Can I Build a Business by Outsourcing Everything?

Introduction

Outsourcing business processes is the practice of delegating to a third party (a business service provider) different tasks or providing services on behalf of the hiring company. 

The business service provider is in charge of recruiting and training the employees and pays for their salaries. Outsourced employees can work at the hiring company’s premises or remote locations. Nowadays, most outsourced services are done remotely, as the service providers usually count on a large list of staff distributed in diverse countries. This ensures round-the-clock operations, multilingual services, and lower costs. 

For some time, there’s been a big debate: is it convenient for a business to outsource everything? Can you build a business outsourcing everything from daily routine tasks to decision-making or leading roles? There’s no black and white. 

It’s a fact that most businesses usually don’t outsource high-stake roles right from the beginning. Effectively doing so depends on the stage of the company, its size, and timing (when is the right time to delegate a high-stakes position?). 

Today, we’ll take a look at the different aspects companies need to look for when making the decision of which functions to outsource and which ones not. As real cases have demonstrated, outsourcing even the highest roles, provided you follow an escalating, phased strategy, is possible and even advisable.

Outsourcing a Business

Let’s start with the basic question: Why does outsourcing help businesses thrive? What’s the power of outsourcing? Outsourcing a business can significantly reduce costs, improve efficiency, and provide access to specialized talent. 

Outsourcing lets small businesses grow and enables big companies to expand further, locally and globally. However, outsourcing everything from day one is not a sustainable strategy. High-stakes roles such as executive leadership, financial oversight, and strategic decision-making require internal control, particularly in the early stages of a company.

Yet, as businesses grow and develop governance structures and security protocols, even leadership roles can be outsourced to the right partners. As companies work with their outsourced team, they build trust and recognize leadership. The key is to build an outsourcing strategy that aligns with business goals while maintaining control over critical functions.

Although we’ll overview the different aspects or business outsourcing, following you’ll find a guide by the US. Chamber of Commerce on How to Outsource Everything: A Guide for Overwhelmed Small Business Owners.

Outsourcing Critical Roles: Some Considerations

Theoretically, practically every function in a modern company can be outsourced. Yet, at this stage of outsourcing expansion, some roles are still managed internally. Why?

• Owners and stakeholders want to preserve company culture
• They want to fully protect key intellectual property
• They want to keep a direct oversight on the core mission and vision of the business
• Their highest leaders or directors have become a part of the brand’s identity themselves.

Examples of roles that are not often outsourced include:

• CEO, founder, and core leadership. They drive culture, vision, and strategy
• Key decision makers. They determine the business’s direction and handle the most confidential data. 
• Quality control. In some industries, such as healthcare, quality control is better kept close to the leadership team. 

You Can Outsource Everything, But Not Right Away

Many startups have faced challenges when attempting to outsource high-stakes roles too early. For example, Boeing’s outsourcing of the 787 Dreamliner manufacturing process resulted in delays and cost overruns due to misaligned external partners. (Business Insider)

Similarly, Qantas’ attempt to outsource 1,683 employees led to legal battles and financial penalties after a court ruled that the airline had acted unlawfully. (The Australian)

These examples highlight the risks of outsourcing without strong oversight. In its place, businesses should first focus on outsourcing support and operational roles while keeping strategic decision-making in-house.

Gradual Expansion of Outsourcing Roles

As companies refine their outsourcing strategy, they can gradually shift leadership responsibilities to external professionals. Fractional executives—experienced leaders who work part-time—are an incipient solution that permits businesses to access executive know-how without a full-time commitment.

It’s possible and actually a strategic advantage for small to medium-sized businesses to outsource from repetitive administrative tasks or call center services to leadership roles. Yet, it needs to be done gradually. The simple secret to succeed in entirely outsourcing a business is following a step-by-step approach. 

Some advantages of this outsourcing strategy include: 

• Quick access to experienced executives in different areas: Fractional executives take the same roles and strategic responsibilities as full-time executives but on a part-time basis. 
• Cost efficiency: Think of a small business in need of a vice president (VP) or sales leader. Hiring for these roles that bring significant revenue increases full-time and on-site can be financially prohibitive (particularly for startups or small companies). 

