Small and medium-sized businesses (SMB) are the backbone of America, providing more than half of all private-sector jobs. Most SMB owners are forced to wear many hats as they lack the vast resources of large companies.
“Small business retailers are among the hardest working people in America, often keeping long hours, overcoming numerous challenges and making repeated sacrifices to pursue their dream and make their business successful,” said a 2016 National Retail Federation (NRF) survey.
SMB owners can work long hours while fulfilling a variety of roles, with 1 in 5 putting in work weeks that are 80 hours or longer, according to the NRF.
SMB Owners: Jack-of-all-Trades
The risk for SMB owners is that their proclivity to try and handle everything can lead to them trying to do too much to the detriment of their business.
“The survey showed that when it comes to managing a multitude of daily tasks to keep a business up and running, the buck usually stops on the retail small business owner’s desk,” said the NRF survey.
Small business owners are jack-of-all-trades, according to the NRF survey, managing the following either themselves or in-house:
- Recruiting and hiring of employees (98 percent)
- Product development/new ideas (96 percent)
- Benefits management including health care (96 percent)
- Marketing and advertising (95 percent)
- Data security and payments processing (87 percent)
- Payroll (83 percent)
- Website (83 percent)
- Accounting and bookkeeping (81 percent)
- Taxes (66 percent)
Sam Darwish writes in Forbes that SMB owners should take a page out of the playbook of larger enterprises that are not afraid to outsource certain tasks.
“Outsourcing is a great way to help your business as it progresses through its various growth stages,” writes Darwish. “In order to maintain steady growth and productivity, you should find a happy balance of in-house employees and outsourced resources.”
Questions to Ask When Considering Outsourcing
There are so many professionals that SMB owners can call on when outsourcing from payroll management to employee benefits to IT to marketing that it can be confusing deciding what exactly to outsource and what to handle in-house.
“Business owners juggle a myriad of responsibilities on any given day,” wrote the Forbes Business Council on Oct. 8, 2021. “When facing a mile-long to-do list to finish in a limited timeframe, leaders may consider outsourcing some of their short-and long-term projects. While this can be helpful in lightening the workload, it's prudent to carefully consider which tasks get outsourced and which tasks stay in-house.”
The Forbes Business Council suggest asking a series of questions to find out if you should outsource a business task including:
- Is It Worth the Value of My Time or My Staff’s Time? The question is not usually can a task be accomplished in-house but whether the value of your time or staff’s time spent on the task is worth more than what it would cost to outsource the activity.
- Can You Do This Task Best In-house? Some experts believe that business owners should adhere to the saying, “do what you do best and outsource the rest”. Bottom line is to focus your time on the activities that make your business special and not get bogged down on tasks that take away from that advantage.
- Will it Help Your Company Reach Its Goals? Outsourcing tasks can free up your employees to focus on priorities to help your business meet critical goals.
- Will Outsourcing Create a Better Customer or Employee Experience? Outsourcing tasks like website, SEO and graphic design can help make your customers have a better experience. Internally, outsourcing HR services and employee benefits can help create a better employee experience.
- Do We Enjoy the Task and Can it be Done by Someone Else? Some experts like to make a chart of tasks dividing them between categories of “tasks my team and I enjoy doing”, “draining tasks we don’t enjoy doing”, and “tasks that can only be done effectively in-house”. Tasks in the draining category that can be done effectively by a third party are candidates to be outsourced.
Important Tasks That Can Benefit from Outsourcing
Outsourcing important tasks can free up valuable time and resources within your business.
The New York Times says that long-term benefits from outsourcing can include:
- Control capital costs
- Increase efficiency
- Reduce labor costs
- Start new projects quickly
- Focus on your core business
- Level the playing field
- Reduced risk
Important tasks your business should consider outsourcing include:
- HR Services: Many SMBs do not have a need for an HR department in their earliest days but the need for professional HR advice and services can sneak up on them. A PEO like Employer Flexible can provide HR services including a Human Resource Information System (HRIS), employee engagement strategies, HR compliance guidance, and strategic HR planning.
- Accounting and Bookkeeping: The NRF survey showed that accounting and bookkeeping is one of the most outsourced tasks with activities such as invoicing and bill collections handled by an outside company. Tax time can cause a lot fewer headaches each year when your records are in order and professionally kept.
- Employee Benefits: In the tightest job market in memory with recruiting and retaining talent at a premium, outsourcing your employee benefits, including insurance, medical benefits, and retirement plans, can pay big dividends for your business.
- IT: The pace of IT innovation makes this an area that makes sense to outsource. In addition to having access to the latest tech, outsourcing can give SMB access to cloud resources they otherwise might not be able to afford.
- Inbound Marketing: Outsourcing your inbound marketing can help your business generate consistent content that can help you attract customers and create leads that turn into sales.
- Payroll Management: Outsourcing payroll administration and payroll tax administration to a PEO can alleviate a lot of frustrating in-house employee hours which can be spent on other tasks.
- Web Design and SEO: The COVID-19 pandemic reinforced just how important your website and search engine optimization (SEO) can be in a digital-first world. Outsourcing allows your business to utilize responsive websites which are up-to-date and take advantage of the industry’s best practices.
- Risk Management: Some areas, such as risk management and workers’ compensation insurance, can be almost Byzantine complex that it pays to have it outsourced to professionals that thoroughly understand the topic.
While your business may have to call upon several providers to outsource tasks, a PEO such as Employer Flexible can handle multiple solutions such as HR services, employee benefits, payroll management, and risk management.
Contact Employer Flexible today to find out how we can support your small to medium size business.