Why You Need To Consider Outsourcing Your Business Services

Owning your own home is said to be the American dream. Owning their own business is the way many plan to fund that dream. Statistics indicate that 80% of small business starts fail within the first two years, another 10% within five years. There is no single reason, rather a combination of factors. Those factors generally include: undercapitalization, lack of planning, no experience, insufficient education, loss of motivation beyond the idea stage, inability to understand the hiring process, unfamiliar with tax and legal issues affecting small business owners, trying to do it all yourself, not knowing when to get help and how to find quality coaching/mentoring resources.

Small business owners often find themselves in burnout as they try to do it all. It's hard to delegate your "baby" to others who don't have your dreams for the future. Are those dreams based on reality? To get anything generally requires we have to help others get what they want. Business owners who beat the odds recognize that no matter what, they are in the customer service business, first, middle, and last. Small business owners often bought into the "build a store and they will come" fantasy only to discover that sinking all their capital into a location before they had a market left them financial drained. Many small business owners either develop or market a unique product they hope everyone will want, or they find a niche that is underserved and fill it.

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Illustration of a Unique Product: You may have developed the greatest widget ever. It does it all, it can be folded, spindled and mutilated and it will still deliver perfect service every time. For those of us in the real world, we recognize that almost any product has a predecessor. What sets your product apart is how you market it. Take for example how Volvo began marketing their vehicles.

Remember how they would show a head-on crash and you were amazed that the hood folded up in an upside-down "V" protecting the windshield; and, the engine was slanted to go under the car instead of through the firewall into the passenger compartment? We all thought that was innovative and showed superior design, so much so that generations of us bought a Volvo, paying as much as 10-15% more for those 'safety' features. Now, the truth: American auto manufacturers had been using similar safety features for years! Look under the hood of your American made car or truck and note the notches cut into the steel on each side. Yup! Those are there to collapse the hood into the upsidedown "V" position if you get hit head on. Their engines are also designed to drop and go under. That my friend is the power of marketing; but the difference is that Volvo TOLD us about it and that made them look like champs.

What do you do that everyone else does in your business? Who markets that concept as though they invented it? Try this one that I read recently:

"Who do you think brought the idea of payroll services to the market? Why settle for the Johnny-come-lately 'payroll experts' who want to copy our success? Allow us to become your payroll service provider. Our history, experience, and training make us the best choice for your business and we will still be here long after the others are gone. Your payroll services are in the right hands, if you will call today. Cheerful customer service people are standing by for your call. Call XXX-XXXX to put the strongest payroll service provider to work for you. We are ready to serve."

Now, take that ad apart. Did they actually say they "invented" the concept? Not at all, but by clever wording, they positioned themselves as the most established provider. Note how the ad creates the impression that newcomers are merely imitators, without anything original to offer. The third sentence reinforces the first two. The fourth sentence takes the assumptive role that you are already a client; you just don't know it yet. The "if" creates a since of urgency and gives you the sense that your decision is completely yours but is a clever way to push for the decision "today". Finally, the transition is made to calling for an appointment, that nice people with your best interests at heart are eagerly waiting by the phone to fulfill their life-long dream of helping you. The ad is a work of sheer genius.

The truth? This supposed inventor of the concept proved to be a startup company run by a very nice lady working from her home. She had just completed a course on payroll processing after purchasing a payroll module for a well-known accounting software package. Her total experience in payroll included six weeks on-the-job training working for someone else. In our interview, she admitted that the ad had already produced thirty new customers in the first 60 days. She had beat out over a dozen established payroll service vendors who only relied on word of mouth. By running a couple of ads in the local flea market newspaper, posting it on her chamber of commerce website, and by targeted mail, she was processing over 3,500 payroll checks for her clients. At $1.60 per employee per pay period her revenue stream was well over $11,000/month (two pay periods X 3500 X $1.60).

Why did she call us? She was overwhelmed by the volume of work. She didn't have time to stop and hire someone to help her and she was working 14 - 18 hour days. Her business grew so fast that she needed an actual office, a secretary, additional bookkeepers and customer service help. Also, despite having learned to use her accounting software and passing the course for bookkeeping, she didn't have the time to even track her own business. She saw a listing for our company on a local business web page and contacted us for help with hiring and training services, office location finding services, help setting up her new office (furniture, phones, lease agreement negotiation, address changes, business licenses, business cards, brochures, etc.).

Have you considered making a list of things that you know need to get done and then outsource those tasks? The time you save on petty tasks will allow you to grow your business. That is the number one goal you have, growth. If something isn't growing, it's dead! You need to be marketing your business, its services, its image. Hire others to do the day-to-day work and oversee, don't micromanage. Temps are readily available in the current market. For the first time in many years, you can find MBAs with 20 years experience searching for temp and part-time jobs. Take advantage of the times to gain all the expertise and knowledge you can while it is offered.

Here are just a few of the tasks and functions available through outsourcing today:
  • payroll management
  • accounting/bookkeeping
  • payables and receivables
  • collections
  • competitive analysis
  • sales projections/forecasting
  • long-term planning
  • marketing/advertising
  • building a viable sales force
  • computer system setup
  • software installation and setup
  • data migration to upgraded systems
  • computer repair and maintenance
  • web site setup and management
  • employee benefits, health and other insurance
  • finding and securing needed financing for expansion and growth
  • key man insurance, 401K
  • developing a commission/bonus structure that is fair and rewarding
  • finding locations for expansion
  • negotiating with vendors
  • interim management
  • temporary staff hiring
  • staff and sales force training
  • safety/quality inspections
  • city/state compliance
  • quarterly/annual taxes
  • HR functions like interviewing, and annual reviews
  • setting up phonebook ads and other advertising
  • negotiating better supplier rates
  • finding new suppliers
  • partnering with other business owners for support
  • networking
  • customer tracking
  • customer data base management
  • new market development
  • research and development

Rank the items that you feel are most important to the growth of your business. Carefully review which items are dependent on other things happening first. Separate out the tasks that are independent and delegate them to the person best able to get the job done or consider hiring a temporary assistant to locate the people and companies best suited to help you cover those tasks. Then, concentrate on the more important tasks. Ask yourself, "If I found a capable person would I be willing to delegate this task?" Then, make your goal to find and hire a temp or long-term individual to accomplish that specific task. Hire for the task!

When you contract with a consultant offer terms you can afford like: $45.00/hour plus a % of revenue growth above $_____________ over the next six months. This ties payment to performance, just like you! Keep these tips in mind, and if we can help, give us a call at SAS Business Management Consulting. Initial consultation is free. I am of course available. (Sam Shorrosh, AA, BS, MA, PhD) 251-609-3563

Dr. Sam Shorrosh holds multiple degrees in accounting, business administration, and education and has been in the business consulting profession for over 25 years. Experience, education, industry diversification.

Sam enjoys giving presentations to companies and groups who desire training in leadership or just need some motivation. His articles on workplace conflict, leadership and other subjects are very high quality and use multi-media to stimulate the minds and hearts of his audiences. He is available for speaking on a limited schedule. Call him for a discussion of your needs.

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