Outsourcing can free up time, reduce costs and introduce experts into your small business. But like all things, balance is key. The smartest companies still grow talent from within, says Ed Kavanagh, president of administrative and human resources at the Addison Group, a provider of professional staffing services. But if your business doesn’t have internal experts in the following areas, consider hiring outside help.
1. Human Resources
“If we step back and take a look at what happened during the recession, a large number of human resources professionals were downsized at all levels,” Kavanagh says. As a result, many HR professionals began doing consulting work. According to Inc. magazine, outsourcing HR is now a $165 billion business.
“The win here for smaller businesses especially is that they can have someone working for them who quite often has that big company background,” Kavanagh says. “These individuals have tremendous experience in the HR realm, and I think there’s tremendous value for any prospective company they’re working for.”
2. Accounting
When Stella Fayman was launching her start-up tech company, Matchist, in May 2012, she knew that accounting lay outside her expertise and didn’t want to spend the time on it. “For a small business, you have a limited amount of resources, including time,” Fayman says. “Allocating that in the most efficient way is what makes or breaks a business.”
Friends highly recommended the accountant that Fayman ultimately chose, and she couldn’t be happier with the experience. She and her accountant use the same online tools, including Basecamp for project management, LessAccounting for accounting and Expensify for her expenses. And if a new question arises, the accountant is always quick with a response, Fayman says. “Everything is so organized and efficient, I wouldn’t consider doing it otherwise.”
3. Marketing
Like many industries, heating and cooling services go through ebbs and flows. Brian Schutt, a co-founder of Homesense Heating and Cooling, found it difficult to keep up with marketing engagements during busy periods. “When it’s 100 degrees outside, I’m not thinking about the next blog post I’m going to write,” Schutt says. Rather, he’s thinking about A.C. services. But not engaging in marketing hurts him during the slow periods to come.
To outsource his company’s marketing efforts, Schutt sought referrals from friends and business owners. He then outsourced Facebook, LinkedIn, email and website content creation to three independent freelancers whose work he personally liked. “There’s a ton of freelance or small business talent,” he says. “It’s not Mad Men anymore—you don’t have to go to a firm in a high-rise office to get something communicated.”
Overall, marketing costs him less than $1,000 a month, he says. Additionally, Schutt says the company has grown every year since launching in August 2009, and that a third to a half of that growth is the result of marketing activities. And now, when things get busy, a freelancer writing a blog post for the site can interview Schutt while he’s driving from one job to the next.
4. Payroll
Forty percent of small businesses pay an average yearly penalty of $845 for late or incorrect filings, according to the IRS. Let someone trained in the industry handle the minutiae. The National Small business Association found in its 2013 National Small Business Taxation Survey that payroll taxes ranked as the second greatest administrative burden in regard to taxes, behind income taxes. One-third of the 1,500 respondents in the survey said they spend more than 72 hours a year on payroll. That’s almost two full weeks. However, the survey also indicated that nearly 80 percent of small business owners are paying more than $100 a month on payroll taxes.
5. Web Design
Zlatan Beca is the co-founder and vice president of sales for Repair Jungle, an online startup for consumers to vet auto mechanics. To get the website he wanted, Beca fractured payments: 25 percent upfront, 25 percent halfway and 50 percent at the end. That incentive, he says, was a driving force for developers to deliver a product that met the startup’s standards. “The good developers saw a greater picture and really went out of their way to build a strong partnership,” he says.
