Running a business can be a daunting task. If you are just starting out, it can be understandable to be hands-on with the business. But being an accountant, customer service, telemarketer, and sales agent at the same time can be overwhelming. Also, it may hamper your ability to focus on business growth.
As your business grows, you start to realize that you cannot do it all by yourself. It’s okay at the start but it becomes overwhelming when your number of clients starts to increase. When you need some help with running your business, offloading some of the tasks to an outsourcing company makes sense.
But outsourcing goes beyond delegating tasks to the provider. There are also other factors that you need to take into consideration. If you are just getting started with outsourcing, you are bound to make mistakes that could prove detrimental to your business. In this article, we take a look at 10 of the most common outsourcing mistakes every business should avoid.
- Not Having A Clear Plan
- Setting High Expectations
- Jumping In Too Quickly
- Going All In
- Not Knowing What To Outsource
- Hiring The Cheapest Freelancers
- Not Clearly Defining Terms of Partnership
- Not Embracing Technology
- Avoiding Research
- Not Finding Your Niche
Common Outsourcing Mistakes
Here are the common mistakes you should avoid when considering outsourcing.
- Not Having A Clear Plan
One of the biggest mistakes you can commit is not having a clear plan when outsourcing to a BPO company. It is like going into battle without armor and ammunition. Not having a plan might prove harmful to your business. Before looking for a potential provider, make sure that you have a roadmap on how to proceed with your potential outsourcing partner.
List down the tasks and processes that you want to outsource. Determine the number of people you intend to hire for your project and clarify your price range. Also, you should have a clear budget. Is the outsourcing plan aligned with your vision, goals, and ambitions?
Having a clear plan will help you clear track of your project’s progress, be able to see which parts are doing great, which parts could be improved, and which aspects need to be addressed. Proper planning helps define objectives, strategies, and actions. Having a plan is key to your outsourcing success.
- Setting High Expectations
Outsourcing is not a magic pill that can cure all your business woes in one go. It won’t instantly lead to an increase in the number of your customers or lead to an immediate increase in ROI. While outsourcing offers innumerable benefits, there are still limitations to what it can do. Anticipate sensible and practical results to avoid getting disappointed.
When outsourcing, it is important to keep your expectations in check. Don’t put your hopes high right away as you could have your hopes dashed when your initial perception did not match the reality of your situation. When your expectations are not met because you set them too high you could lose your motivation.
Conversely, you should not set your expectations too low. It can be as damaging as high expectations. It would not get you motivated to succeed as well. Set modest and achievable targets. Don’t expect too much from the outsourcing provider and yourself. Give your new business venture some time.
- Jumping In Too Quickly
If you are outsourcing for the first time, your excitement to offload tasks can get the better of you. Outsourcing without first understanding the complexities of the possible partnership could prove disastrous. You may have heard of companies outsourcing their whole department right away. Resist the temptation and take your time with outsourcing.
Before hiring an outsourcing provider, you need to be sure that you are really ready. Start with low-volume accounts first to test the waters. Maybe you can hire one or two as part-time employees so you will know if outsourcing is really for you. Don’t put someone else in the driver’s seat if your car is not even ready to drive.
It would be a good time to wait it out first because the best outsourcers are less likely to work with you. Maybe your product is not yet that matured. You can hire someone in-house or make customer service a part-time job. This will help you stay closer to customers and pay attention to their feedback.
- Going All In
It would be a huge convenience if you can outsource every task on your business. But this can be a huge mistake. For starters, there are functions that should stay in-house. At the beginning, one such function is customer service. Your customers expect a personal touch when using your business. If you outsource it, the outsourcing provider may have little or no understanding of who they are and what their needs are. This might force them to do business with the competition instead.
Don’t outsource tasks just because they cause inconvenience to you. If your team is capable of completing these tasks, it would be best to keep them in-house. Outsource only if your in-house team is already loaded with responsibilities. Another reason is if outsourcing to a professional will ensure the delivery of quality work.
So think carefully before outsourcing functions. Identify the strengths and weaknesses of your team. Determine which ones should be outsourced and should stay in-house. Outsource only when there is a specific need to do so.
- Not Knowing What To Outsource
Business owners go to outsourcing for various reasons like low-cost, less management, and high-quality work. However, they make the mistake of going into outsourcing without fully understanding the impact it will have on their business. They do not have an idea on what aspect of their business they will outsource.
