Managing: How to Cut Your Business Costs With Outsourcing

Are you trying to do more with less these days—less money, less time and fewer employees? I think most business owners are in that boat. If you’re looking for ways to decrease the cost of running your business (or cut the costs of starting one), you should be thinking about outsourcing.

Many small business owners think outsourcing is something only huge corporations do, and that it always involves overseas subcontractors. Well, it can—but it’s not just for big businesses. My company has been outsourcing everything from website design to editing to payroll since we first got into business. It’s what’s enabled us to survive and keep operating lean—and we have used everything from neighborhood freelancers to, yep, Indian Web coders. But before you jump into outsourcing, here are a few things you should know.

To get started, determine what you need to get done and what your criteria are for the person or company who will do it. What kinds of experience and skills are needed? What is your price range? Is this a regular gig, or a one-time deal?

Next, consider logistics. Does the company or individual you outsource to need to be close by? Perhaps you need to physically meet with the person from time to time. Or maybe everything can be done online, via phone calls, emails and videoconferencing. Products like Skype and GoToMeeting make this easy and affordable for even the smallest businesses.

Where can you find companies or individuals to outsource to? Referrals from people you know and your social networking contacts are a good starting point. There are also plenty of websites like, and where you can hire people to do everything from website coding to writing ad copy.

Don’t skip this next step: Investigate the person or company as thoroughly as you would any supplier. It’s crucial to make sure they will provide work that’s up to your standards and won’t drop the ball. Ask for references and check them.

Be sure you’ve got a good contract in place and that deliverables, payment terms, deadlines and schedules are clearly spelled out. Also check with your accountant to make sure you’re not running afoul of any laws related to independent contractors (this can leave you open to major IRS fines).

Once you’ve got your outsourcing solutions in place, stay in touch regularly so you’re on top of all projects. Weekly or monthly calls with these vendors can help ensure everyone’s on the same page and that they feel part of the team—which is crucial to keeping them engaged and productive.

Your SCORE mentor can help you assess whether outsourcing is a good solution for your business. Don’t have a mentor? Visit the SCORE website to get matched with a mentor for free advice 24/7.

Rieva Lesonsky
<p> Rieva is CEO of GrowBiz Media, a content and consulting company specializing in covering small businesses and entrepreneurship. She was formerly Editorial Director of Entrepreneur Magazine and has written several books about small business and entrepreneurship. <br /> <a href="" target="_blank" title="GrowBizMedia"></a> | <a href="" target="_blank" title="Rieva on Twitter">@rieva</a> | <a href="" title="blogs by Rieva">More from Rieva</a></p>


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