Small business outsourcing
Can you afford not to outsource some of your small business activities? Have you aligned your products and services to the way customers are now buying? With the introduction of the web and its ever changing landscape customers now expect products and services to be aligned to them and their needs. The customer has choice at their finger tips on a global level.
Small business outsourcing tasks may assist you as a growing business. You need to investigate your sales procedures, product selection, pricing, quoting and ordering processes to eliminate waste, redundant procedures or roles and improve ordering accuracy.
One of the best ways to go about this is to gather information from your staff and survey your customers to find out exactly what your customers want and need from your business. Consider alternatives such as outsourcing certain activities locally or overseas.
Before we move on too far though. As a small business are you ATO compliant yet for the Australian Government SuperStream regulations? Yet another regulation you need to be on top of and on a small scale these tasks are generally outsourced in conjunction with your accountant.
Sometimes it’s necessary to make difficult yet unavoidable changes, especially if you want your business to prosper moving forward.
Adjusting your budgeting plan for outsourcing may very well provide your business with the opportunity to hire skilled workers at a fraction of the cost compared to having them on the payroll full time.
As a starting point here are 10 "techie" tasks that you may want to outsource.
Questions to examine prior to making any outsourcing decisions;
- Is what is being asked of you a primary service offered by your business? If not, consider outsourcing.
- Competitively does your business have the advantage doing the job in house or would time be better spent on main services and products you supply?
- Is the product or service handled on a regular basis or an annual campaign? If it’s annual then would it be more cost effective to outsource.
- Can someone else do it faster and more efficiently than those within your business and cost you less in the long run?
- Is the cost of outsourcing lower than using time and manpower from within?
Searching for outsource services is no longer limited to your geography. You can deal with a business that fits within your needs and structure that’s only a click away.
The downside to outsourcing
The unfortunate down side of restructuring to become cost efficient for customers, streamlined and competitive, is the difficult yet sometimes necessary steps of making certain employees redundant.
The Fair Work Act should be consulted and understood prior to making any decisions.
‘The Fair Work Act states that a genuine redundancy occurs when the employer no longer requires the person’s job to be performed. The act also states that redundancy will not be deemed genuine if an award or enterprise bargaining agreement is in place where the employer must consult about the redundancy and it would be reasonable for the employee to be transferred to another department within the business.’
Consult with TJD Accounting and find a HR specialist to assist.
Read on for further discussion points.
Three main considerations when it comes to business restructuring
The first step before changing direction, using outsourcing to keep up with demand, global needs and looking at the necessary planning steps, is to ensure the use of Key performance indicators (KPI’s) as a measurement of the businesses performance whilst developing your new goals and strategies. Determine the goals you want and set the business performance levels you need to reach those goals.
To measure your businesses KPI’s it is important to identify the results you want, establish the financial figures needed to reach the goal, track the progress along the way, determine the percentage of change that has occurred for each goal, establish how often these reviews are necessary in tracking results and decide on the right financial avenue for your business to keep you moving forward.
Before entering the financing process though, realise the banker dealing with you works for the bank and as a matter of course has a duty of care to the bank. In many cases his remuneration is performance based and therefore may not always be acting in your best interests. That is why we recommend a visit to your accountant and your local commercial broker.
The main piece of advice we always suggest, is to organise finance when times are good, making provision for when times are not so good. It is always harder to obtain funds when you really need them.
The second consideration is insurance. It’s all well and good to change direction and outsource to overseas companies, but it is imperative that your insurance policies cover your business and its multilevel needs and can protect you from unforeseen events.
The Insurance Council of Australia estimates that 70 percent of businesses are under insured and uninsured. In most cases businesses never recover after major events. Either carefully look into the policies yourself for those insurances listed below or engage the services of a business insurance broker. (We can refer you to a trusted professional)
Personal income protection Revenue insurance
Work cover Property and asset protection
Premises insurance Contents and equipment insurance
Goods in transit Professional indemnity
Public liability Product liability
Vehicle insurance for business
Business owners also need to consider personal insurance, life insurance, income protection and trauma insurance.
Thirdly and most importantly, you can change the structure throughout the life of the business as it grows and expands.
However it is always best to seek professional advice when considering restructuring your existing business. There are many important factors to decide upon that can have long term complications if not taken into consideration at the very beginning.
When making plans within business, especially small business outsourcing, it is critical to understand the legal requirements for the vehicle you operate under along with the tax requirements, benefits and disadvantages.
Many business owners operate their business under a structure they don’t understand. Therefore careful planning with professional advice provides you with sound understanding of your obligations and long term planning benefits.
TJD Accounting Services
319 Keilor Road