The definition of a small business owner in the past (when I first entered the business world in 1974) was that you had to wear many hats. Working with clients, purchasing product, managing inventory, accounting, doing payroll, heck, even emptying the wastebasket were all part of “doing your job”. Many small business owners appreciated the fact that they had so much variety in their day. And, it was about “ownership” which ato many, also meant “control”.
Small businesses today face numerous challenges. The economic slowdown has meant we had to either reduce our costs or expand our client base. (or preferably both!) Today’s global economy means that you are no longer competing with another business in your community – you are competing against other businesses world-wide. And guess what, some of those businesses are working out of their homes with very little overhead. Marketing used to consist of decisions like “Should I do a direct mail piece, or go with electronic media”. Now, it’s all about social media and attention directed to internet sites, blog sites, Facebook, LinkedIn, twitter, electronic coupons. And don’t underestimate the amount of time it takes to not only learn these but to also maintain them. Nothing is static anymore. It’s very dynamic and requires your full attention.
Today a small business owner has to focus on being a specialist in their field. Today’s small business has to be lean and focused on delivering to their clients as competitors wait around every corner to compete for their clients.
Focusing means avoiding distractions. These distractions are some of the same “hats” that business owners used to wear.
- Payroll companies have seen tremendous growth as it no longer makes sense to hassle with calculations of wages, benefits, taxes while trying to keep up with the business.
- Human Resources is a major challenge for small businesses as new laws and rules have come into play.
- Warehousing and Fulfillment Operations can be outsourced to a more efficient operation when it’s to an organization that is focused on that are alone.
- IT / Network Support is commonly outsourced today for businesses that can’t justify a full time internal position or who want to have a depth of staff available that wouldn’t not be available with one internal person.
- Legal and Accounting have long been outsourced areas, even when small business owners wore the many hats (after all, a head can only support so many hats at a time)
The benefit to doing so many tasks in the past was that you felt you had “control”. You knew where things stood and if tasks were being done according to your stands and on time. When you begin to outsource, there can be that sudden feeling that your losing control. So the question is, how do you outsource without losing control?
- Step 1 – Define your “Success Criteria” In other words, for this outsourcing role to be successful, what do you hope to achieve from it. For our business, the first thing clients say is “Network Uptime” which makes sense. I always ask clients to identify three success criteria. It sets the stage for their expectations and gives us an opportunity to know what they are (and more importantly, to tell the client up front if they are realistic). After all, if the expectations are unrealistic or simply cannot be met, what’s the purpose of engaging, right?
Step 2 – Treat this as a hired staff member After all, in the past, this would have been a staff member, right? That was where you had the control – you had authority over that person or role. This shouldn’t change. So the questions is “What would you do in the case of a hired staff member?”
Implement a probation period. Frequently a hiring takes place with the understanding that person is on a 90 day probation, or trial. If it’s not a good fit that person will not be retained. Why shouldn’t an outsourcing arrangement give you the same latitude? Of course, everyone is hoping for a long term relationship (just as you are when you hire an individual) but you shouldn’t be held hostage to a contract that forces you to remain with an outsourced provider for a lengthy period of time without a termination option (without penalty)
Define reporting requirements. When a person plays a supervisory role, they either interact with staff members daily or have regularly-scheduled times for reporting. This should be no different with an outsourced party. Let’s be clear, if an outsourcing organization doesn’t already have a plan for reporting, that should be a red flag. However, you need to be clear about what type of reports you want and the frequency. Being informed puts you in a position of being in control.
Hold performance reviews. Most organizations hold performance reviews either semi-annually or annually, why shouldn’t an outsourced role be held to the same standard? Holding these reviews provides the opportunity to reaffirm the “success criteria” I mentioned earlier.
Step 3 – Accountability If something is not being done to your satisfaction, this should have been addressed in the prior step, but if it hasn’t been you (the employer) do have the responsibility to point this out and demand correction.
The bottom line is this…..outsourcing does not mean losing control. But it is the responsibility of the outsourced part to deliver to the employer’s expectations and it is the responsibility of the employer to hold the “employee” accountable.
If only security were as easy as fastening a padlock on a computer, we’d all rest easier. Increasing reliance on systems to collect and maintain data and records, increased volumes of correspondence that frequently contain sensitive data including credit card information and social security numbers and increased regulations regarding the handling of data (PCI Compliance, HIPAA requirements, etc.) all combine to make network security a bigger responsibility.
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