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Beginner’s Guide to Outsourcing in NZ

Outsourcing. Does it sound such a scary word to you? For many new and small businesses, the answer is a resounding yes! Outsourcing involves paying someone to do something related to your business. If cashflow is short or you struggle with the thought of others doing something for your business, outsourcing be thought of as a big no-no.

We thought it was time to shed some light on this ‘bad word’ known as outsourcing, explaining the benefits of doing it and identifying exactly what tasks can be outsourced.

What is Outsourcing?

Outsourcing is the hiring of a freelancer or business to do a particular job for you. A good example is engaging the services of a bookkeeper to keep your accounts straight. You pay them to do things specific to this task. You remain in full control of what they are doing and your business.

By far the biggest hurdle for new businesses is getting over the mindset of having to pay someone else to do something they believe they could do. We completely get that. When you have a new business, it’s ‘your baby’ in a way and you want to do everything to help it grow. Becoming a jack of all trades and a master of none is very common. It’s the master of none that is the concerning aspect. By doing absolutely everything, you are not focusing specifically on your strengths; the things that are going to help grow your business. Instead, you spend more time than necessary having to get your head around figuring out (and possibly doing a poor job) how to do something. It’s this task you could have outsourced, and while it would have cost you money, it frees up your time to use your strengths and grow your business. A far better alternative, in our opinion.

Why is Outsourcing a Good Idea?

The best way to answer this is by listing the benefits that outsourcing can provide you with. They include:

  • Saving you time, which saves you money – forget spending 12 hours doing your accounts, when a bookkeeper could do the same amount in one hour!
  • Frees you up to do the things you enjoy doing – you don’t need to do everything, and that especially means the things you dislike doing. You also don’t need to work every hour of every day, which means you can still have a life outside of your business.
  • Cheaper and less hassle than having an employee – there is no overtime, holiday pay or KiwiSaver to worry about. You simply have a contract with the person or company you are outsourcing to, which states what you want them to do, when they’ll do it and how much you will need to pay.
  • Giving you access to new skill-sets – not everyone is good at writing, sewing or using social media. If you are not confident or have little knowledge about a task needing to be done for your business, outsource it to someone who does know what they are doing.
  • You choose how long you need their services for – whether it is for one day a week, the next two months or only at certain times of the year, you decide.

There are also three things to look out for which should be triggering you into thinking it is time to outsource:

  • There is a more cost-effective way to get tasks done
  • Some tasks take too long for you to complete
  • You are unable to do what really needs to be done to grow your business because you are stuck doing the mundane daily business tasks

Once you’ve decided to outsource, next comes deciding what that task will be, and who will do it for you.

Choosing What Business Tasks to Outsource

Start this process by firstly identifying the challenges you are facing in your business. These may include chasing unpaid invoices, posting on social media, not having any free time anymore or struggling to understand how to take your business to the next step. Note down the tasks you enjoy doing and where your strengths are, as well as the ones you hate doing and struggle with completing.

This list should have identified a number of business tasks. Group them into levels of importance and consider which ones you would be happy to give to someone else to do. You’ll also need to consider the cost of outsourcing each task and if outsourced, what return will it give you back in terms of you being able to do something else?

Common tasks new and small businesses outsource include:

There are some tasks though, that shouldn’t be outsourced. These are the absolutely critical things your business does that nobody outside of it would understand how to do. This can include things such as professional development, company culture, manufacture of a highly specific product, or particular service.

Once you have identified exactly what you want to outsource, it’s time to find the right person or company to do the work.

Choosing Who to Outsource to

While it’s not as time-consuming as hiring an employee, it does take time to find the right person to outsource your work to. If you haven’t already got someone in mind, a good place to start your search would be to ask for recommendations. Word of mouth is one of the easiest ways to find and learn about potentials. You can get honest feedback from others and no sense of pressure to hire them.

Otherwise to find freelancers or companies are to look for recommendations on websites, social media or networking groups. Visit their website and learn more about the services they offer and how they work. Many are happy to have a free chat with you to discuss your needs and explain how they could help meet them. If you are wanting to meet in person, then choosing someone local becomes important. But if you are happy to chat via Skype, phone or email, then their location shouldn’t be a factor in your decision.

It’s also important that you contact your shortlist of potentials to ‘interview’ them, in a way. Asking for references or clients to talk with helps you learn more about how they work. You’ll also see what their communication is like, be it by email or phone. It’s a good idea to use their services in a small scale first, before signing any long-term contracts. In regard to the contract itself, read the fine print regarding any cancellation or other penalties you may be up for.

At MBP Online, it’s true that you can outsource all of your accounting and bookkeeping tasks to us. But we can also help you with keeping on top of your taxes and making future plans to grow your business. Based in Taupo (where our espresso machine is always on for clients), we work with both local and NZ wide businesses. Get in touch and let’s have a chat about your needs and how we can help.

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