Starting a new business can be an exciting endeavor at first, but it’s also one that entails a lot of time and effort. As a startup owner, you need to wear many hats and juggle numerous responsibilities. This isn’t a sustainable approach, however, and you might eventually find yourself overwhelmed by the sheer number of tasks you need to finish and issues you need to address.

Outsourcing services can help companies focus on their core business while delegating some of the functions to professionals who can focus on them full time. With the help of an outsourcing company, startups and scaleups can get the support they need to grow and thrive. Read on to learn more about the benefits of outsourcing services, the latest outsourcing trends, and tips on how to choose the right outsourcing services for your business.

The Benefits of Outsourcing Services

The most apparent benefit of outsourcing services is getting access to a pool of talented and experienced professionals without the need to hire full- time employees. Your time and resources will be limited if you’re just starting out, and having extra hands to help you out is a welcome break from being the one who tries to do everything. Another benefit of outsourcing services is that they provide people with varied and specific backgrounds and expertise, depending on your current business requirements.

This means that you get to save money on overhead and other business costs while getting the talent that you need to run your business smoothly. By outsourcing certain business functions, you can make time for the more important aspects of your business, like getting new clients and improving revenue streams.

Outsourcing services is a cost-effective solution because it allows you to pay only for the services you need. This is especially useful for businesses that have seasonal needs because you don’t need to hire full-time employees for temporary roles.

The Latest Outsourcing Trends

The pandemic has led to a rise of virtual assistants in the workforce, and most of these workers are remote. Virtual assistants are a valuable element of the workforce because they can provide support in a variety of business aspects, including conducting research, managing your schedule, and filing and responding to emails. Depending on your business needs, your virtual assistant may take on more tasks and responsibilities. This takes the burden of the day to day off your shoulders, allowing you to focus on the big picture while they take care of the details.

Also popular among outsourcing services is software development and IT. Many companies, especially digital-first businesses, build custom software applications to make product adoption easier for customers. Outsourcing this task not only helps you save time and money, it also allows you to work with a team of experienced developers who have the skills and expertise needed to bring your vision to life.

Cloud computing is another outsourcing trend that is gaining popularity among startups. As businesses rely more on online and digital solutions, storing and accessing data and applications via the cloud has become a necessity for most companies. Cloud computing solutions help startups and small businesses reduce their IT infrastructure costs while also improving their flexibility and scalability.

Tips and Tricks for Successful Outsourcing

Outsourcing services are not something you “set and forget.” They must be tailored according to your business needs and regularly monitored to see what works and what doesn’t. Outsourcing ventures can be short- or long-term, and the latter may require modifications along the way as the needs of a business evolve.

To ensure successful outsourcing, below are a few simple tips you can follow.

Start small: While outsourcing services can help a company save money and optimize business processes, starting with a small project will show if outsourcing works for your business. Outsourcing ventures are designed to be simple and straightforward for businesses that need them, but different companies have different needs. If you’re new to outsourcing, it’s best to ensure how it, and your chosen outsourcing services provider, can help push your business forward.

Set clear and specific expectations: It’s vital that you and your chosen outsourcing services company are aware of project goals, timelines, and deliverables at the onset. This helps avoid miscommunication and ensures that you’re both on the same page throughout the project. Goals and deadlines should be as specific as possible to avoid any misunderstanding.

Monitor progress: Setting milestones and regularly monitoring your outsourcing team’s progress is vital in determining if you’re well on your way to achieving your goals. It also makes objectives more manageable since they’re broken up into smaller ones, and it provides the opportunity to celebrate small wins. This, in turn, motivates the team and makes them more productive and receptive to feedback.

Protect intellectual property: This is something worth mentioning specifically because it’s something that’s often overlooked by companies that decide to outsource. Outsourcing means that you will work with a third-party provider and may have to provide access to some, if not all, your digital and physical assets. Ensure that the outsourcing company you work with signs a non-disclosure agreement (NDA) to protect your company’s confidential information and intellectual property.

Keep communication lines open: Any changes or updates to your business requirements should be communicated immediately to your outsourcing service provider so they can make the necessary changes. You should also be responsive and prompt in case they need assistance or need to discuss something with you to avoid delays and rework. Providing constructive feedback is also beneficial because it helps your outsourcing partner improve their work and better understand your business needs.

