5 Tips to Outsourcing When Running a Small Business

When you own or otherwise manage a small business, it’s your responsibility to ensure that it runs smoothly and efficiently. That being said, more and more businesses are discovering the benefits of partnering with outsourcing partners.

However, when doing so, there are several tips that you should keep in mind.

1. Why Outsource?

Generally, companies outsource in order to give them an edge that will help increase productivity and efficiency at a cost lower than having an in-house team. That, or the outsourcing team simply has a high level of expertise that the organization requires.

Of course, the most common reason that many businesses decide to outsource is in order to reduce operating costs.

2. Before You Partner with Outsourcing

Before jumping in with any particular outsourcing partner, you need to answer these three questions to determine if it’s the right time to do so.

  1. Is that job function core to the business?
  2. Does the position provide a full-time service?
  3. What is the savings over keeping it in-house?

If the answer to the first two is yes, you shouldn’t outsource that particular job. Those jobs that are integral to the core business are your top-tier service providers and generally the face of the company to many of your customers.

Additionally, you should only outsource tasks such as clerical responsibilities, consultations, HR, IT, etc.

Lastly, if outsourcing is more expensive than in-house solutions, it likely doesn’t make practical sense unless they provide added value benefits.

Related: Check out these business tools to help grow your brand.

3. Outsource Payroll & Other HR Tasks

HR has a lot of responsibilities but truth be told, a lot of them are repetitive and costing you more money than they should.

Once you find out the answer to ‘what does a payroll administrator do?’ and how affordable it is, you’ll understand why we recommend outsourcing some of those HR responsibilities.

4. Outsource Those Monotonous Tasks

Aside from the money-saving reasons and the tasks listed above, outsourcing means that you have a larger talent pool at your disposal. Once you have viable candidates, you then can shortlist them so that you can select the one that best matches your organizations’ needs.


One area you should definitely consider outsourcing are those repetitive tasks and/or ones that take your time and energy away from concentrating on improving the business and revenue.

Other business services you may want to consider outsourcing are:

  • Payroll – As mentioned above, payroll and other HR tasks are perfect for outsourcing.
  • Data Entry – Tasks such as cataloging, inventory, and basic data entry can easily be outsourced in order to save you both time and money.
  • IT Support – With an outsourced IT team, you’ll have access to the resources you would have in the house but without the associated costs. Furthermore, you’ll never have to worry about software implementation, system updates, data protection, etc.
  • Customer Service – Gives you the added benefit of peace of mind as your customers will have access to support during holidays or other times your office is closed.
  • Legal Services – A full-time attorney is exceptionally expensive but an outsourced legal team as needed is more affordable and makes more sense for most mid-size and small businesses.

When it comes to outsourcing, your organization has to weigh the benefits and costs of your investment versus in-house solutions to ensure that it is indeed worth the switch.

5. Increase Productivity

When leveraging outsourcing properly, your smaller in-house teams will be able to be more productive. This is achieved because your staff can then focus solely on their specific productivity goals and not the repetitive, monotonous tasks associated with them.


With these 5 tips, you’ll be ready to make the most of your outsourcing initiative. Keep us posted on your progress in the comment section below!

Related: How many of these essential small business tools do you have?

Josh founded Money Buffalo in 2015 to help people get out of debt and make smart financial decisions. He is currently a full-time personal finance writer with work featured in Forbes Advisor, Fox Business, and Credible.