One of a startup’s most valuable assets is its size and manoeuvrability. Unlike a mega-corp, which has to endure layers upon layers of bureaucracy to enact any new policy or procedure, a startup is agile, making swift decisions, trying new tactics and carving out a niche within the market.
Unfortunately, many startup entrepreneurs interfere with their venture’s speed dexterity by loading themselves down with too many in-house departments. In truth, a business doesn’t need many employees to be viable because it can outsource many critical services at a lower cost. Here are five important services that most startups should continue to outsource to maintain their agility as they fight for a place in the market.
It doesn’t matter what product or service a startup peddles; its most important capital is always its people. Even the smallest startup needs a handful of employees to function effectively and maintaining the safety, productivity and happiness of those people is imperative. While human resources often isn’t a startup’s first priority, it should be among the first internal services set in stone — but that doesn’t mean HR needs to be managed in house.
HR does more than mediate inter-office conflicts. HR is responsible for a huge number of critical services, to include recruitment, training, payroll and benefits administration, compliance, corporate culture development and all sorts of administrative tasks for the office. Startups with only a few employees still require several HR staff to manage the day-to-day operations, which is why outsourcing HR is the only viable option.
Startups are swift and nimble because they aren’t bogged down with employees devoted to the slow and arduous tasks of running a business — specifically, they don’t have an accounting team. Accounting is undeniably important; without it, a business is all but doomed to make major financial mistakes that result in incredible debt and ultimate failure. As a business grows, it can be valuable to bring on accounting professionals to gain immediate access and expertise, yet while a startup remains small, outsourcing accounting is the best way to gain accurate and immediate financial services while dedicating more internal time and effort to the moves that will bring the business success.
Traditional marketing isn’t dead, but it certainly doesn’t work as well as it used to — especially in non-traditional industries. Businesses cannot survive in 2020 and beyond by ignoring the internet; a study from 2018 found that roughly 88 percent of consumers perform online research before making most purchases, and that percentage has likely increased in the two years since. Without a doubt, effective digital marketing makes the difference between a startup that succeeds and one that fails.
Yet, like HR, digital marketing is not simple and straightforward. There are dozens of digital marketing strategies, and developing and deploying a cohesive and effective campaign requires time and expertise — both of which startups usually lack. Startups should outsource their digital marketing, and ideally, they should do so with an agency that operates in a similar market. For example, a startup with a customer base in the Southwest should consider hiring an SEO agency in Phoenix as opposed to one based in Timbuktu.
Like digital marketing, data is a relatively new resource that modern businesses simply cannot live without. Big Data should guide every business decision, from the brand’s colours to which services the business offers. Unfortunately, though data is easy to collect, it is exceedingly difficult to organize and analyze, meaning startups and small businesses can drown in data if they aren’t careful. Startups need data processing services, but it can be expensive and unwieldy to maintain a full-fledged data department. Instead, startups should search out the best third-party data firm within their budget.
Next to human resources, customer service could be the most important department within an organization. Keeping customers happy is crucial to building and maintaining a loyal base, but doing so can require extensive time and resources. Initially, startups would do well to conserve their time and resources for big-picture efforts, outsourcing customer service to a trustworthy third party.
However, as the business grows, customer service should be among the first departments to bring into the fold. Customer service can define a business, so it is beneficial to have complete control over how customer service operations run. Though a customer service agency can be useful while agility matters, it won’t always be worthwhile to keep customer service at arm’s length.
Outsourcing isn’t always a bad word. In fact, outsourcing is an essential business practice, especially for startups that need to be able to move quickly and pivot even quicker. While building a business strategy, startup entrepreneurs need to consider which services they are willing to keep in house — and which would be better managed by an experienced third-party team.