3 Popular Functions Small Businesses Outsource in Order to Scale Efficiently

small business outsourcing

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It’s rarely possible for a small business to do everything on its own. While there’s something to be said for independence, the truth is that the most successful businesses are those that work with others. That is perhaps why small business outsourcing has not only become appealing to so many businesses, but also why it’s quickly become the norm for those who want to grow beyond the small business label.

Small business outsourcing

Outsourcing isn’t just for large businesses. In fact, it’s often smaller businesses that get the most out of these types of arrangements. Whether you’re looking to have an outside company handle your payroll or you need expert help in the hiring process,small business outsourcing often makes the most financial and operational sense.

Top reasons small businesses should outsource

There are a number of very good reasons why small businesses consider outsourcing payroll and other key operating functions. These range from the shockingly mundane to the not-so-obvious, but they all play a huge role in helping businesses decide to move some aspects of their operations to out-of-house partners. What’s important to note is that while every business is different, the reasons why so many choose to outsource resonate no matter what the industry or the size of the business in question.

small business outsourcing

Cost savings

The most common reasons why businesses outsource comes down to cost. Simply put, some tasks can be done for a far lower price if they are done by a partner rather than being done in-house. The reasons may vary from those relating to the economy of scale to those related to foreign labor prices, but the truth of the matter often comes down to dollars and cents. If it’s possible for your business to save money and still maintain at least its current level of functionality, outsourcing may simply make more sense.

Focus on core functions

It’s not just the money in the ledger that often counts when it comes to outsourcing, but rather where that money can be put to work. When you choose to outsource, you’re freeing up money to be used in your business’ core functions. Instead of focusing on those areas that are important to your business’ survival, you can refocus your capital to those areas that will help it to thrive. Having the money available to hire new employees or to invest in better technology will ultimately allow your business to do more than it could if that money was spent in an area that could easily be outsourced to a partner.

To hire experts

It always pays to have the best possible people working for your company. In some cases, though, it doesn’t make sense to pull out all the stops to have these people on your payroll. Instead, you can work with another company to ensure that you’re getting access to experts that will help to support your company in important ways. Having a strong working relationship with experts allows you to get more for every dollar spent, all without worrying about how you’ll keep them on your payroll.

3 functions small businesses typically outsource

Small businesses typically outsource a number of different functions. There are a few, though, that tend to be outsourced more often than others. Below are three of the most commonly outsourced services as used by smaller businesses.

small business outsourcing

Payroll services

Payroll is one of the most commonly-outsourced areas for small businesses, and for good reason – correctly handling your payroll functions is not only an absolute necessity for your business, but it’s far more complicated than you might think. Outsourcing your payroll is the perfect marriage between saving money and getting access to experts, making it one of the prime examples of how your business can benefit from outsourcing.

“In 2014 alone, the IRS levied more than $2 billion in fines against small businesses as a result of mistakes, omissions and improper filings.”


Human resources

One of the hottest trends in the business world is co-employment. Under this scheme, businesses partner with another organization in order to outsource hr services and to maximize the benefits such a relationship can bring to their employees. Not only can such an outsourcing scheme allow a business to leave the complicated realities of human resources management to experts, but it can give their employees access to better benefits management and even better prices when it comes to healthcare.

“A PEO (Professional Employee Organization) can help process your payroll and offer your employees better benefits. In addition, by pooling with other companies through a PEO, you can get significant discounts on the cost of benefits.”


Accounting and tax services

Accounting has long been one of those services that businesses have outsourced. After all, smaller companies almost certainly cannot justify the expense of having a full-time CFO, yet they still need professional accounting services to keep their books balanced and to stay in compliance with various state and federal tax laws. Rather than keeping someone on the payroll who may only need to work a few hours a week, outsourcing this process gives a company access to excellent professional help at a fraction of the price they’d have to pay when doing this kind of work in-house.

small business outsourcing

Why your business should outsource

Outsourcing certain functions of your business can allow you to concentrate on what makes your business truly shine. Whether you choose to do so for purely financial reasons or because you want a chance to get the expert help you need for success, small business outsourcing may be the next step you need to take in order for your business to grow. When you’re ready to start thinking about outsourcing certain functions, make sure to visit visit PayTech to look at the company’s packages and pricing.


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