Build relationships: Instead of treating your outsourcing services provider as an outsider, considering them as part of your extended team helps build trust and encourage open communication. This culture of openness allows a more cohesive work environment where people work together toward a common goal.

Measure success: The specific goals you set should also be measurable. Whatever the nature of your business, there should be a system with which you can measure the success of your business endeavors. This is necessary in ensuring that your projects are delivering the expected ROI.

Make mistakes learning experiences: Things won’t always go as planned and you should have contingency plans in place for such occasions. In case things do go wrong, take it as an opportunity to learn from your mistakes and improve your outsourcing processes for future projects.

Choosing the Right Outsourcing Partner

In choosing the right outsourcing services provider, there are important considerations; first of which is assessing your business needs and identifying the tasks that you need to outsource. This not only helps in determining the best outsourcing partner for your business, it also clarifies your current business needs and allows you to delegate some functions to a third party provider. Creating an outsourcing plan will also help in setting the direction for the long term, whether your outsourcing venture is a short-term or long-term arrangement.

Second, you need to set clear and specific expectations and communicate them effectively with stakeholders so all of you are on the same page. Aside from the business goals the outsourcing services aim to achieve, project timelines milestones, and other deliverables should also be communicated. Establishing communication protocols and channels is an effective way to ensure that nothing falls between the cracks for the duration of the outsourcing venture.

Third, look at the available outsourcing services around you and compare their cost and offerings. It’s also useful to check user reviews to see what type of clients these companies work with and their rate of success. It’s also ideal to work with an outsourcing services provider with experience in working with startups because they are usually more flexible and can easily adapt to sudden changes in direction without sacrificing the quality of work.

Finally, you should be prepared to invest in quality outsourcing services. Cost efficiency is one of the goals of any outsourcing venture, but you should also remember that you get what you pay for. If you’re running a business, this holds much weight because it can mean the difference between a pioneering business and a company that had potential. Investing in quality outsourcing services will help you achieve better results and save you time and money in the long run.

Business Growth Through Outsourcing Services

Outsourcing services can provide startups with the support and expertise needed to succeed in today’s competitive business environment. By leveraging the latest outsourcing trends and choosing the right outsourcing services, startups can save time and money, access a pool of talented professionals, and focus on the core aspects of their business. To ensure successful outsourcing, it’s important to follow best practices and learn from others’ experiences. With the right outsourcing services and approach, startups can reach their full potential and achieve their business goals.

Schedule your free consultation today and learn more about the outsourcing services that can help enhance your business efficiency and boost your company’s growth.

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While it’s inspiring to be at the helm of an up-and-coming startup, especially if you have a groundbreaking idea that you think will change people’s lives, it’s not always a cakewalk. In the early stages, it can be challenging to maximize profits if you don’t prioritize your spending. Startup business owners often fall into the trap of overspending and incurring losses in the long run instead of investing in only the essentials and maximizing their returns.

Aside from an ineffective business plan or lack thereof, one of the most common business challenges is the lack of financing or working capital. At times, business owners aren’t aware of the revenue vs. expenses ratio, which results in losses that can adversely affect the business at a critical stage in its development. Some entrepreneurs also engage in a self-defeating “price war,” pricing below standard in an effort to come out first in a saturated market.

If you have a specific business idea but are constrained by costs, consider starting small: Choose a business model with low startup costs. This allows you to enter the market at a fraction of the cost while still working towards your ultimate goal. This way, you can build momentum without significant financial risk, eventually expanding as your business grows. By strategically choosing a low-cost startup model, you can effectively manage your resources and set the stage for sustainable growth, avoiding the financial strain that often hinders new businesses.

The good news is that there are ways to save up on business costs while also increasing productivity and profitability. The trick is finding the method that works for your business and seamlessly integrating it into your business model and workflows to minimize disruption and, of course, costs.

Common Business Startup Costs

Building a business is not just about finding office space, furnishing it, and hiring people. A lot has changed through the years, and with the rise of work-from-home setups, remote work and hybrid working arrangements, the value of flexibility and adaptability has become front and center for business owners both old and new. This flexibility applies to both how companies hire talent and how they set up working arrangements.

