14- Outsource Whatever You Can: Do Not Make Your Business Needlessly Large and Crowded

Outsource Whatever You Can: Do Not Make Your Business Needlessly Large and Crowded!

Rather than defining outsourcing, let me convey its meaning through examples.

Example 1: in a construction project, a builder may use contractors for different parts of the project, including architecture, structural work, electrical work, soil consulting, reinforcement, elevators and so on, to design and construct a building.

Example 2: a grocery store uses Snapp Box to deliver customers' purchases.

Example 3: a company obtains employees' lunches from a catering business.

All the examples above are instances of outsourcing.

Advantages of outsourcing:

A- Less capital is needed to start or expand the business.

B- If done correctly, the output will be of higher quality than if you perform the work on a small, makeshift scale within your business.

C- In most cases, the cost of outsourcing work is lower than the cost of doing it internally.

D- You have the opportunity to focus on your core expertise and strengthen it.

E- Your business becomes more agile.

Generally, the larger a business is, the slower and less flexible it becomes in responding to changes in the business environment.

F- If you manage outsourcing properly and have at least two suppliers for every outsourced activity, many business risks will also decrease. For example, if you have one machine inside your business to perform a task and it breaks down, delivery of the customer's order may be disrupted. If you have several suppliers for that task, however, you can give it to the second supplier when the first encounters a problem.

G- And so on...

Disadvantages of outsourcing:

If outsourcing is not done correctly, almost all the advantages listed above turn into disadvantages and problems.

I will explain proper outsourcing in another article.

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