Small businesses cringe at the concept of outsourcing. Generally speaking, entrepreneurs like having control and autonomy, and the thought of outsourcing anything can make them uncomfortable.
Unfortunately, this type-A preference can really stall growth when it comes to expanding to new markets.
Taking a small business global is a complex and dynamic process. Gaining a deep understanding of the targeted markets, the competition, current local market trends, and the requirements to successfully launch and drive growth is an important piece of the foundation.
For these reasons, outsourcing should be held in high regard as something that not only creates jobs, but can also enable companies to operate more efficiently, and at a lower cost. Growing companies can ramp up faster through an effective arrangement with outside consultants and vendors.
Outsourcing has gotten a bad reputation since it became synonymous with the concept of sending services to low-cost countries. It’s time outsourcing stopped being looked at as a dirty word.
Brings familiarity to the unfamiliar
Global companies benefit from a geographically diverse business portfolio that provides a natural barrier against the volatility of local growth and country and currency risks. But pursuing so many new-market opportunities takes global companies deep into areas of unfamiliarity they may find difficult to evaluate.
Effectively outsourcing your risk-management infrastructure helps support the global scale and diversity of your operations.
It lowers the barrier of bureaucracy
Legal outsourcing isn’t just a means to lower this cost; some countries are known for being highly litigious, so it’s critical that strong legal processes are put into place to minimize unnecessary commercial risks.
Also, government agencies have strict requirements that necessitate certain legal documentation prior to operating within the country. And a proper tax and finance infrastructure needs to be set up early on to ensure that you are receiving timely reporting, and that your foreign entity is adhering to local corporate policies and procedures.
By outsourcing these legal tasks, overall time involved in the filling process decreases and you’re presented with major strategic advantages.
It keeps you local
The ability to have resources – who understand the technology, market, sales channels, and customer contacts – readily available can be the key to the speed and success of a sales expansion effort. Quickly building sales pipeline, closing deals, and securing customer references are key to establishing an early presence in any market.
Language barriers and time zones can also be difficult to deal with. Additionally, not meeting with vendors periodically can make them feel isolated, often leading to more difficult – and costly – relationships. Outsourcing parts of your sales channel allows you (or, namely, a representative on your behalf) to balance out any cultural and distance issues.
It positively impacts your bottom line
Operating a global business requires a unique understanding of local culture and business practices. Keeping up with payroll changes, financial reporting, and the like in markets they are unfamiliar with only heightens additional burdens placed on the original office manager.
Using outsourced managed services not only alleviates most of the pressure and stress of expanding into foreign markets, but it also boosts productivity and gives the company a much improved ROI.
It provides access to higher-quality talent at a lower cost
When expanding into new markets, you may need outside help to undertake projects that don’t warrant a full-time employee.
Many entrepreneurs struggle to find highly qualified, budget-friendly team members. This is especially true if you do business in a major market where the cost of highly-skilled labor can be pricey.
Match talented consultants to your specific needs instead of hiring generalist full-time employees. To get started, identify low risk, high-reward functions to outsource.
It keeps you lean
Outsourcing corporate services prevents your company from growing heavy with services or divisions that might not fit with the company’s strategy two years later. When you move into a new market, make an acquisition, or take another step blanketed in unpredictability, you want to be as prepared as possible while remaining flexible.
Working with a corporate services partner with local expertise and a worldwide network permits exactly that – without you having to re-invent the wheel and lose momentum. Additionally, said worldwide network affords you the opportunity to work with one supplier that covers multiple countries. This relieves the pain of managing multiple companies with various standards of work.
Plenty of people don’t like the ‘O’ word, but there are particular times when outsourcing is completely necessary and even positive. Figuring out how to grow your business with help from outside professionals can offer increased efficiencies and economies of scale.
Request your complimentary 30 minute call with TMF Group global expansion experts to discuss your outsourcing need in any of the 80+ countries where TMF Group operates.