How to Afford Outsourcing as a Small Business

Two Methods:Planning Affordable OutsourcingStarting Affordable Outsourcing

Outsourcing is a business practice where you hire outside contractors to help with a function or project. Contractors are not considered employees; they are either independent freelancers or another business that has been given a paid contract to deliver a product for set period of time. Outsourcing is not reserved for companies with large budgets. It is usually essential for a small business to contract with providers occasionally, because a small workforce is not likely to be able to do all the functions required to have a successful business. Small businesses often outsource IT, bookkeepers, search engine optimization (SEO) articles, social media marketing, graphic design and more. Outsourcing, instead of hiring new employees, often frees up fixed costs and turns them to variable costs. It can often save a business money in the long term. This article will tell you how to afford outsourcing as a small business.

Method 1
Planning Affordable Outsourcing

  1. 1
    Analyze your core mission. This should be identified in your business plan. Make sure your current employees are covering strategic parts of your company's plan, and then you can look to outsource the things that are not vital for day to day business operations.
    • Outsourcing takes time to implement, and it occasionally requires some training, so it is important that you don't put your vital functions in the hands of someone with less accountability than employees. After you have your core business mission taken care of, move on to increasing the function and efficiency of your business through outsourcing.
  2. 2
    Analyze your staff's abilities before making plans to outsource. Call a meeting or do performance where you ask your staff what other skills they have that are not currently being used. For example, someone you have hired as a sales associate may also be adept at social media marketing, so you can appoint them to do 1 hour of it per day.
    • Noting your staff's capabilities has 3 unseen benefits. You get a better grasp of the capabilities your company has, allowing you to increase your capabilities without adding employees. You can identify any weak areas of your labor force, and layoff employees that are not doing their job. Employees may also enjoy diversifying their job description. A new task gives them added experience, a more valuable place in the company and it allows them to break up their duties.
  3. 3
    Meet with upper management to prioritize and strategize projects that could be outsourced. Prioritize these projects, according to cost and timeline. Assign new projects to current employees, if you have identified new skills and they have the time to do them.
    • Common ways that small businesses outsource are customer service/help desk, IT, online/print marketing, graphic design, public relations/reputation management, database management, brokers, bookkeepers, website hosting, legal services and virtual assistants.
  4. 4
    Identify hours that you and your employees spend doing projects that could be outsourced. Calculate, according to hourly wage, the money spent doing projects that could be outsourced. Separate the amount of time and money according to project, to see what company money and time could be better spent elsewhere.
    • These are "lost" hours that are rarely calculated. Choose a value for your time, as well as your employees' time. Doing a job for hours that you are not proficient at may be costing you hundreds or thousands of dollars each week. If your time can be better spent increasing sales, business contracts or more, then you can identify ways that you can save money by outsourcing.
  5. 5
    Create an outsourcing budget. This can be money that is not being used in current projects, leftover project money and/or the sum total of money that can be saved if you and your current employees are free to help customers or actively increase sales or services.

Method 2
Starting Affordable Outsourcing

  1. 1
    Start by outsourcing 1 project at a time. It is important not to do all your projects at once, because it will be chaotic for the company and you are paying all your variable costs at once. Assigning 1 person to lead the outsourced project and doing things slowly will result in fewer mistakes and risks.
  2. 2
    Assign an hourly or project cost according to your budget. The person who leads the project should be aware of the cost when choosing a contractor. Keep aside a portion of the overall budget for employee training and materials, if necessary.
  3. 3
    Find contractors for your project. There are an increasing number of contractors or freelancers in the workforce today, so the rule of supply and demand is on the small business' side. Many people work from home, so they have fewer overhead costs and can charge affordable prices.
    • Post an ad online. Use Craigslist, Angie's List, Simply Hired, Indeed or another website to post your contract job. You will get many responses, so be sure to keep the application time between 2 weeks to 1 month. Instead of writing "Depends on Experience (DOE)" in your salary section, ask the contractor to bid on the proposal. Choose someone with experience that fits within your budget.
    • Get recommendations from other businesses. Many small businesses are already outsourcing. If you like the look of someone's marketing, graphic design or another portion of their business, ask if they are using a contractor. Recommendations are the best way to find experienced people quickly. You can go to the contractor directly and ask for a quote or offer a job.
    • Look online for a service. A simple Internet search will list dozens, if not hundreds, of providers. Ask for a quote, a demo and ask to speak to people who currently use their product. If you are outsourcing something that you plan to use throughout the year, such as IT, web hosting or customer service, make sure there is a satisfaction guarantee, so that you can get out of a contract if you are not happy.
  4. 4
    Keep tabs on performance and hidden costs. Have your project leader communicate regularly about progress by email, Skype, phone and/or in person. In most cases, they will be happy to work with you and adjust their schedules if there are problems.
    • Advocate an on-time delivery of the contract. If the contractor is providing a product, such as a website, press release, or brand, make sure you stick to a schedule. Allowing a contractor to operate without a time limit is a costly mistake.
  5. 5
    Make sure training is included in the delivery of the final product, if applicable. This is often the case with websites or IT. Make sure a few people in the company know how to use the information or product that has been provided, so that you aren't relying on 1 person or the freelancer, if an issue arises.
  6. 6
    Evaluate the success of the project. Launch your next freelance project after the last 1 is completed. Once you have the process in place, you can begin scheduling freelance projects on a yearly timeline, according to what your business can afford.


  • Do not micromanage outsourced projects. Although it is important to ensure a project isn't costing you too much, contracts move more quickly if the contractor is able to communicate and get details from 1 person. Over or muddled communication will add to costs and the time the project will take.

Things You'll Need

  • Outsourcing budget
  • Employed project leader
  • Online ad/Recommendations
  • Training
  • Satisfaction guarantee for long-term projects
  • Contractors

Article Info

Categories: Buying & Forming a Business