“If you build it, they will come” is a meaningless maxim if customers come to a broken system and a messy customer journey and experience. While having customers is good, relying on customer acquisition without a proper plan and system in place will end up losing precious capital instead of earning revenue. As such, it’s vital that you learn about and prepare for the common startup costs so you don’t inadvertently lose money while trying to build your startup.

Borrowing Costs

Regardless of the type of business you’re setting up, you will need an infusion of capital. For most new entrepreneurs, this will come from a small business loan, typically referred to as debt financing. Another option of financing a business is through equity financing, which requires the issuance of stock. Equity financing doesn’t usually apply to startups because most of them are sole proprietorships.

Borrowing costs include the interest payments of the business loan, which should be included when calculating the actual cost. Defaulting on a business loan is an expense that can cost you your startup, so it’s important to plan for borrowing costs at the onset. Business loans can be acquired from local banks, lending companies, and other financial institutions. Of course, you will first have to consider

Insurance, Permits, and License Fees

To keep your business running, you will need to submit to inspections and acquire the proper licenses and permits. You may need industry-specific permits depending on the classification of your business. Otherwise, you will need to have the standard business permits and permit to operate.

Together with these fees, you will also need to consider insurance costs. Insuring your business assets, employees, and yourself from any liabilities will help avoid expensive lawsuits. As a rule of thumb, every business should have liability insurance to protect the business from claims of property damage and bodily injury caused by accidents and other unforeseen circumstances.

It’s also a good idea to include liability protection in your contracts. This will protect your from legal action against non-fulfillment of a contract due to a third party, acts of nature, or other uncontrollable occurrences. Talk to a lawyer and discuss your options early on so you won’t need to discuss them  when you’re already facing a lawsuit, which is much more expensive and disruptive to business operations.

Supplies and Equipment

Aside from choosing what equipment your business needs, you will also have to choose between buying or leasing them. This decision will be different for every business depending on the current state of business finances.

Leasing may be a viable option to save on equipment costs, since you can see which equipment you really need and use on a regular basis. This will provide you vital information on what type of equipment you need to purchase later on. Of course, you should always consider the type of equipment and the terms of lease before making a decision, as leasing may not prove to be your best option.

Technological Expenses

Technological expenses include the cost of building a website, setting up information systems and networks, acquiring software licenses, and others related to technological assets and infrastructure. Some companies, especially startups and small businesses, choose to outsource some functions and infrastructure to save on technological expenses and other related costs like accounting and payroll.

Marketing and Promotion

Promoting one’s self is required for every startup or new business because it’s the only way to get your brand out there and in front of your target audience. There are a myriad of ways to go about this, however, and you’d be surprised at how challenging it can be. Most promotion efforts can be done online nowadays, but the traditional ways of promotion and advertising are still available and can help boost your brand and reputation.

With self-promotion, of course, also comes marketing, which refers to a company’s efforts to attract clients and retain customers. Through the years, marketing has become sort of a science, with many experts that can provide you an advantage in today’s competitive business landscape. It’s advantageous to employ  the services of dedicated marketing companies that have years of experience and a track record of success.

Manpower Costs

A business needs people and talent. For most companies this is the main consideration because it will help keep your business running like a well oiled machine. Therefore, wages and employee benefits should be part of your costing and plans early on, even if you have no plans of hiring people just yet.

Manpower or labor costs fall under two main categories: direct or production labor costs and indirect or non-production labor costs. Indirect labor costs refer to the wages and benefits of employees who maintain equipment or provide similar types of support to employees in production or those who are responsible for creating the company’s products.

Labor costs are important because they can affect product pricing and can sometimes cause you to go beyond the actual cost of the product, which also negatively affects your bottom line.

How to Reduce Business Startup Costs the Smart Way

There are inevitable costs when stating a business, but there are also ways to manage these costs effectively so that they don’t hurt your profits or put a monkey wrench in your business plans. Below are a few tips that can help you cut business costs—the smart way.

Tip #1: Outsource Key Functions

Employee wages and other benefits are one of the biggest business expenses, especially for startups that are starting with a limited budget. Hiring employees directly can lead to large labor costs and overhead expenses, plus you’ll have to consider employee benefits and other mandated employment policies and regulations.

