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Becoming a Business Tycoon: Four Benefits of Outsourcing for Startups

The technological advancement the world is experiencing now has brought globalization within reach. Companies are competing at a global scale. The world is getting smaller and the stakes are getting higher. But as the competition gets tighter, the resources needed to keep up are also becoming easier to access.

According to a recent study, 30% of businesses in the UK plan to outsource more by 2022. And for startup entrepreneurs, knowing the benefits of outsourcing as early as possible is vital to success. Outsourcing is the business practice of creating contractual relationships with outside parties. Common examples of these contractual partnerships include IT, marketing, manufacturing, and legal services. It’s becoming a popular way for businesses to reduce costs and improve efficiency.

Here are four ways outsourcing can benefit your startup business:


The most common and obvious reason businesses lean on outsourcing is to save money. Countries with developing economies usually offer mutually beneficial industry alliances. With cheaper labor costs, business owners get to reduce spending. And on the employees’ perspective, working in the outsourcing industry provides a more sustainable income.

For startups, expanding your operations internally can be quite expensive. Having to worry about rent, power, and heating can be too consuming. Choosing to hire services externally rids you of these concerns. Even the smallest amount saved through avoiding the typical monthly office expenses can help your company’s financial stability.


Outsourcing freelancers doesn’t only give small companies the luxury of not having to pay for insurance, leave, and other financial privileges but also benefits them by having a specific skill-targeted labor pool.

Hiring locally often means having fewer choices. Imagine having the whole world as your scope in hiring personnel. The Philippines is known for being a hub for BPO experts with neutral English accents and 24/7 availability. Having outperformed their American counterparts by 11% on math and logic, India has software development in the bag. And when it comes to manufacturing and production, China is the top dog.

Offshoring recruitment leads to gaining access to a larger pool of experts around the world. And having experts work in different sectors of your business means having a thinner margin of error.

This also applies to the more technical departments in your company. Subcontracting legal and financial aids is an investment that doesn’t need time for its value to show. Linklaters for legal representations, Grant Thorton for accounting and financial advice, and Lovell Consulting for capital allowance services are just some of the many specialized firms you can count on to make sure your business thrives.


Besides money and effort, time is one of the most important factors to consider when starting a business. You can’t have your business consuming 24 hours of your life. Even the most successful businessmen understand that doing everything on their own is counter-productive.

Maximize outsourcing by staying focused on the bigger picture. Customer service is a crucial part of any business. However, not everyone can handle market engagement that well. For some, customer service is draining and time-consuming. By subcontracting for this task, you are allowing yourself and your team time to focus on what your main responsibility should really be about.

The time zone differential between your country and the common countries ideal for outsourcing also provides an advantage. Having an outsourced workforce take the reins while your internal team hit the sack can give your business 24 hour-operation a day. This gives you the ability to work on projects faster.


Outsourcing gives you certain flexibility in your recruitment. Hiring tenured freelancers for seasonal projects is a wiser move compared to recruiting people and training them for projects that would only last for a couple of months. This provides a more cyclical approach for different operation demands. Through outsourcing, you can hire people when necessary and control their tenure in your company with time restrictions in the contracts.

This kind of staffing flexibility is beneficial for your company’s growth. If things go south, outsourcing companies provide the luxury of being released more conveniently than firing your internal staff. And as the business gets better and upscaling becomes foreseeable, you will also be able to easily acquire staff more suitable to the pace of your growth.

Outsourcing is commonly just used as a tool for reducing costs. But if properly utilized, it can be used for innovating and upscaling your business. With this in mind, it’s still a very important process that should not be taken lightly. Outsource for ideas by discussing your options with the people you trust the most. Be cautious with your decisions but do not be afraid to take risks. At the end of the day, your business can only go as far as you let it.

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