Three big mistakes businesses owners make when choosing an outsourcing partner

It’s wise for all businesses to explore outsourcing. Get it right, and it can save you save you money, increase productivity, and give you access to skills and resources that can help you further your business.

New businesses, in particular, will benefit from outsourcing because they usually don’t have the capital to hire employees, which means certain areas of the business may be lacking.

Outsourcing can fill these skills gaps without the need to pay salaries and have the commitment of hiring employees. However, many business owners don’t understand how to leverage the benefits of outsourcing and they make some simple mistakes that cost them dearly.

If you are considering outsourcing areas of your business, these are three of the big mistakes that you need to avoid. 

1) Not considering the outcomes 

When you are deciding whether you should outsource an area of your business or not, it is important that you consider the outcomes.

Good outsourcing decisions are based on the smartsourcing concept, which outlines five key outcomes to consider before outsourcing any part of your company. These are:

  1. Cost reduction.
  2. Speed acceleration.
  3. Effectiveness increase.
  4. Consistency improvement.
  5. Better risk mitigation.

If outsourcing will not lead to these five outcomes, it is not considered smartsourcing and you should reconsider your decision. 

2) Not considering the cost of inaction 

Calculating the costs is so important when you are deciding whether outsourcing is the right choice or not. However, it’s important that you consider the cost of inaction.

Many business owners think about the monthly cost of hiring an external team and decide that it is not within their budget. But think about how much money that expert team could save you by improving processes and cutting waste.

How much will your revenue increase when productivity goes up? When you are crunching the numbers, it is so important that you consider the cost of inaction as well as the cost of outsourcing.  

3) Not interviewing candidates 

You should think of an outsourcing partner like a potential new employee, and treat them in the same way.

Find a few different options and narrow them down by looking at their credentials, and then invite the remaining ones in for an interview. This will give you the chance to learn more about their skills and expertise but it also gives you an indication of whether they will be a good fit for the company.

It is important that you have a good working relationship with outsourcing partners, so don’t just hire them based on their credentials alone. So many businesses fail to interview their potential outsourcing partners and they end up working with somebody that doesn’t share the vision for the business and doesn’t fit in well with the team, which has a big impact on productivity. 

Before the interview, it is also a good idea to conduct a background check or at least Google the person and see what you can find. Always get references from other businesses that they have worked with as well so you can be sure that they are reliable. 

As long as you avoid these simple mistakes, you will be able to find the perfect outsourcing partners to help push your business forward. 

Photo by Emma Dau