A common denominator of new and successful entrepreneurs is the way they handle operations that are not related to their business, but which have a direct impact on it. While spending the most of their time in generate and implement innovative ideas, it is common to see how they avoid functions that are time consuming and are not part of the main line of business.
According to the French economist Jean-Baptiste Say, entrepreneurs are those people who unite all the means involved in an activity, and search for the profit or utility of the remnant. It is because of the above that the figure of outsourcing is extremely applicable in their business because it provides an essential part of their being, to get the most out of your opportunities.
The nature, time and activity that the entrepreneur is getting into outsourcing depends on many factors, that must be evaluated during the operation of the processes, nevertheless, it is recommendable the use of this type of contracting during the beginning since mostly of companies do not count with resources to have a full-time staff, no adequate facilities, or no enough task to add value by hiring a person.
As the business grows or the activity requires, it is possible for the entrepreneur to involve a person to work in their facilities full time. Entrepreneurs should valuate opportunities and benefits, since outsourcing on site has become a new option for entrepreneurs, who due to certain job specifications, require contract people to be in the their facilities, but under the figure of outsourcing.
Below, we give you 4 factors that that every entrepreneur should evaluate when deciding between outsourcing on site vrs in-house.
Nature of the activity
When the activity is not strategic and contains routine transactions, it is a clear example of an activity that can be done through outsourcing on site. Although for many experts, almost all activity can be carried out through outsourcing, the truth is that, in fact, the measurement of risk plays a fundamental role in deciding for an outsourcing strategy.
One of the main advantages of outsourcing is the specialization of resources; however, it is important that the client requests a continuous training plan or employee rotation plan to mitigate the impact of having the resource always in their facilities.
Costs, costs, costs
All business goal is profitability, taking into consideration that an outsourcing activity must generate also a profitability for a third party, every entrepreneur could evaluate and expect that general costs of the services are expected to be lower when subcontracted. It is important to evaluate additional options that the full-time outsourcing company offers to its clients, such as recognition of legal obligations, employee training activities, among others. One of the savings that are not perceived in this type of outsourcing on site are equipment and physical facilities, if these functions are performed in the contractor’s workplace (this cost will always be charged in the monthly bill, but may vary according to the use of economy of scale from the service provider).
If an entrepreneur decides to perform an activity through outsourcing on site, it is very likely to also delegate the supervision of the assigned resource. It is important that during the functions specification set up, the contract specifies the responsibilities, and ensure that the activity carried out will have adequate supervision, otherwise it would not be generating any added value.