Should Your Tech Startup Consider Outsourcing?
April 25, 2023|
Technology startups have quickly emerged into a global phenomenon. If you belong to this space, you already know it’s a competitive jungle to be in. The intriguing question of whether tech startups should make use of outsourcing frequently comes up. There are those quick to dismiss the idea. Then you have entrepreneurs on the other side of the fence who view that working with a reliable outsourcing provider is one of the key solutions to play the long game and grow faster.
As a business existing in such a fast-paced environment, you’re compelled to explore strategies to help transform your startup vision into a reality. A plethora of those strategies include farming out some of your business processes. By relieving your company with some of its non-core activities, you can set your sights on big goals like knocking the competition out, gaining more traction, disrupting an industry, or even changing the world.
So should your tech startup consider outsourcing?
The answer is a firm yes if you usually find yourself in these sticky situations.
1. Your in-house team is constantly overloaded with too many tasks.
Every startup devotes a huge amount of effort into building a dream team. Once set up, they wear different hats and perform a dynamic set of responsibilities. You’ve probably experienced that the role your employees play in the organization gets blurred out as they get overloaded and sidetracked with too much work. Let’s face it, startups mostly have teams juggling a lot and this situation is simply counterproductive for any company.
Having the right people working within their expertise and with focus lets them perform to their full potential. There will always be parts of your startup that only you can do, while others are best handled by external specialists like an outsourcing provider. If a time-consuming business process can be duplicated, it’s a great idea for you to outsource it. With the right partner, an outsourcing provider can accomplish other tasks more effectively because it’s their focal point and don’t have a multitude of other things to worry about.
2. You struggle with other parts of the business where you’re not an expert.
Nobody is an expert at everything. It’s essential to identify what you do best, where your strength lies, and concentrate on your core competency when running your tech startup. Got that killer idea? — You want to pour all your energy into making it the most amazing thing ever.
For example, a startup who is an expert in developing a software or app is better off spending all their time, effort, and energy to making it one of the best products out there in the market. The rest of their business intricacies such as customer support, accounting, and back-office tasks like administration, content moderation, quality assurance, etc. requires proficiency and expertise on its own. This is where the concept of outsourcing comes into play — it’s a strategic move where they pass on the torch to specialized companies that excel in those precise domains. You can check out our compiled list of typical business tasks that are perfect for outsourcing.
3. You experience difficulties in hiring top talent due to the increasingly competitive job market.
Vying for high-quality talent has never been harder. In a world where the “great resignation” and “quiet quitting” are the new trends in the job market, so many companies including startups, find themselves in an unprecedented position where workers are leaving faster than they can replace them. McKinsey & Company’s article emphasized that this shift compels organizations to be more fancy and creative with their compensation and benefits in order to attract the best and the brightest.
Apart from strengthening your recruitment strategies and employee retention programs, an additional solution is to consider outsourcing. The pandemic has taught us that remote work can effectively accomplish most tasks. The notion that tasks can only be done face-to-face is outdated, making outsourcing a more feasible and attractive option now. So you don’t need to limit your company to local talent only. When hiring skilled individuals, you can start casting a wider net on a global scale.
4. You need to better manage your operating costs in order to scale and grow.
Whether your tech startup is well-funded by investors or bootstrapped, you may have experienced that operating expenses gets more expensive as you scale and grow. Things like higher rent, pricier materials, and salary increases, can easily gnaw away at your bottom line. Top that with a soaring inflation and your profits might not keep up with the price hike. As an entrepreneur, you need to find practical and efficient ways to optimize your financial resources. If you use an outsourcing provider, you have the ability to dramatically cut down your operating costs and eliminate capital expenditures. You can hire cost-effective specialists to do the heavy lifting and give you a financial leg up to fuel your growth initiatives.
As with anything, using outsourcing services is not the perfect solution to every technology startup out there. But it remains to be one of the best strategies to grow a company. Ultimately, it greatly depends on when, who, and how you use outsourcing for your business. To find out more if your startup is suitable for outsourcing, check out this blog post.