By outsourcing leading or management roles, companies can have top-tier leadership at a fraction of the cost. Moreover, as business service providers usually hire professionals from regions where labor costs are lower, this will reflect in the hourly, weekly, or monthly fee the outsourcing company will charge. With Virtudesk, you can easily verify that by checking our pricing page. 

If you are interested in reading further about outsourcing sales and leadership roles and learning about some successful case studies, you can follow this link. 

Once businesses establish trust, accountability, and a solid governance structure, outsourcing leadership positions can become a competitive advantage rather than a risk.

A Gradual Approach to Outsourcing a Business: A Step-by-Step Guide

Instead of fully outsourcing from day one, businesses should focus on a phased approach. Let’s overview the recommended steps: 

1. Non-core tasks first. Identify non-core, repetitive, or specialized tasks. Make a list of your daily, weekly, and monthly needs. Think of customer support, IT, marketing, bookkeeping, and administrative work.

2. Prioritize tasks. Determine the ones that take more time or where you and your team have a lack of expertise or insufficient resources, and outsource those first. 

3. Evaluate the workload. Even if you can manage a particular task, is it financially wise to have your in-house team spend so much time on it instead of dedicating to higher-value ones?

4. Choose your business service provider wisely. Larger companies will most likely provide you with countless specialized services (call center services, HR, and IT, among many). It is important that you evaluate the different services they provide when thinking about expanding the partnership to include more services. At Virtudesk, we are proud to offer our clients a wide range of services that keeps growing following the requirements of the market. We provide services to numerous industries, and the list keeps growing. 

5. Start small and build trust. Yes, it’s not easy to trust the reputation of your company all of a sudden or feel at ease with a service provider despite their reputation. Start with a pilot project and evaluate their work quality, communication style, and reliability. If the pilot goes well, now you have a basis for a trusting relationship and can start expanding the scope. 

6. Take another step into your outsourcing strategy. Now that you have gained trust and feel comfortable, include more advanced tasks. You can delegate, for example, social media campaigns, higher-level bookkeeping, customer relationship management, or CFO services.   

7. Keep proper documentation. For any role, especially when expanding, have standard operating procedures (SOPs), non-disclosure agreements (NDAs), and clearly defined contracts to protect your business information and set liabilities.

8. Team management. Once your outsourced team has grown enough, outsource team management services to ensure proper communication with the team while supervising their performance and encouraging improvement. 

9. Develop leadership within outsourced teams. Identify high-performing individuals who align with the company goals and work culture.

10. Outsource high-stake roles. Once you have established a trusted relationship and your business operations have become more complex, you can seriously think of outsourcing more specialized or high-stake roles such as: 

• Fractional CFO: A CFO professional who provides financial guidance on a part-time basis.
• CTO or IT leadership: Will oversee your technology strategy if you need advanced tech solutions.
• CMO or advanced marketing lead: Can develop multichannel marketing campaigns for scaling businesses 

When outsourcing executive roles, you need to implement security and governance frameworks to ensure control over high-stakes decisions. In most cases, even if you outsource an executive position, you’ll want to keep control over strategic decisions.

Additionally, you’ll want to ensure that your business outsourcing strategy grants that your newly outsourced roles align with your vision, culture, and long-term strategy.

This method allows businesses to scale efficiently while retaining control over critical operations.

Final Thoughts on Outsourcing a Business

Building a business through outsourcing is possible, but it cannot be randomly done; it requires a phased approach. High-stakes roles should remain in-house initially, but with a well-defined outsourcing strategy, businesses can eventually delegate leadership tasks as well. 

By balancing security, governance, and strategic planning, business outsourcing can drive long-term success.

If you plan to outsource most or all of your business activities but still have doubts about how to start, or you are already outsourcing some tasks but would like to move further, Virtudesk is here for you. At Virtudesk, we will evaluate your current outsourcing situation, craft with you a customized plan from scratch if you want to build a business by outsourcing everything or just want to outsource some of your tasks. 

Share your goals with us, and we’ll work hand in hand to provide you with the best outsourcing solution. Simply call us at +1 (800) 470-8136 or schedule a free discovery call, and any of our knowledgeable representatives at Virtudesk will be delighted to help you clarify your doubts and start planning for success!