When it comes to outsourcing, not all tasks should be handed over to an outsourcing provider. There are tasks that are best left in-house like customer-related ones. It is a huge mistake to take away something that contributes to the customer experience. In relation to this, don’t outsource tasks that you do not have enough experience on.
For example, don’t delegate web design to a third party if you do not have knowledge about the role. How can you assess the quality of the provider if you don’t know about it in the first place? This places you at risk of hiring the wrong person for the job.
- Hiring The Cheapest Freelancers
If you are just starting out, it can be understandable to hire the cheapest freelancer that you can find on the market. Indeed, freelancers have one of the lowest hourly rates and one of the reasons to outsource is cost. While you may want to capitalize on a web designer with one of the lowest hourly rates on Freelancer or Monster, there are possible repercussions that can impact your business.
For one, the freelancer may have other clients to compensate for the low rate you are charging them. As a result, the quality of their work may suffer. Also, they could end up taking the project but outsourcing the tasks to someone else.
An additional $1 to $2 an hour will not hurt because you get an assurance of quality and reliability on the part of the freelancer. Look past the rates and focus on finding the best possible freelancer.
- Not Clearly Defining The Terms of Partnership
Being a sole proprietor can be daunting so it is best to have a partner in running your business. But one mistake you can have is choosing the wrong partner and not identifying the terms of the partnership. Choosing the right provider is important because you will be working with them for long term so it is important that they meet the following criteria:
- They should have a similar level of success as yours to make the partnership worthwhile
- The provider should have a similar vision and values
- You should have a written buyout agreement amenable to both parties
There should be clear and well-defined roles to make sure that there is no overlapping of roles which could lead to competition between you and your partner. Studies have shown that 80 percent of business partnerships eventually fail because of conflicts between the partners.
- Not Embracing Technology
One of the benefits of outsourcing is that you get access to the latest technology. However, many businesses make the mistake of not leveraging technology. For most businesses, new technology can seem intimidating at first. Technology leads to efficiency, saves you time and money, and opens you up to more opportunities.
Adapting to technology can be difficult in the early stages but it can bring both short and long term success. Technology can help you scale your business. With technology, your team can serve customers better. In fact, customers prefer to do business with companies that utilize technology. 70% of customers say technology makes it easier for them to take their business to a competitor if needed.
Not leveraging technology when outsourcing gives customers the ability to switch their loyalty to a company that does. Also, everything is now built around technology so not using it will make you lose business to your competitor. Leveraging technological advancements like Big Data, cloud computing, automation is your ticket to pushing your business forward.
- Avoiding Research
One of the biggest mistakes you can make when outsourcing is not doing enough research to find the right outsourcing provider. Choosing the first company that you find is a huge mistake. Just because it is the first does not mean it is the best. You need to meet other companies, understand what they do, and pick the provider that fits you best.
By doing your research, you will be able to determine the quality of service they deliver and if they are able to meet customer expectations and standards. You can ask for references from previous or current clients to give you an idea about their potential and capabilities in the industry.
Research is necessary when searching for the right outsourcing provider. You want to make sure that provider you have in mind has the reliability and experience to handle the projects you will make them handle.
- Not Finding Your Niche
It can be tempting to offer your products and services to a broad market and target every possible client in the market. The problem with this is that the customer you are targeting may not be appropriate for the services you are offering. By doing this, you may be losing more money instead of getting a return on your investment.
Not finding your niche can be detrimental to your business because you could end up sacrificing your business core values and strategic objectives. By finding your niche, you will be able to understand your ideal customers, map out their personalities and buying behavior so you can focus on their specific needs.
Outsourcing gives you access to experts in your chosen niche. For example, if you are running an online store, you can choose a provider with expertise in e-commerce. They have the tools and methodologies to effectively address your customer’s needs.
Outsourcing is not as easy as finding a provider. There are certain factors that you need to consider. By being aware of these 10 outsourcing mistakes, you will be able to ensure the success of your partnership with the outsourcing provider.
Outsource Your Needs To airisX
Outsourcing allows you, as a business, to focus on your main competencies and operations and forget the hassle of sharp learning curves when the task falls outside your company’s core area of business.
By outsourcing to a leader like airisX, you will be able to scale up quickly by getting the right resources, processes and technological infrastructure. No matter what your scaling requirements are, airisX will give you the best optimized solution and you will be able to focus on other aspects of your business. Your back office operations will be simplified, giving your users a high-quality experience.
The most important advantage of working with airisX is that we enable you to stand out from your competition by providing you with a differentiating customer experience and best practices, which is the result of working with some of the world’s biggest and disruptive companies.