A lot of startup companies are sprouting left and right, but most of them do not survive. Some built a product people didn't want, some may have an uncertain business objective, while others may have jumped the gun too soon. But, one of the top reasons that small businesses fail is poor management stemming from lack of expertise in the different areas important to running a business.
In a typical startup setup, pioneer team members try to do everything at the same time due to limited budget and resources. However, even the most promising startups or SMEs can't do everything on their own, and it's often a recipe for disaster when they try.
Startups fail to expand or even survive in a highly competitive business environment because of lack of funding, expertise, and other resource constraints. Business outsourcing can help them do more with the limited resources they have and focus on improving their business by outsourcing non-core activities.
Why Startups Should Outsource
Most startups are composed of a small team with only key employees, and for some, just the proprietors and founders. Because they're just starting out and are being cautious about costs and expenses, they avoid hiring new people and try to do everything by themselves. As a result, the workload becomes unmanageable. With this, lead times are prolonged, and quality of work starts to suffer. The probability of errors is high because they're trying to complete business functions that are outside their expertise.
When processes start to become strained, or deliverables start getting delayed, you know it's time to outsource. Otherwise, the quality of your products and services will continue to decline. As a result, you may lose clients and customers. Worse, it will contribute to the destruction of your brand reputation.
Additionally, startups have a limited amount of cash at their disposal. Avoiding big capital expenses and lowering operational costs can help them stretch their startup capital and give the business more time to establish a footprint and grow.
Common Costs When Starting a Business
A substantial amount of money is needed to fund your initial business operations. Whether you're selling physical goods, technology, or even downloadable software, your startup needs to allot money for office space, employees, and IT infrastructure.
You also have to consider the hardware and technology needed to create your product and keep the daily business operations running smoothly. You also need to spend on overhead and administrative costs, as well as professional fees and employee benefits.
If you plan to do everything in-house, you also need to allot budget for your hiring and recruitment costs, as well as the time it takes to fill an empty seat.
Benefits of Outsourcing for Startups
Startup companies and SMEs who invest in business outsourcing can reap advantages that help their businesses expand. Most businesses are now warming up to the idea of outsourcing administrative and creative processes. In fact, a Deloitte survey revealed that 66% of companies outsource certain business processes to other companies.
When you try to ask employees to perform tasks outside their skill set, you will inevitably compromise quality. On the other hand, you'll get field experts and professionals for a specific task when you outsource.
Ultimately, outsourcing business processes will save you from a lot of costs and will let the key members of your team focus on growing the business, as opposed to feverishly jumping from one role to another.
Areas to Outsource
Business functions and operations can differ, but most companies have similar processes that easily be outsourced.
Things to Remember
Before you start looking around for outsourcing companies, make sure you know exactly what business process or function you want to outsource. Outline the processes in your company to determine what the most important ones are, and the tasks that need to be completed by your small team specifically.
Once you've decided to outsource, make sure to choose an outsourcing company that can help your business grow instead of those that offer offshoring and outsourcing services that make it hard for you to take over eventually.
Get the best outsourcing services from an outsourcing company that knows how to help startup businesses and SMEs. MicroSourcing has helped startups from all over the world get their business off the ground and grow at a rapid rate.
by: Sidney Liquigan
Tuesday, February 13, 2018 | Comments (0)
Category: Outsourcing Research / Trends
Business process outsourcing (BPO) in the Philippines is a booming industry, with many foreign businesses choosing the country to outsource their back office services, data transcription, creative services, IT and software development, and most of all contact centers. In the past year, the Philippines became the top call center country, overtaking India. The call center sector is forecasted to continue its strong growth rate until 2020.
Among its other Asian competitors including India, Malaysia, and China, why do international businesses choose to outsource to a Philippine contact center? Here are some of the top reasons:
Many years ago, the Philippines used to be under a different foreign rule, namely Spanish, Japanese, and American, until its independence in 1898. With the country's strong affinity with Western culture, it has become an inherent trait to the Filipinos to be easily adaptable to different customs and cultures.
Philippine contact centers hire agents who are good in spoken and written English, a skill not hard to find among the pool of talents in the country. In fact, one of the reasons the Philippines has overtaken India as the top BPO destination is because of the Filipinos' accent neutrality. Contact centers rely on communication to provide efficient customer support. And being able to speak and communicate clearly in English, the universal language, is among the top requirements when businesses choose where to outsource contact centers.
Businesses can reduce expenses and save more money by outsourcing to the Philippines, where labor costs are lower but the quality of service is paramount. In the Philippines, jobs in the BPO industry provide higher wages than other local positions. This means more employees will most likely be more attracted to a BPO position, resulting in a continuous supply of manpower. And this encourages global businesses to outsource more business processes to the country.
More locations outside the capital
Outsourcing opportunities in the Philippines are not only in Manila. There are also BPO centers in Cebu, Davao, Clark, and Baguio, among others. Foreign investors typically want to set up their call centers in Manila, but there are also a lot of talent in other cities, and doing business outside the capital is also much less cheaper.
Support from the government
The Philippine government encourages foreign investors to support the BPO industry in the country through enticing benefits such as tax holidays and tax exemptions. The rules and regulations that apply to BPO companies in the country also promote the growth of the BPO industry.
Intensive training and education
Aside from the Filipinos being naturally adaptable and highly influenced by Western culture, contact center employees also receive intensive training to further improve their English accent neutrality as well as their customer service and communication skills. There are now also studies and university training programs dedicated to this specific field.
Hospitality and positive outlook
Filipinos are known worldwide as hospitable and optimists, two important characteristics that anyone working in the customer service industry should have. The positive attitude not only reflects on how they deal with customers but also shows in their outstanding work ethics – how they value their jobs and how they are proactive in improving their skills.
Businesses of all sizes, from startups to established enterprises, find outsourcing HR and recruitment as a valuable business tool. Outsourcing in general is a common business strategy to take advantage of specialized expertise at competitive costs.
Outsourcing HR and recruitment processes helps businesses catch up with the complex and ever-changing employment regulations, especially if managing and recruiting employees offshore. For instance, if you are hiring outsourced employees from the Philippines, it only makes sense to outsource a Filipino HR and recruitment professional to handle your business's offshore employment processes more efficiently.
To further guide you in effectively outsourcing your HR and recruitment processes, read these 4 tips.
Beyond job posting, screening CVs, and interviewing candidates, HR and recruitment outsourcing improves companies' hiring and employee management processes through intensive evaluation of each candidate and through employee engagement programs that aim to improve the employee's motivation and productivity.