When is the right time for outsourced operations?

Editor’s note: Thanks to Connor Gillivan of EcomBalance and Outsource School for the following guest post.

While the earning potential of e-commerce is unquestionably good, running an online store isn’t as easy as it looks. When businesses need help, many entrepreneurs turn to outsourced operations. Help from the gig economy is usually easier and more cost-efficient than full-time staff.

The idea of outsourcing is exciting, especially for a startup just beginning to feel the need for it. If you’re reading this, you’ve probably considered outsourcing too. But when is the right time?

Tasks for outsourced operations

Before we begin discussing whether you should or shouldn’t outsource, let’s take a look at the common tasks e-commerce sellers hire others to do.

The best tasks to outsource are mundane yet time-consuming, such as the following:

• Inventory management
• Customer service
• Order fulfillment
• Product listing optimization

Often, outsourced operations require a level of professional expertise. These tasks may also be outsourced to freelancers, such as

• Graphic design
• Social media
• SEO
• PPC
• Blogging

If you don’t have the time but do have the budget to spare on outsourced operations, you’ll be doing your business a huge favor by having freelancers perform these functions for you.

Should you outsource?

It should be noted that outsourcing isn’t as simple as delegating tasks to a freelancer. Besides the cost involved, managing freelancers is an ongoing responsibility. You have to be prepared for training and supporting them, and ready to let go of the reins somewhat to do things differently than you’re used to.

The following situations are good indications that your business is ready for outsourcing:

1. The business is growing faster than you expected

Business growth is a nice problem to have. The problem with rapid growth, however, is that it may be too fast for you to keep up.

Becoming an online sensation overnight is not a far-fetched possibility. Should this happen, you need to have immediate expansion plans in place to accommodate every new customer and business that will come your way.

Outsourcing is perfect when experiencing growth because you’re going to need help maintaining the business’s daily operations while you focus on higher-value tasks.

With enough money to pay freelancers and the risk of a sudden surge in business, outsourcing makes perfect sense. Is it worth getting overwhelmed and losing clients in the process? Rapid growth is one of those times to “strike while the iron is hot.”

2. You’re ready to expand but not ready to hire employees

Nothing is more exciting than seeing your business start to pick up. But reaching the next level doesn’t necessarily mean that you are ready to hire employees. With full-time and even part-time staff, your business may become responsible for office space, health care, salaries, and other regular expenses.

In this situation, freelance help is a more logical move. Freelancers do not incur the same kind of expenses as employees. They have their own work spaces, equipment, and internet connections, for starters. You also don’t have to pay any government-mandated benefits. Paying for freelance hours versus full-time also works to your advantage because you won’t pay for idle time.

3. You need to cultivate a better customer service experience

Customer interaction may seem easy to handle at first. But as your client base grows, that personal touch becomes more difficult to maintain.

When it’s hard to give customers the attention they need because there’s too many of them, outsourcing can help. By hiring freelancers to take care of your customer service needs, you’ll be able to focus on more important tasks while leaving your customers in good hands.

You can even find freelancers with extensive prior customer service experience from call centers and other customer-facing roles, which makes them more than qualified to handle customer requests and inquiries.

In addition, by taking advantage of virtual help in other time zones, you may be able to support customers around the clock.

Any reasons not to outsource?

As promising and affordable as outsourcing can be, it’s also not for everyone. The following situations may be glaring reminders that your business is not ready for outsourcing just yet:

1. You have an unstable budget

Budget is key when it comes to outsourcing. When you’re looking to a third party to handle a portion of your business, having limited or unstable funds just won’t cut it.

You may want to reserve your budget for more important aspects of the business rather than for outsourced help. Handle matters in-house until you’ve accrued the capital you need to expand the business.

Of course, hiring freelancers allows for great flexibility so that you can scale that expansion easily and quickly.

2. You need specialized knowledge

You may also want to pass on outsourcing if your business requires specialized or highly-specific knowledge. When niche expertise is necessary, you may not easily find someone more suitable to address needs than yourself. Don’t settle unless you find the perfect fit. Keep tasks on your own plate until you do.

Creating and delegating Standard Operating Procedures

Given the benefits outsourcing has to offer, e-commerce sellers prefer this path when circumstances permit. But if you’re not ready yet, begin documenting your business’s standard operating procedures (SOP) early. Documented and organized SOPs will help make the transition smoother once you’ve begun to outsource.

Clear SOPs save you time explaining the ins and outs of daily operations and will make the onboarding process easier. You won’t need to engage hires in multiple long discussions since they can always refer to these SOPs whenever they’re in doubt.

Final thoughts

Strong leaders are open and receptive to change. Even if your business isn’t growing now, you don’t want to miss out on opportunities when growth comes.

Outsourcing is an effective way to get more things done. By hiring talented individuals with varying expertise, your business may attract more clients and earn higher revenue.

Choosing to outsource is a critical decision that requires proper planning. Do it correctly, and your business will rise to the next level. Do it incorrectly, and you’ll lose more money than you thought you’d be able to save.

Use the pointers we discussed here, gauge if your business is ready for outsourced operations, and save yourself from the consequences of bad hiring decisions.

Connor Gillivan is the CMO and owner of EcomBalance and Outsource School. He has 10+ years of experience as an entrepreneur, is an active investor, and writes on his personal blog, ConnorGillivan.com. He lives in Denver, Colorado.

Originally published at The PickFu blog.