Running a small business is hard work, and as your business begins to grow you will end up taking on more roles. Marketer, receptionist, bookkeeper, sales rep - small business owners have to wear many hats. When the load gets a little too heavy the choice between taking on employees and outsourcing becomes all-important.
The pros and cons of expansion and outsourcing will depend upon your particular business and situation. So, let's target at least 5 good reasons to consider employing your own staff rather than outsourcing.
1. Quality Control
Whether you hire or outsource, your clients will ultimately hold you responsible for the work that is delivered. As such, it's in your best interests to maintain control over quality. When you hire an employee who answers to you directly, you maintain more control over how work is completed. Furthermore, you can get in touch with your employees easily to rectify any issues. This means that you can shift your focus from completing orders to simply double-checking them, thereby saving time and maintaining the high standards that your customers expect from you.
2. Confidentiality
All successful businesses depend on confidentiality and a trade secret that distinguishes it. Of course, if you outsource work, you'll need to share your methods, techniques, and secrets with those you outsource to.
For example, if you make resin artwork and have a special method of blending colors, or you make cupcakes and you have a special ingredient, you will need to share your secret with anyone you outsource to. This means that you have no guarantee that they won't share this information with anyone else, or use it to their benefit. An NDA will help, of course, but it is far more efficient to simply hire someone and train them in your methods.
3. Flexibility
One of the biggest advantages that a small business has is the ability to change its operating procedures, marketing plan, or model—quickly. Being so dynamic is what helps small businesses survive, but if you begin to outsource certain tasks, your business will be less flexible. Changing to meet market demands will be harder.
Making changes when you hire in-house staff is easier because they work on your timescale—to your exact standards, and with your exact methods. This means that you retain some of the flexibility that you had when it was just you alone and your business will be able to react to changes with some level of alacrity.
4. Branding
In this crowded market and the "new normal", good branding is key to ensuring that a business stands out, finds a niché, and maintains a loyal customer base. When potential customers come across your products or website, they should be able to immediately recognize it as belonging to your company.
A brand develops over time, of course, as a result of your efforts, customer experiences, and your particular approach to marketing and social media. When you outsource certain work, for example by engaging a call center, it is much harder to keep your branding consistent. Of course, you can provide training to outsourced employees but this takes time and money. If you take on in-house employees, by contrast, they are more likely to pick up your company's ethics and approach through contact with you. Plus, you will be able to help them understand your branding approach (personally). This strategy has been employed even by very large companies like Dell, who found that having smaller, in-house call centers increased customer satisfaction because the staff they had trained (personally) and allowed access to their systems were able to resolve more technical queries than outsourced staff.
5. Liability
Outsourcing can, of course, affect your operation and reputation, but few people realize that it can impact you legally as well! If you hire an outside service provider and they make a mistake that causes your customer financial, emotional, or (Almighty forbid) physical harm, then you could be held legally liable for that mistake.
Likewise, if they make an error with tasks pertaining to your business, it can come back to bite you.
For example, if you outsource your bookkeeping and there is an error in your tax preparation documents, BURS or the IRS will hold you accountable. Likewise, if you hire someone to make furniture and it turns out to be faulty, you will be liable for any damages caused to their home or person. By keeping these things in-house, you stay in the loop and retain control of the process.
Outsourcing some tasks can be tempting—it makes sense financially (for sure) and feels less daunting/less permanent than expanding your in-house operation... and it can suit some businesses. In the end, only you can make this choice. Therefore, always consider all of the options (first). Look at the pros and cons—and make a choice about your contracting needs. Don't rush your decisions. Ever.
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