096 - In-House Vs Outsourced
In-House vs. Outsourced: A Comprehensive Guide to Choosing the Best Approach for Your Business
“Get your capacity and your sales up with outsourcing.”
When it comes to running a business, one question that often arises is whether to handle tasks in-house or to outsource them to external companies. Both approaches have their own advantages and disadvantages, and the best choice for your business will depend on your specific needs and circumstances. In this article, we will explore the pros and cons of in-house and outsourced approaches, as well as some key factors to consider when deciding which is right for you.
There are two main types of outsourcing: offshore and nearshore. Offshore outsourcing involves working with a company located in a different country, often in a location with lower labor costs. Nearshore outsourcing, on the other hand, involves working with a company in a nearby country, which can offer similar cost benefits while also allowing for better communication and collaboration.
One key factor to consider when deciding whether to outsource is the complexity of the task at hand. If a task requires specialized knowledge or skills that your in-house team lacks, outsourcing may be the best choice. For example, if you are launching a new product and need help with product design, you may want to consider outsourcing to a product design firm. Similarly, if you are struggling to keep up with customer service demands, you may want to consider outsourcing to a customer service provider.
“One of the main advantages of outsourcing is that you don’t have to hire people. A disadvantage is that you won’t have control like you would with an in-house employee.”
On the other hand, if you have a team of skilled professionals who are able to handle a task efficiently and effectively, it may make more sense to keep it in-house. This can be especially true if the task is closely tied to your company's core competencies or if it requires frequent collaboration with other team members.
Another factor to consider is cost. Outsourcing can often be more cost-effective than handling a task in-house, especially if the task requires specialized knowledge or equipment. However, it's important to carefully evaluate the long-term costs of outsourcing, including any potential hidden costs such as training and onboarding expenses for outsourced staff.
One potential disadvantage of outsourcing is a lack of control over the quality of work. When you outsource a task, you are relying on the expertise and professionalism of the external company. If the company does not meet your expectations, it can be difficult to hold them accountable or to make changes to the way the work is being done.
In-house approaches have their own advantages and disadvantages as well. One key advantage is the ability to have direct control over all aspects of the task. This can be especially important if the task is closely tied to your company's core competencies or if it requires frequent collaboration with other team members. In-house approaches can also offer greater flexibility and the ability to make changes on the fly.
However, in-house approaches can also be more costly, as you may need to invest in training, equipment, and other resources to handle the task effectively. In addition, if you are stretched thin and struggling to keep up with demand, an in-house approach may not be sustainable in the long run.
Inside outsourcing is a hybrid approach that combines elements of both in-house and outsourced approaches. With inside outsourcing, a company outsources certain tasks to a team of employees who work in-house, but are not directly employed by the company. This can offer the benefits of both in-house and outsourced approaches, including the ability to retain control over the work while also enjoying the cost savings of outsourcing.
When starting a new business, it's important to stay in your lane and focus on what you do best. Outsourcing can be a useful way to free up time and resources so you can focus on your core competencies. However, it's important to carefully evaluate the tasks you are considering outsourcing and to choose a reputable, reliable company to work with.
There are several factors to consider when choosing who to outsource to. One key factor is the company's reputation and track record. It's important to do your research and choose a company with a proven track record of delivering high-quality work on time.
Another factor to consider is the company's location. If you are outsourcing to a company in a different time zone, it's important to ensure that there is sufficient overlap in working hours to allow for effective communication and collaboration.
It's also important to consider the company's pricing and contract terms. Be sure to carefully review the contract and negotiate any terms that you are not comfortable with.
The OSSHA 300 Form is a tool used by companies to assess their readiness for outsourcing. It helps companies evaluate their current resources and capabilities, as well as their future outsourcing needs. By completing the OSSHA 300 Form, you can get a better understanding of which tasks are suitable for outsourcing and which should be kept in-house.
“You’re better served to focus on what you’re good at and to stay in your lane.”
Contracting can be tough, especially if you are new to the process. It's important to have a clear understanding of your needs and to communicate them clearly to the outsourcing company. It's also important to be prepared for potential challenges and setbacks, and to have a plan in place for how to handle them.
When deciding whether to outsource a task, it can be helpful to look at your organization chart and consider what you need to be successful. Do you have the necessary resources and expertise in-house to handle the task effectively? If not, outsourcing may be the best choice.
Outsourcing can also give you an outside perspective and bring fresh ideas and approaches to your business. Working with an external company can expose you to new ways of thinking and can help you to stay up to date with industry best practices.
If you are considering outsourcing, it can be helpful to seek advice and mentorship from experienced professionals who have successfully navigated the outsourcing process. They can provide valuable insights and guidance on how to get started and what to expect along the way.
The StrengthsFinder tool is another useful resource for identifying your unique strengths and capabilities. By understanding your own strengths, you can make more informed decisions about which tasks to outsource and which to handle in-house.
Ultimately, the decision to outsource or handle tasks in-house will depend on your specific needs and circumstances. By carefully evaluating your resources, capabilities, and goals, you can make an informed decision that will help your business succeed.
There are a lot of things that you, as a business owner, need in order to have a well-run company. The problem is that most owners can’t afford to hire individuals to handle all of those different things. If you’re out there reading this and you don’t currently have the time or money to hire a full-time employee then this episode is for you. Listen to this episode to hear a breakdown between the pros and cons of an in-house employee vs an outsourced one.
Show Notes
00:00 - Intro
01:00 - Martin is Grumpy
04:30 - KB Stroy about Client & Outsourcing
05:30 - 2 Types of Outsourcing
06:50 - When to use subs - Examples and Reasons
09:45 - What happens if you don't outsource?
10:30 - Advantages and Disadvantages of Outsourcing
13:00 - Advantages and Disadvantages of In-House
14:30 - Inside Outsourcing
17:00 - Starting a Business - Stay in Your Lane
22:00 - What to consider when choosing who to outsource
24:30 - OSSHA 300 Form (Where is your audience?)
31:00 - Contracting is tough
31:15 - Look at your org chart - What do you need?
36:00 - Outsourcing gives you an outside perspective
37:00 - Getting started → Advisors and Mentors Checklist
39:30 - Strength Finders
44:00 - Specialize at What You Are Best at
46:30 - Closing Remarks
Quotable Moments
“Get your capacity and your sales up with outsourcing.” – K
“One of the main advantages of outsourcing is that you don’t have to hire people. A disadvantage is that you won’t have control like you would with an in-house employee.” – M
“You’re better served to focus on what you’re good at and to stay in your lane.” – K
“When you’re deciding to choose an outsourced partner, you still need to keep in mind how they will fit in with your company and team.” – K
“Look at your org chart and start to think about your role and the hats you’re wearing - take a step back and think about if someone else on your team should be doing these tasks.” – K
“List of potential roles and responsibilities that can be outsourced: bookkeeping, taxes, banking, attorney, HR, marketing, safety, training, and systems.” – K
“When outsourcing, you’re getting an outside perspective that will notice things you won’t.” – K
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