Startups and the Benefits of Outsourcing in 2021

Running a startup is a lot of work, especially in the opening stages. In most cases, you’re expected to cover operational costs from your savings or ask your friends and family for help. If, by any chance, you’re lucky enough to procure funds from investors, your life can become even more difficult as the pressure to perform mounts.

All of this means that most startups have to save money while attempting to grow and achieve more. This may sound impossible, but there are ways to make it happen, and outsourcing is one of them.

Depending on what you’re trying to create, outsourcing can be much more cost-effective and produce better results than trying to hire and manage an in-house team.

More Than Just a Money-Saver

Spending a lot of money in the initial stages of your startup can lead to lots of problems down the line and cause your dream business to dissolve before it even gets a chance to compete. However, outsourcing is not only about saving money. There is much to be gained from outsourcing certain aspects of your business to someone with more expertise in a particular field.

For example, we all know that in 2021, every business needs a well-designed, functional, and responsive website. Instead of hiring a team of professionals to create and manage your site, you can outsource this area of your business to a highly professional web design and development company.

This will enable you to focus your efforts on what you really care about while ensuring that you have a competently made website and a robust online presence. This is only one of the many benefits of outsourcing, and this post will attempt to cover everything you need to know about the practice. Let’s begin!

What Is Outsourcing and Why Should You Do It?

In the simplest of terms, outsourcing is trusting the completion of a project to someone who isn’t employed with you full-time. For startups, this is a reliable way to scale up operations and have a strong entrance into the market.

According to Deloitte’s Global Outsourcing Survey for 2020, the main objectives of outsourcing include:

• Cost reduction
• Flexibility
• Speed to market
• Access to tools and processes
• Agility

In other words, outsourcing is a business practice allowing companies to go through a digital transformation more effectively, thereby increasing their value proposition.

Benefits of Outsourcing for Startups

As we mentioned above, outsourcing allows you to focus on your core competencies while letting someone else handle the technical part of your development. Here are a few things that you can gain from having a separate team take care of different aspects of your business.

1. Lower Operating Costs

We already mentioned outsourcing’s ability to lower a startup company’s operating costs. Still, it is worth talking about in more detail as it is one of the most attractive aspects of this business strategy. 

Outsourcing offers huge cost-savings potential because it allows startups to skip investing in a ton of additional equipment, recruitment costs, including benefits, salaries, and training, not to mention the extra office space.

All of these significant investments are taken care of by simply outsourcing a project to another company, leaving you with a lot more capital to invest into other vital parts of your business plan.

2. Scalability

Outsourcing essentially allows startups to “pay as they go,” which means they don’t have to hire staff that they may not need a few months down the line. This frees up funds for development instead of hiring full-time employees in the early stages.

Having a core team from the very beginning can be beneficial for lots of reasons. Still, it can be a significant financial investment that may prove too challenging to recover from later down the line, especially if you’re faced with unexpected setbacks (and you will be).

Collaborating with teams of experienced professionals on a per-need basis gives startups much more flexibility over the long term, lessening labor costs and allowing for faster growth.

3. More Focus on Core Responsibilities

As we said, startups usually begin with a limited number of employees, each with his/her own specific set of tasks and responsibilities. However, as the business grows, so does the list of functions each employee is expected to perform. This is because startups are hesitant to hire new people in the early stages, even though the business is growing, simply because they have an obligation to cut costs.

This creates an unpleasant situation in which existing employees who have been with the company through thick and thin are forced to take on more responsibilities, affecting their work performance and their sentiment towards the company.

Outsourcing takes care of this problem as non-core tasks can be easily delegated to third-party teams, while employees can focus on the work they do best.

4. Leveling the Playing Field

A lack of experience can be one of the main setbacks for enthusiastic startups, and outsourcing can give them a massive boost in this regard. Essentially, outsourcing gives startups the same access to expertise and technology enjoyed by the largest companies in their industry.

Instead of taking years to painstakingly develop an in-house digital marketing team, a startup may outsource the creation and maintenance of its digital marketing strategy to a professional branding and marketing agency.

This enables even the smallest startups to develop high-quality marketing plans and achieve great results on par with the most established brands.

5. Improving Efficiency

With outsourcing, you can move much faster from the decision-making and planning phase to the operating phase, as outsourcing providers typically have everything set up and ready to go. The long and drawn-out process of hiring the right people, buying equipment, and figuring out the most efficient way to go about a process has already been completed by the agency or company you’re outsourcing to.

Outsourcing is a strategy that startups should definitely consider in 2021 because of its many potential benefits and how easy it has become to implement in the digital age. Many successful startups have outsourced big chunks of their business in the early days, taking advantage of all the benefits we outlined above.