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How to outsource services as a London small business

Grow London Local

Posted: Thu 22nd Aug 2024

Outsourcing has become a popular way for small businesses in London to draw on the expertise and resources of partners from outside. It not only allows for more efficient growth, but can be very important financially, as it removes the burden of recruiting full-time employees.

Read on for an overview of what outsourcing involves and what types of tasks you can get support with. You'll learn about the benefits and a step-by-step process for hiring your own outsourcing partner.

What is outsourcing?

Outsourcing means hiring a service provider outside your business to manage specific tasks for you. By handing over this work to an expert, you can devote more of your time to your business priorities.

What tasks can a small business outsource?

Accounting and finance

Many small businesses rely on a professional accountant for things like bookkeeping, payroll and paying taxes.

An accountant can check your accounts are accurate and make sure you're keeping to financial rules. They're also skilled at finding ways to improve cash flow.

Finding a qualified accountant is vital – a skilled professional can tailor their financial services to meet your specific needs. Get a clear idea of their fees before appointing them to take on your work.

Marketing

Digital marketing – such as social media management, PR, content creation and SEO – is another commonly outsourced area.

When you have professionals handling these crucial marketing tasks, you can trust them to find creative and innovative ways to boost awareness of your brand across London and beyond.

Many small businesses use marketing agencies. If you choose to take this path, carefully vet potential providers. Check client reviews and testimonials to ensure the provider's expertise fits with your target audience.

Human resources (HR)

As your workforce grows, it may be time to move your HR management to outside experts. Taking advantage of an HR specialist's knowledge can boost productivity and allow you and your employees to focus on other key tasks.

With HR outsourcing, you can hire a full-service provider to handle all aspects of your HR. Or, you can get help with individual projects or tasks, such as recruiting staff or managing payroll. This flexibility is good as it lets you choose the support that best fits your needs.

IT support

Because IT demands a lot of technical knowledge, businesses often hire a specialist to oversee their computer systems.

These specialists can also monitor networks, provide helpdesk support, keep systems secure, maintain hardware and back up data.

When outsourcing IT support, look for a provider with a proven track record of reliability. They should also be able to provide round-the-clock support so they can resolve any technical issues quickly.

Customer service

You might choose to hire an outside provider to handle customer inquiries, feedback and complaints on your behalf. In this case, they manage all customer interactions through various channels like phone, email, chat and social media.

When you outsource this support, the provider will train their agents to fully understand your product, company values and customer service policies to make sure they represent your brand effectively.

Admin

One of the most common ways to outsource admin is to hire a virtual assistant (VA). These skilled professionals can manage essential tasks like handling emails, booking travel and scheduling social media posts.

Working successfully with a VA hinges on clear communication and mutual trust. Setting clear expectations and checking in with them regularly can help you build a strong relationship and make sure tasks are completed efficiently and accurately.

Asian male and female cafe owners sit at a table looking at a laptop and discussing business

How can outsourcing benefit a small business?

Outsourcing can help you:

Lower costs: hiring full-time staff means spending money on salaries, benefits and training. Outsourcing avoids much of this expense.
Work more efficiently: passing on responsibility for certain tasks lets you focus on your "core" business. That typically boosts productivity and overall performance.
Access specialist knowledge: by partnering with outside contractors, you can take advantage of their skills and knowhow, particularly in areas like accounting and HR, which are often time-consuming.
Scale up or down as needed: outsourcing makes for a more agile business. You can expand or reduce your workforce based on a project's demands, without the long-term commitment of hiring full-time employees.
Operate flexibly: you can adapt quickly to market changes, better manage your budget and resources, and stay competitive.

How to outsource a service

1. Set your own expectations

Clearly define what you want done, and the areas in which you need help. This clarity will guide your search and make sure you're considering partners who match with your expectations.

2. Write a brief

A brief is a short document that sets out the key details of the work you're outsourcing. Here's what to include:

Scope: a description of the tasks (sometimes called "deliverables") you want the provider to handle. That way, everyone understands what the work involves.
Aims: what you're looking to achieve by outsourcing this project.
Deadlines: when the work will begin and end. A detailed timeline, along with milestones, will help manage expectations and keep the work on track.
Standards: the level of quality you expect from the provider.
Budget and payment terms: how much you're prepared to spend and how and when you'll make payment.
Communication: how you and the provider will check in (and how often) to discuss progress, address any challenges etc.
Confidentiality: if you need the provider to protect sensitive information about your business, mention it here.

3. Consider a number of providers

With outsourcing, it's really important to assess a variety of providers.

Start by seeking recommendations from your professional network. Colleagues or industry contacts may be able to point you towards reputable providers.

Reach out to potential providers and ask for references. That information will help you assess whether they're reliable and have a track record of delivering satisfactory results.

Go online to widen your search for candidates (a simple Google search of "outsourcing providers London" will generate plenty of options). Once you have a shortlist, assess each partner's industry experience, reputation and work history.

Finally, make sure that the outsourcing partner's values line up with yours, as this will help you develop a strong working relationship.

4. Review proposals and decide

A good way to compare proposals from potential outsourcing providers is to use an evaluation matrix.

Typically, you create a grid with your assessment criteria (for example, cost, relevant experience etc.) on one axis and the potential providers on the other. You then assess each option based on how well they meet your criteria, usually by assigning a numerical score.

Assessing each supplier's cultural fit is equally important. When you and the partner share the same values, it can help you collaborate and communicate more clearly.

5. Agree a contract for the work

Once you've decided on an outsourcing partner, draw up a contract for working with them. Like your brief, this will clearly set out the scope of work, timelines, deliverables, payment terms and so on. It's also important to outline each party's responsibilities.

6. Review the supplier's performance

As the work progresses, hold regular catch-ups with the partner to check everything is going to plan. You'll not only be able to identify areas for improvement, but celebrate successes together as well.

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