Startups: 5 Things You Should Never Outsource, And A Few You Should

Startups: 5 Things You Should Never Outsource, And A Few You Should


Whether well funded or on a shoestring budget, financial accountability is the name of the game for all startups, regardless of industry.  In streamlining operations, there are some functions that should remain in house, and a few that are best left to experts outside the company – in other words, roles and responsibilities that make good business sense to outsource.  Some may be logical, or even obvious, and some may be things seldom considered when outsourcing comes to mind.

Let’s start with intrinsic company roles that should always remain internal:

  1. Executive leadership.  Why leadership with no “skin in the game” is not smart: this may seem like a no-brainer, but some startups may bring on serial entrepreneurs or even venture capitalists that do not possess the same vision for the company as the founders.  Executive leadership for startups should be lean and uncomplicated.  The more cooks in the kitchen can mean a muddled future for a once bright operation.
  1. Marketing and Sales.  Having one dedicated marketing director to manage campaigns in key to early promotion and success, and sales execs keep your pipeline full.  Quite simply, marketing and sales are the lifeblood of your company’s profits.  Innovative and bright marketers are worth their weight in gold, and the same can be said for skilled salespeople.  Develop robust bonus and commission programs that attract the best talent and will make pay more performance based than a set salary.
  1. Social media manager.  Relying on outside resources for social can get very expensive and user engagement needs to be managed in real time.  In today’s digital era, a good social media manager can be found right in your own backyard – in a graduation cap and gown.  Today’s college grads have grown up with social media and know its inner workings, unwritten rules, and how to engage fans and build a following.  A good social media manager is an invaluable arm of your marketing team.
  1. Customer/client services.  Startups need a real voice for their brand, and highly trained client service reps are the front lines.  Your company’s first impression to customers and clients should always be stakeholders in your vision – not call center reps located off shore.  Outsourced service reps have their place, but entrepreneurs have more risk in the beginning and can’t afford to make their debut in client services a flop.
  1.  Termination management.  Firing employees is a reality for every business, including startups.  To keep things discreet, you’ll want to make sure such moves are handled by insiders “in the know”.  Confidentiality is of the utmost importance in these delicate matters, and you want someone who is a part of the team to handle the situation gingerly, but firmly, and with the company’s best interests in mind.

Crucial elements startups should outsource

  1. Legal  counsel.  To hire a top-notch corporate attorney, a startup would have to cough up a healthy 6-figure salary, a financial stake in the company, and a bevy of benefits.  Many legal functions can be accomplished online with pre-drafted forms.  This leaves money on the table for strategically sound legal advice when it’s needed, and not on retainer.
  1. Human resources.  Compliance is the name of the game in HR, and not knowing HR law inside and out (and most entrepreneurs don’t) could spell trouble.  Cover your bases with third party HR management and guidance.  Many HR functions can be automated as well.  Make sure the firm you hire have experts on staff that know the pitfalls of hiring, firing, discipline, and benefits administration.
  1. Public relations.  The need for good PR is vital, but staffing someone full time is neither practical nor fiscally responsible.  Hire a firm for on demand PR, only if or when it’s needed, as in managing a sticky service problem that’s gone public.  If you have a team member who is also a good writer, press releases can be produced in house.  Social media can function as “virtual PR” and executive leadership can speak on behalf of the company to the media.
  1. Information Technology.  Let’s face it:  developers and network administrators don’t come cheap.  Many of these functions don’t require full time staff, especially among developers.  Many of these talented professionals prefer to freelance for a few different outfits than be tied to one.  In addition, startups can choose cloud-based network options, eliminating the need for dedicated IT staff.  Enterprise applications are also more affordable for a flat monthly storage and management fee.
  1. Accounting.  You want your company numbers nearby, but not necessarily in-house.  An experienced accountant, like legal counsel, will command a hefty salary and benefit package.  A key player in your company’s financial wellbeing, a good, outsourced accountant keeps the company visionaries for a startup honest and realistic, and prevent mistakes before they happen.

In conclusion, each startup is unique and will have different attitudes and preferences as to what to keep in-house and what to outsource.  The key is to think realistically and also creatively to determine which scenario is right for your company, and to commit to synching both internal and external processes for the best outcome possible.

About the Author: Dylan Mazeika is an online writer with a background in marketing and small business. He enjoys writing articles and guest posts on the latest business and design trends, and helping small business owners with logo maker.

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