate and outsource your marketing!
We are convinced that the information contained in this article will be helpful and will facilitate the decision to outsource services. Remember to determine specific areas that can be outsourced and define possible benefits derived from them. Also, be sure to find out more about outsourcing and the costs related to this aspect which we covered in our other article. Be sure to choose the right outsourcing company, which can help you develop your startup and will allow you to gain a competitive advantage! Your startup will surely benefit from it.
You may also like..
When you decide to outsource software development, it’s a good idea to protect your business in case a software house doesn’t comply with the obligations or is unable to finish the project.
Outsourcing your IT needs can be a great way to save on costs and improve efficiency. It’s an easy decision to make, and it can help you improve your overall business efficiency. But how do you know which model is best for your business?
Time & Materials pricing model gives you more control and much more flexibility over the project. Let’s dive into the world of time and materials contracts and its pros and cons for your development process.