Small Business: 2 things to remember when outsourcing

Knowing what is worth outsourcing is key to

Knowing what is worth outsourcing is key to successfully outsourcing work from a small business. (Credit: iStock)

Jamie Herzlich

Newsday columnist Jamie Herzlich Jamie Herzlich

Herzlich writes the Small Business column in Newsday.

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Owners of small businesses can't do everything themselves, though many try.

Oftentimes they lack the resources to hire additional staff to help tackle necessary tasks. For many of these entrepreneurs, outsourcing may help to fill in the gaps.

Experts advise, however, assessing a business' core strengths and weaknesses before beginning.

"To be successful in outsourcing, you have to have an understanding of where you need help and be willing to get the help you need in those areas," says Alyssa Gregory of Stewartsville, N.J., founder of SmallBusinessBonfire.com, an online resource for small-business owners.

Time tracking

To get started, she suggests taking at least two weeks to track how much time is spent on tasks and determine which ones could be delegated.

Gregory says she outsources numerous tasks, including bookkeeping and accounting.

The best tasks to outsource are ones you can actually document, don't require your expertise, and are easy to hand off, such as billing, she says.

You "have to do some company soul searching" to determine these, says Frank Casale, founder of The Outsourcing Institute, a Locust Valley-based global network and educational resource for outsourcing.

Critical core functions aren't the best ones to outsource, says Gene Marks, author of "The Complete Idiot's Guide to Successful Outsourcing" (Alpha; $19.95) and owner of The Marks Group, a Pennsylvania-based technology consulting firm. "You can't outsource a sales associate in your store or your warehouse manager," says Marks, who outsources about half a dozen functions at his own Pennsylvania-based 10-person company.

To make an outsourcing relationship work, he suggests having an independent contractor's agreement that meets IRS guidelines (see irs.gov). It's best to lay out the terms of the agreement, expectations, etc. ahead of time.

Interview at least five contractors or outsource providers to find one that's a fit with your business and will make it better, advises Casale.

"You want to find an outsource service provider that specializes in small companies," specifically one where at least 30 percent of their roster is small clients, he says.

Documentation

Before handing off the work, start documenting your processes and procedures to outline how you'd like the outsourced work to be done, Gregory says. This will establish guidelines in case you bring on another contractor, she says.

As the work progresses, communicate and set milestones.

"The value of communication is to make sure we're all on the same page," says Rah-sheen Slaughter, owner of The Metaburn Fitness Studio, a personal training and nutrition coaching firm in Locust Valley.

He outsources multiple tasks, including payroll, administrative and graphic design, to supplement four full-time employees.

He communicates weekly and project to project with his contractors.

Having that extra help without having to pay the full costs of hiring more permanent staff, particularly in this down economy, frees up his time to focus on his core business.

"My time is better spent coaching and actually working with clients," Slaughter says.

Just be willing to give up some control.

"You've got to let go and let them do what you're paying them to do," says Marks.