You can even hire an outsourcing company to do your business process outsourcing for you. You need to be proactive for the  venture to be successful, though. You should establish clear and specific processes and document them so they can be adopted by your chosen outsourcing partner. Outsourcing is also an excellent option for seasonal roles and functions. You can cut business costs significantly by outsourcing services only when the need arises instead of hiring full-time workers.

Tip #2: Digitize Documents and Processes

Digitization won’t only help you save on business costs, it will also help the environment by reducing your carbon foot print. Depending on your business, physical documents may not always be necessary and can even be wasteful. Papers and other physical documents take up space and can also rack up storage costs as they pile up and require you to rent space for their storage.

By digitizing your documents and other files, you can eliminate storage and other physical maintenance costs. You can also use the space you save for other business operations instead of wasting them on storage.

Tip #3: Automate Business Processes

Business process automation may seem complex, especially if you’re just starting out, but it’s a process that will pay for itself in the long run. The biggest benefit of automation is giving you back time; by automating business processes, you and your employees can complete tasks in less time and increase overall efficiency. It also reduces the probability of human error and avoids rework and repetition, minimizing overall business costs.

Tip #4: Invest in Digital Marketing

Depending on the nature of your business or the type of product you wish to bring to market, you may be facing an oversaturated market. There are already a number of established firms that may be offering a product or service similar to yours, and these companies control a significant share of the market. If your company or brand name isn’t out there with the rest of them, there’s no way that you can get a competitive advantage.

Fortunately, marketing your brand isn’t as hard as it was before because there online tools and platforms available that will help you do just that. Digital marketing allows you to maximize your reach without emptying your pockets. Leverage social media, email marketing, search engine optimization (SEO), online ads, and other digital marketing avenues to save on marketing expenses and avoid giving too much effort on campaigns. There are also tools that can help automate your marketing campaigns. Check out what’s available and see which ones apply to your business needs.

Improving Cash Flow for Startups

Improving cash flow is crucial for startups aiming to steer clear of funding missteps. Here’s how focusing on cash flow can be a game changer:

Boost Financial Flexibility

When a startup maintains a positive cash flow, it gains the flexibility to manage expenses without relying on costly debt solutions. Ensuring that cash flows steadily into the business means you can handle unforeseen expenses more easily and seize new opportunities without seeking external funding.

Streamline Receivables

One effective strategy is to optimize your accounts receivable. By ensuring that customers pay promptly, you can keep funds circulating within your business. Implement measures like:

• Requesting upfront deposits: This ensures a portion of the payment is secured before services or products are delivered.
• Immediate invoicing: Send invoices right away to maintain a consistent billing cycle.
• Incentives for timely payments: Consider offering discounts for early payments and charging interest for late settlements.

Manage Payables Strategically

On the flip side, managing your accounts payable with cost efficiency can further safeguard your cash flow. Negotiate terms with vendors to extend payment periods, such as net 30 or net 60 terms. This allows you to retain cash longer while still meeting obligations.

Proactive Planning

A proactive approach to cash flow management helps avert potential cash shortages. With efficient cash flow practices, a startup not only keeps afloat but also thrives by reinvesting in growth and innovation.

In summary, maintaining a well-managed cash flow is foundational for a startup to avoid costly funding gaps and build a financially stable future.

Cut Business Costs With the Right Outsourcing Partner

Business startup costs will vary for every company. As such, it’s vital for a startup to know about the costs of starting a business and how it can prioritize spending so that money doesn’t go to waste. When it comes to building and scaling a startup or small business, outsourcing can help save money and time so that business leaders and stakeholders can focus on providing the best service and building a solid customer base.

Schedule your free consultation today to see how we source the best talent available in the Philippines and find the ones that fit not only your business requirements but also your company culture and vision. The people that make up your organization are as important as the business strategies that move it forward, and we at nXscale believe that they should go hand in hand in helping the business realize its bigger goals.

The pandemic has brought about several changes, and most of them seem to be permanent—or at least more long-standing than expected. Regardless of the type of change, the changes have led to a shift in the way people live and, as such, businesses have had to respond with changes of their own.

Hybrid work isn’t a new concept, but it’s one that has been pushed to the forefront due to the circumstances brought about by COVID-19. The transition to a hybrid model is also not as easy as it seems; hybrid work means allowing, even encouraging, employees to work from home while also scheduling time for them to be in the office for face-to-face meetings and more effective collaboration.

