Small Business Checklist: Business Process Outsourcing

As many of you know by know I’m a sucker for bootstrapping for small business and start-up business, like SOHO-, SME, SMB-, Micro-, Lifestyle-, Home-, DIY-, Hobby-, Boomer- or Personal business, like professional, contractors, freelancer, self-employed, sole-trader and virtual assistants, and outsourcing is a big part of my bootstrapping philosophy, so here a re a few pointers:

1. To outsource, or not to outsource …. . I would always outsource non-critical and non-core business functions, in other words, whatever it is that makes your small business different and unique you do yourself, because that is what earns your money. Anything else could and probably should be outsourced (see: outsourcing options for small business).
2. Do It Online. This will allow you to stay in close touch with your supplier, and get real time up-dates and feed-back - there are other benefits too.
3. Don’t abdicate. Outsourcing does not mean to forget these tasks, you just delegate them to someone outside of your company, you are still responsible.
4. Know who you are dealing with. Not all partners are the same, one virtual assistant is not like the next, the same is true for accountants, bookkeepers and other service providers.
5. Don’t become a favor. If your future partner says things like: ” I’m not sure if I have time, let me see.” or you new service provider makes you feel, as if they are doing you a favor, don’t deal with them, you need partners and not people you feel guilty calling.
6. Nobody answers the phone - put the phone down and do not call back. Anybody in this kind of service business should understand what service is all about, not answering the phone shows they don’t - they will leave you high and dry sooner or later.
7. Get references, if you can. Anybody who has been in business for 12 month or more should be able to give you at least one or two references. Don’t shun new service providers, check their CV, remember you may get a good deal and it is good to be one of the first customers.
8. Get a back-up. Negotiate a back-up deal if you can, so if your primary provider falls ill, you have a back-up, or divide the work between two or more service providers to begin with.
9. Pay on time. You want good service, pay on time. You want professional work, pay a decent retainer or hourly rate. If you don’t, you’ll be last on the work and service agenda, that means you business suffers. If you can’t afford the service don’t hire them.
10. Get at least three quotes and compare them. Just to make sure you don’t get taken to the proverbial cleaners, and to compare service levels. Don’t be afraid to ask for an explanation, if you don’t understand something.

Outsourcing is good for your fix-cost structure, should make you more professional, and help you to concentrate on your core-business. If it becomes a distraction, deal with it immediately, if need be change supplier. ST.

5 Responses to “Small Business Checklist: Business Process Outsourcing”

1. Floyd Buenavente
   http://www.microsourcing.com/
   
   Said on March 14th, 2008 at 7:50 am

   Thank you very much for these pointers Stefan. I really appreciate it.

2. Roland Quast
   http://www.ebstrada.com/ph/
   
   Said on March 22nd, 2008 at 2:23 am

   Great article! I myself started an outsourcing company in the Philippines to support the development of an application for my start-up company. I had to do this because I had two options, to either get venture capital to pay for the development of my application, or work part-time and use the funds to pay for the development of my application in the Phils. I think outsourcing is one of the best ways for any business to supplement their development.

3. Jay Paul
   http://www.jvptechnology.com
   
   Said on April 28th, 2008 at 4:06 pm

   Very Unique article for small and medium business solutions.
   now We will use your some method successfuly to gain more business.
   i ‘ve got my goal is business managements can attract more customers from your first customer.
   it will help to many Users of outsource.
   Thanks
   Paul

4. Legal Outsourcing
   http://blog.law-scribe.com
   
   Said on August 28th, 2008 at 5:43 pm

   Legal process outsourcing deals in legal research,document review,deposition,intellectualproperety,IPR,transcription,patents,copyright,research.

5. Outsource Sales
   http://www.insidesaleslab.com/Sales-Outsourcing.htm
   
   Said on September 24th, 2008 at 12:01 am

   Every one of those 10 tips was truly wonderful. Many of them are common sense issues, but it always helps to have a reminder. If a business owner could consistently behave in line with the tenets, there’s no way he couldn’t be called a success. Great post!

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