So you have a business idea, you’ve come up with a plan, and you’ve funded it with either personal finances or a round of investments. Congratulations! You’re one step closer to entrepreneurial success. Now comes the time to implement your plan and achieve operational excellence.
But not so fast. Whether you have a two-year runway or a two-month airstrip, the most important aspect of running a quality business is investing your company’s money wisely. This means that regardless of your lofty business goals, you need to hire effectively so you receive the maximum results for the minimum cash outlay. It’s a balance of return on investment (ROI). You don’t want to overspend, and at the same time, you don’t want to nickel and dime your way to underperforming operations just to save a few bucks.
Ultimately, you want to allocate your assets to the most important parts of your business. If you read our last article on the benefits of outsourcing, you already know that subcontracting is the best way to build a high-quality team of experienced professionals for the right price. But this raises the question: What business operations should be outsourced, and what should be kept in-house?
Well, ask yourself, do you have a law degree, CFO-level business acumen, or connections that can get your brand in front of your ideal consumer? If you answered no to any of these, then it’s time you explored the following outsourcing options:
Accounting and CFO Services
One of the most common business operations to outsource is accounting services, such as payroll, accounts payable, accounts receivable, and more. These processes are monthly recurring aspects of the business that are easily allocated to an accounting or financial services firm. In fact, by subcontracting your business accounting, it’s possible to work with a CPA-level accountant for a fraction of the cost of a full-time staff accountant.
However, the financial services that can be successfully outsourced don’t stop there. By subcontracting a firm with CFO- and Controller-level services, a business can tap into the knowledge of a C-level executive without needing to give up massive amounts of equity or spend limited resources.
For example, with this level of part-time attention, it’s possible to receive strategic business planning and implementation, cash flow management and projections, long-term budgeting and forecasting, and the insights into company structure and infrastructure. What’s more, firms with CFO-level services can also help with tax planning, which saves companies large sums of money and reduces the amount of Aspirin needed to deal with the headaches of tax liabilities.
Overall, outsourcing to a financial services firm reduces company risk and gives you financial peace of mind. Who wouldn’t want that?
Another common part of a business to outsource is legal services or as-needed legal counsel, because, well, not many of us have law degrees or have passed the bar. But more specifically, legal needs are subcontracted because the business environment is riddled with red tape that can cause business failure with a single misstep.
A law firm should be engaged at the onset of any business venture. Your outsourced legal team can help choose the optimum business structure, that, when added to your subcontracted financial services firm, reduces risk and increases tax advantages. Then, once it’s time to hire your first employee, whether it be an executive or an administrative assistant, your legal counsel can be engaged to draft effective employment contracts that protect the business and include the correct mix of equity and salary.
Further, when your contract needs expand from headcount requirements to more complex things like business deals or even the sale of your company, your outsourced law firm can draft and negotiate contracts with the opposing party. For example, if you sign a long-term licensing deal with another firm, and then they breach the terms of the contract, do you know what to do? Will you even know if there’s a breach in the first place? A subcontracted law firm can help.
Take it from us first-hand, building a positive relationship with a long-term legal partner works to avoid legal pitfalls down the road. And often times, we as business owners can’t even see the potholes before we hit them, while a law firm can.
Marketing and Public Relations
The two aforementioned business operations consist of back-office and high-level strategic duties. However, a company’s outsourcing needs don’t stop there. Once you’re ready to start generating revenue, marketing and PR becomes immediately important. However, it’s often hard to hire a full-time marketing professional before there are significant profits.
To help, outsourcing your marketing needs to a PR firm is a great way to start building brand awareness, generating consumer leads, and creating a group of loyal customers. Subcontracting to these specialized firms allows you to tap into a network of copywriters, social media strategists, and professionals that can place your business in the likes of Techcrunch, Forbes, or Entrepreneur Magazine.
What’s more, an effective PR firm can help you allocate your marketing budget most efficiently. Should you invest in Facebook advertising, blog writing, email sales campaigns, or all of the above? Subcontracting to a firm that specializes in these areas can help you strategize and measure the ROI of your marketing dollars. This way you know that each dollar you spend yields you more in terms of revenues or profits.
Of course, these aren’t the only three areas that can be outsourced. Administrative support, sales staffs, and computer programming can also be subcontracted, among others. However, the outsourcing process becomes much more complicated when you rely on outside vendors to build your technology product or interface directly with your customers.
To help, start by outsourcing slowly. All businesses should have legal counsel, a go-to-market marketing plan, and accounting / CFO services from the onset. This will help devise an effective business strategy, structure an efficient company, implement your business goals. Then, when it’s time to increase your subcontracting efforts, you’ll already have a team of highly qualified individuals to help you make your hiring needs.