However, companies can take this as an opportunity to reset the way we work using a hybrid model, given that 65% of remote workers prefer to stay at and work from home. These work-from-home employees cited significant cost savings and the elimination of commute time from the workday as the main reasons for their preference.

The Two Dimensions of Hybrid Work

The transition from traditional work arrangements to a hybrid model is far from straightforward. The difficulty lies in how most companies think about work; they view it through the lens of an employer instead of taking individual “human” concerns into consideration. While institutional concerns are crucial, employers should remember that every individual has his or her own needs and ways to deal with change.

The key in successful hybrid work is knowing that it isn’t one-dimensional. Employers must think about the new business model along two planes: time and place. At the moment, place is getting the most attention because most employees have shifted to a work-from-home or remote working arrangement. From being constrained to work in the office, employees have been working remotely, giving them the freedom to work asynchronously at home or from anywhere.

Before the pandemic, few companies offered the flexibility to work remotely. Although some offer flexibility in the form of flexible hours for their employees, this is far from a hybrid model where employees are free to work anywhere, anytime.

Breaking the Chains of the Traditional 9-5

As companies continue to see evidence of productivity despite flexible working arrangements, they have been gradually moving toward a hybrid working model that provides both employee satisfaction and a significant boost in productivity. To ensure the success of the transition, businesses will have to consider the following aspects.

Specific Tasks

When considering tasks and responsibilities, you should think in terms of the drivers of productivity—energy, focus coordination, and cooperation—because these will be affected by changes in work arrangements.

Energy is affected by both dimensions of hybrid work because those who work from home say that being able to do so energizes them and being free from the struggle of long commutes gives them more time to spend with loved ones and take care of themselves. Focus is affected by time because working asynchronously frees an employee from scheduling constraints and the demands of co-workers, making place a secondary factor. Lastly, coordination and cooperation are both affected by time and place. Regular communication and collaboration require a shared space where employees can get to know each other and work together during a set schedule.

Workflows

After considering the specific tasks, you then need to study how these tasks get done. Businesses should be able to coordinate the work done by employees with the other members of their team and the consumers of their work. This was a minor consideration when employees worked together within the same schedule in the office, but it has become more complex in the world of remote work. Fortunately, there are available digital tools that can help make hybrid work viable to your business. Encouraging digital adoption and proficiency in these tools will help ease the transition into more flexible working arrangements.

Employee Preferences

Employees’ energy and productivity are affected largely by their personal preferences. For example, an employee may prefer to work from home because there’s less distraction and he or she is able to skip the commute to the office.

Therefore, employers should be able to understand employee preferences and help others accommodate those preferences. Diagnostic survey tools can help you get a pulse on how employees are feeling and what their feedback is on certain company initiatives. It can help managers better understand the personal preferences of their team members and provide tools and solutions that help the team be more energized, engaged, and productive.

Fairness

The notion that employees are being treated unfairly can significantly hurt the overall performance of the workforce. In the past, companies experimented with hybrid work arrangements on an ad hoc basis, resulting in varying degrees of flexibility provided to different teams and departments. This can lead to employees feeling that they are being treated unfairly because they don’t know the reasons why flexibility is being afforded to some employees and not to others.

As new practices and processes are developed, it’s important to be sensitive about issues concerning inclusion and fairness. The new hybrid work arrangement should be rooted in a company culture that embraces empathy, collaboration, and a “speak-up environment.”

Change inevitably brings about feelings of inequity, and the best way to address this is to make the employees part of the planning and design process as much as possible. They need to feel that their voices are being heard and that their opinions are being considered in the creation of new and more flexible work arrangements.

Embracing Hybrid Work Through Outsourcing

Transforming your business using a hybrid model means that you don’t need to hire in-house talent to meet your business goals. This is beneficial in two ways: you can reduce overhead and hiring costs while opening up your business to a vast talent pool that goes beyond borders. Identify key tasks and determine what can be outsourced to a third party so you can come up with an arrangement that works best. Think about scaling your business smartly and focus on eliminating unproductive components of your business and replacing them with more efficient processes.

Schedule a call with us today to see how strategic outsourcing can help optimize your business and eliminate duplication and repetitive tasks. Let us help you get the most out of a hybrid work setup so you can focus on expanding your business and transforming it into the well oiled machine you imagined it to be.