You could save money by outsourcing

Imagine how you would feel if you discovered you could save £18,000 per year by outsourcing 80% of the work done by an employee to specialist.

As a small business owner you would be kicking yourself for wasting thousands of pounds and for recruiting someone who turned out not to have all of the required skills.

You would question your own judgement for not realising the full-time job you filled was not a full-time job after all - you looked for a full-time employee before your business was ready, and you should have explored outsourcing from the outset.

And sheepishly, you would confess to your business advisor who had been trying to get you to make this change for many months. Your business consultant would be trying hard not to gloat - we try not to gloat, it's unprofessional!

Four days to do 6 hours work

This happened recently to a client. When he started up he took on a full-time finance manager but, competent at certain aspects of the job, this person struggled with the bookkeeping even after further training.

Exasperated, the MD outsourced the bookkeeping to a specialist and it turned out that the employee was taking 4 days to do what the outsourced bookkeeper was able to do in 6 hours per week.

And furthermore the MD was surprised and delighted that the bookkeeper produced exactly the management information he needed, and on time - a great improvement over his own employee. Clearly the employee was not going to master bookkeeping and was in the wrong job.

When to recruit?

As an early-stage small business, you are ill advised to take on full time staff, especially in back office functions such as bookkeeping, personnel, IT support and QA, until you know can save time and money by doing so.

Except where your business genuinely requires close-up support, consider outsourcing the work to specialists with the required skills:

• Seek advice and scope the job properly: work out how many hours per week the job should take - write a proper Job Description;  
• Ask someone with relevant experience to help you find the right company or person, and place a proper contract with them;
• Leave the decision to take on a full time employee until you can see that the total time spend on that function by your own staff and the contractor is at least 40 hours per week; and
• Always think about the potential negative impact on your business of using people who are not trained, or are not competent, in specialist roles.