Control Capital Costs
Cost-cutting is the major factor to outsource. Outsourcing converts fixed costs into variable costs, releases capital for investment elsewhere in your business, and allows you to avoid large expenditures in the early stages of business. Outsourcing can also make your firm more attractive to investors, since you`re able to pump more capital directly into revenue-producing activities.
Increase Efficiency
Companies that do everything themselves have much higher research, development, marketing and distribution expenses, all of which must be passed on to customers. An outside provider`s cost structure and economy of scale can give your firm an important competitive advantage.
Reduce Labor Costs
Hiring and training staff for short-term or peripheral projects can be very expensive, and temporary employees don`t always live up to your expectations. Outsourcing lets you focus your human resources where you need them most.
Start new projects quickly
A good outsourcing firm has the resources to start a project right away. Handling the same project in house might involve taking weeks or months to hire the right people, train them and provide the support they need. And if a project requires major capital investments, the startup process can be even more difficult.
Focus on your Core Business
Every business has limited resources, and every manager has limited time and attention. Outsourcing can help your business to shift its focus from peripheral activities toward work that serves the customer, and it can help managers set their priorities more clearly.
Level the Playing Field
Most small firms simply can`t afford to match the in-house support services that larger companies maintain. Outsourcing can help small firms act “big” by giving them access to the same economies of scale, efficiency and expertise that large companies enjoy.
Reduce Risk
Every business investment carries a certain amount of risk. Markets, competition, government regulations, financial conditions and technologies all change very quickly. Outsourcing providers assume and manage this risk for you, and they generally are much better at deciding how to avoid risk in their areas of expertise.
Proper Bookkeeping
Bookkeeping isn’t just a means of satisfying the tax man, it can tell you an awful lot about your business – how well it is performing, how you could cut costs, which of your customers are buying from you the most etc. So Bookkeeping is extremely important. In order for your accountant to provide this information for you, they will need a certain amount of data, which you have pulled together over a twelve-month period.
Neglecting your book keeping could cost you a lot of money in the long term as it would take your accountant twice as long to draw up your accounts at your year-end. Life is hectic enough when you first set out in business, but you should always make time for book keeping. If you can afford it, get some one in to help keep your books in order.
