The current pandemic has left many businesses vulnerable. Many entrepreneurs are thinking about closing their major ventures and settling for a small-scale business that can only raise a few coins for survival. However, this could be the worst decision because nobody knows when the epidemic will end. Life has to continue, and businesses have to thrive. Instead of thinking about closing down the sources of income, the best thing is to figure out how to make more money and save for future uncertainties. Therefore, if you are thinking about saving more money from your business, you should try outsourcing it.
So, what is outsourcing? How can it save you money? How can you survive outsourcing amidst this raging pandemic? Read on to find out.
What Is Business Outsourcing?
Any business plans for its survival in any economic trend. Whether it’s during the pandemic, market crisis, or a drop in consumer volume, as a determined entrepreneur, that is the time you have to sit down and analyze every porthole to find your way out.
Even if your business is not on the verge of falling, let us look at it this way. Do you think you are a small business superhero? Do you think you can do everything yourself without third-party assistance? There are a lot of duties you cando as a business owner. Apart from the work you do best, you will have to tackle accounting, control the supply chain, reply to every mail that pops on your PC, redesign the business, and a lot more. Therefore, if you are working towards your early grave,keep moving. But if you think about having a successful business with some time to rest and money to save, consider outsourcing.
Outsourcing is the process of delegating business functions and duties to a qualified third-party service provider. It is also an act of hiring a Virtual Assistant to handle other administrative duties like email filtering, calendar management, phone answering, and appointment management. Outsourcing is not only a small-scale business strategy; large-scale firms can also undertake it to save more money time. For example, US companies from Silicon Valley outsourced software development and tech support in the 1990s to Indian companies.
Although outsourcing was not initially recognized as a competitive business plan, many companies are lately adopting the technique to save tons of money. Therefore, if saving money is what you need, you can outsource your business duties to a competitive third-party.
How to Survive Outsourcing and Save Money
These harsh times have pushed you to search for savings in every corner of your business. You may be seeking specific business skills or fishing out non-performing employees to focus on the profit side. You may also be strategizing business initiatives and looking for an open door from anemerging economic crisis. The good news is that, whether you have not yet signed your outsourcing contract or you signed your current contract six months ago, there are plenty of ways to cut your business cost and make more profits. Here are some of theways to survive your current outsourcing contract and save tons of cash.
Ask Your Service Provider to Identify Cost-Cutting Opportunities
After outsourcing your business, you are likely to face a situation where some third-party employees are more familiar with your business environment and processes than your employees. This is when you can ask your service provider to identify the best ideas for the process and productivity improvements. You can ask them to prioritize the opportunities to cut production costs and increase savings in the current fiscal year. Remember, the best outsourcing contract contains provisions that demand service providers work with customers to attain cost reduction. Suppose your current contract does not have such provisions. In that case, you can negotiate with your service provider on incentives such as a formal agreement offering employees with the best ideas, a credit for the outsourcer on the next invoice, or profit-sharing that rewards your provider with a portion of savings realized. Examine your business portfolio to see if the cost-reduction might be achieved by transferring more functions to your outsourcing vendor. Alternatively, you can talk with your vendor to see if you can extend the deal beyond its current expiration date. Increasing the outsourced functions’ scope saves you more time you could take tackling your internal duties and focus on other areas. On the other hand, extending the agreement’s terms relieves you the stress of searching for other vendors or negotiating another deal.
Consider Extending the Terms of The Contract or Increasing the Scope
When you notice that your service provider is doing an excellent job, you may want to work with them longer and maximize your savings. Start by reexamining your business portfolio to see if the cost reduction might be achieved by transferring more functions to your outsourcing vendor. Alternatively, you can talk with your vendor to see if you can extend the deal beyond its current expiration date. Increasing the outsourced functions’ scope saves you more time you could take tackling your internal duties and focus on other areas.
On the other hand, extending the agreement’s terms relieves you the stress of searching for other vendors or negotiating another deal. Therefore, the strategy gives you the leverage to ask the service provider for cost savings and saves you more money by renegotiating a longer deal.
Review Service Providers’ Performance
Your vendors are also in the same economy as you, and they are also facing hard times. Many providers will respond to the situation by underperforming, reducing headcount,or dodging other contractual duties. Remember, they are also trying to save money, which means they can do anything to cut their costs.The best way to survive this problem is by verifying every provider’s contract and performance.
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