Because entrepreneurs are busy they often outsource some of the business operations, sometimes operations that are really important for growth or operations. This is necessary since without it there would be a huge risk of becoming overburden. Actually, one of the main reasons why startups fail is the fact that there is too many things have to be done and too few people do them. Outsourcing steps in to help but this is not a miraculous solution. It is really important that you do it right. Unfortunately, most entrepreneurs make mistakes. Those that are the worst are listed below. Avoid them at all costs!
Using The Cheapest Options
Small businesses often lack funding so they will quickly look for outsourcing options in order to build a team or to relief some of the day-to-day operation strain. The problem is that entrepreneurs tend to think only about prices, especially when they start their first business. That ends up hurting the company on the long run since really cheap outsourcing is almost always a list of low quality services.
You use outsourcing because you want to save money but this is when costs are lower than a full-time employee. Sometimes the better option is the full-time employee and you do want to be sure you are receiving adequate quality for your business. You will get exactly what you pay for. What you need to do is create a budget, stick to it and choose the highest possible quality based on how much money is available.
Forgetting About Location Importance
When you create a team it is really important that you understand culture differences and you take them into account. There will be different standards that apply based on where the worker is from. Learning curve can easily cost thousands so even if you think outsourcing is cheaper, it is possible that this is not a beneficial business move. Before you will hire a person from another country, be sure you analyze time and culture differences. That will impact worker communication and relationship.
Improperly Managing The New Team
If the manager is not experienced and does not properly handle the team that includes outsourced workers, it is a certainty that things will not be as effective as they could be. No matter whom you hire or skill and competency levels, guidance and instruction are necessary. The manager’s responsibility is to check in, analyze progress and articulate feedback in an adequate way. Communication has to be frequent to be sure all projects are finished at the right time.
Contrary to popular belief, outsourcing is not always the cheapest option available. Think about all the resources and efforts you put into outsourced team management. If costs are higher than hiring in-house staff, outsourcing is definitely not something for you. That is especially when looking at tasks that require absolute detail attention, managing accounts and tasks that have to be done in-house. When costs are higher to outsource, it should not be done.
Thinking Outsourcing Team Is Fully Prepared
Many entrepreneurs believe that outsourced teams will always be equipped with absolutely all the knowledge and skills needed to get the job done right. That is rarely the case since even the most skilled of the workers you find might still need some training that is specific to the project needs you want covered. Training is always going to be necessary and you need to factor that into your decision.
Underestimating Communication Speed
In many cases it is hard to properly communicate with in-house teams so it is normal for this to be even more difficult with outsourced workers. Entrepreneurs tend to underestimate this so they end up having development problems because communication does not happen fast enough. The interaction between team members should be as fast as possible for basically all projects. In outsourcing it is common for communication to happen through email, Skype and so on. This is definitely not enough for time sensitive projects.
Thinking Security Is Given
Overseas companies offer great work but you are at security risks you might not consider. Data loss can always appear and various other security threats have to be considered. A company has a much higher possibility to be faced with security hacks, by around 30%, when outsourcing overseas.