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Outsourcing: Three Ways It Can Help a Small Business

Wednesday, June 1, 2016

Vernon Menard has turned outsourcing into a fine art at Choice Translating in Charlotte, N.C. His 13-person company relies on foreign-language translation freelancers in 80 countries to maintain an edge over competitors. Menard, who is COO at the firm that he owns and runs with his wife, Michelle, president and CEO, says it allows them to be more nimble in the marketplace than competitors that hire full-time employees who aren’t fully occupied during slack periods.

“The big players in our industry have that talent sitting on the shelf and are paying for it whether they use it or not,” says Menard. “Because they have that cost load, they may be tempted to leverage those people outside of their areas of expertise.” Outsourcing, he says, gives Choice Translating the advantage of being able to work with the best translators around the globe for each job, always have native speakers translate for clients, and offer its services at a lower cost. It seems to be working. Menard says the company is profitable and on track to bring in $3 million in revenue this year.

Choice Translating is just one among a growing wave of businesses that are turning to outsourcing to keep costs down and quality up in many company divisions, from HR to technology. One sign of how employers are relying more on outsourced talent is a 2015 report by the U.S. Government Accountability Office, which found that 16.2% of the American workforce consisted of contractors and self-employed workers in 2010, up from 11.1% in 2006.

Many small business owners find that outsourcing tasks that require special expertise frees their employees to focus on their core mission. Currently, for instance, 41% of small businesses outsource their payroll processing, according to a 2015 survey by the National Small Business Association.

The key to outsourcing success is to be strategic. Here are some approaches to help you get the most out of it.

Clear the decks

One form of outsourcing—unloading the jobs you don’t have time to do—frees small business owners to focus on the core of their business. Genevieve Bos, managing partner at Thought Capital in Atlanta, outsources tasks she considers time consuming, such as accounts receivable. She says it pays off at her 10-person business consultancy by helping her work with top talent on a start-up’s budget. “You can get a high level of expertise with very reasonable operating costs,” she says. Plus, she estimates that by outsourcing her accounts receivable function, she saved about 50% of the cost of hiring a new employee.

Expand your reach

Taylor O’Shields, co-owner of The Place for Flowers, a five-employee florist in Charlotte, N.C., outsourced the digital side of his business. Rather than build a website in-house, O’Shields hired the Flower Shop Network to create and host his site and send orders to him from out-of-state clients who want to send flowers locally—adding to his revenue. He, in turn, pays a portion of the revenue earned from website orders to the network. “It’s nice,” he says. “We’ve been with them for several years.”

Tackle projects more efficiently

Houston Frost, who co-founded the prepaid debit card company Akimbo Financial in San Antonio in 2010, built his business on outsourced technology. To process the firm’s prepaid cards, Frost hired a specialized provider of that service. Building the technology in-house would have not only been time consuming but also required an investment of $500,000 to $1 million. “Outsourcing saved us from a significant capital investment during the early stages of our business and enabled us to get our product in the market faster,” he says. According to Frost, it paid off.

At Windstream, we believe there’s nothing small about small business. In a rapidly evolving and increasingly connected environment, having the right solutions and services can be a critical driver of SMB growth and success. Windstream offers products and services like auto-sync data backup and managed web design that allow owners to focus more on running their business and less with behind-the-scenes maintenance. For more information on Windstream services for small business, visit smallbusiness.windstream.com.

For more information on Windstream services for small business, visit smallbusiness.windstream.com.