Running a startup with limited budget can be a stressful experience for entrepreneurs. We see most new businesses fail because of insufficient operating funds. According to CB Insights, running out of cash is the second most common cause of startup failure. Ultimately, the only option left for cash-strapped startups is to consider outsourcing work to cut costs and deal with financial crisis. Hiring remote workers not only saves time and money but also provide startups an access to global talent. At times, outsourcing a fragment of work seems like the next logical step for startups instead of wasting time on opening up another business department.
Entrepreneur India lists out few key areas or services that entrepreneurs should outsource when launching a startup.
Business Compliance Service :
Launching your own business is nothing short of a roller coaster ride. Beginning from assessing the market accurately, formulating a business plan to registering your name and acquiring the right talent, the process can be quite overwhelming.
Archit Gupta, Founder & CEO ClearTax feels for startups, it is best to outsource business compliance services to ensure that a skilled personnel handles the paperwork.
“ When launching the startup, one of the crucial steps is selecting the right business structure. Whether your company is a sole proprietorship, a limited liability partnership, partnership firm or a private limited company, it is easy to get entangled in the documents, compliances and legal formalities. So, an entrepreneur should try to outsource its legal compliance services,” shared Gupta.
Finance and Accounting :
According to Aditya Kumar, Founder & CEO Qbera.com, in very early-stage startups, it is best to evaluate outsourcing of certain activities according to certain factors like: ease of automation, as well as the availability of viable outsourcing alternatives.
“In the case of call-centre functions, outsourcing for repetitive and low-value addition tasks (e.g. calling of dropped off leads) can be extremely efficient as it is possible to easily train call-centre resources, standardize processes, and find alternatives. Other tasks, for example, accounting, also offer plenty of part-time alternatives which are inexpensive, and provide a standardized offering,” said Kumar.
He went on to say that outsourcing functions such as human resources (in particular recruitment and performance appraisals) can be considerably more difficult. Other administrative tasks (such as IT), can often also not be outsourced effectively.
There are various functions early-stage companies can outsource at an early stage. Outsourcing which service depends on the kind of business and the skillset of the founding team. Sagar Yarnalkar , CEO, DailyNinja emphasized that outsourcing Recruitment and Accounting is a must at an early stage, as the founder would like to focus on his business while having to only manage the output from the recruited agencies.
“As a founder you will still be able to take a call on hiring the candidates sourced by the agency, the sourcing should be handled by recruiting agencies. Outsourcing technology is something that should be done only with a Technical Co-founder onboard or a trusted third party which is monitoring the agency, if you are a tech-focused business,” said Yarnalkar.
HR & Admin:
For Manish Khera, Founder and CEO Happy Loans, one of the key areas or services that startups must outsource is HR & Admin, as a good amount of time is spent in looking for the right candidates.
“Since startups are at a high volatile state & require great people, the process of finding the right value can be a time-consuming task. So, it's best to trust a service provider who can look for the right candidate & weed out a lot of tasks around this decision,” said Khera.
Trend in the Market:
Today when we look at the trend in the market we are able to see in big organizations as well as start ups, only a very few of the companies are having there own IT people most of them are outsourced.This goes with recruitments as well.People are using external recruiting agencies for this purpose.One can save a lot of time and it can also not be that expansive if we do a little market survey.