April 16, 2024
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Everest Business Funding Reveals the Benefits and Risks of Outsourcing Business Functions

Everest Business Funding
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Insourcing versus outsourcing: what difference does it make? Budget specialists at Everest Business Funding, a revenue-based financing firm, say it is a big one regarding cost productivity and business function efficiency. When deciding whether or not to take advantage of outsourcing or keep operations in-house, business owners should evaluate not only the needs of a business but also the benefits and risks of outsourcing to determine which options best support a business’ overall needs. 

What is Outsourcing?

When a company hires a person to work within an organization’s operational infrastructure or is a working employee of the business who is assigned tasks, that person is considered an in-house resource, and the practice is considered insourcing business needs. 

Outsourcing is the opposite of insourcing. Rather than utilizing working employees, the practice of outsourcing involves hiring outside resources to meet the needs of a business or its necessary operational tasks. Hiring freelancers to create blog content, accounting agencies to manage finances, or call centers to cover customer service are all examples of outsourcing business functions.

There are pros and cons to both insourcing and outsourcing. Determining which option to choose per project or business function dwindles down to understanding the benefits and risks and aligning the final choice to what a business needs most.

Benefits of Outsourcing

Hiring a new employee can be a large expense for a business on a tight budget. One of the biggest benefits of outsourcing is hiring a contractor who specializes in what a business requires to execute projects or business functions. This option can eliminate long-term financial commitments, avoiding adding another employee that costs a salary and benefits in addition to training. Choosing to outsource contract workers is an excellent choice for small businesses that need short-term hires and cannot provide funds for a new in-house worker. 

When finding the right contract worker, the labor pool is much larger, with more options to find the right expert for what can best boost a business. When no employee training is necessary, time and funds are saved, and a quicker result is produced, which is excellent for keeping on point with project deadlines. Common processes and functions that companies outsource include accounting, social media, manufacturing, customer service, engineering, human resource management, content writing, information technology (IT) operations, and more. 

Risks of Outsourcing

Though outsourcing has its multiple benefits, it also has notable risks businesses should become familiar with before making a final decision to hire outside help. First, even though instructions and guidance are typically given from a company to a contract worker, a company hands over more control to a contract worker when outsourcing compared to insourcing. Insourcing grants complete management and control of a task or project because it is done in-house under a business’ immediate operations. 

Communication issues are another downside to outsourcing. Outsourcing a service or freelancer that lives in a different time zone, has poor internet, lacks confidentiality or data security, or is delayed in response time are all factors that can contribute to communication issues between the hiring company and hired contract worker.  

About Everest Business Funding

Everest Business Funding provides revenue-based funding to small business owners. They serve a diverse pool of businesses, from healthcare to retail, to help them obtain working capital to grow, buy inventory, launch marketing campaigns, or hire staff. Everest Business Funding’s clients are treated with respect and receive high-quality guidance and service from its professionals.

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