Leveraging the capability of a small in-house team oftentimes requires employees to undertake tasks they don’t necessarily have expertise in. While this allows entrepreneurs and small business owners to save a bit of money, oftentimes, it can be more beneficial to outsource critical jobs or tasks to experts instead of doing it in-house.
Outsourcing has become a common feature of modern businesses, allowing employees and entrepreneurs to focus on more important operational efforts, while leaving other jobs to experts that can focus on one project at a time.
While not all businesses have the bandwidth to take on every task that requires the business to function properly, especially for newer and younger startups, finding suitable candidates to outsource to can help increase overall team productivity and company output, and help raise bottom-line performance.
Why Outsource Tasks As An Entrepreneur?
There are countless reasons why entrepreneurs, or in this case, small business owners, should consider outsourcing specific and highly-orientated jobs to third-party professionals.
Here are some of the basic benefits of outsourcing tasks as an entrepreneur:
Saving On Operational Costs
Research shows that a business can save roughly 30% on its overall operating costs when outsourcing tasks. This is because there is a decreased need for in-house employees, and some jobs can now be completed by outside professionals, either within the locale of the business or in lower-cost countries.
Increased Flexibility
Entrepreneurs have more flexibility in their schedules, which allows them more time to focus on important business features and improved systems.
Frees Up Employee Productivity
Instead of having several employees juggle different jobs all at once, outsourcing some tasks ensures that in-house employees now have more time to complete the jobs they were hired for, and gives them a better opportunity to increase their productivity output.
Outsourced Work Is Completed By Professionals
Some parts of the business may require assistance from professionals who can do delicate projects independently while maintaining a contractual agreement with the company. This means that niche jobs that aren’t within the scope of the business will be completed by professionals who are well-equipped and acquainted in their field.
Outsourcing Can Save The Business Money
In some instances, it’s been found that outsourcing manufacturing and production of goods can help save the business up to 20%. Furthermore, when outsourcing research and development, entrepreneurs and business owners can lower their expenses by up to 22%.
Helps Scale Business Workforce
Newly established businesses can quickly scale their workforce by outsourcing critical jobs to experts from outside their scope of practice. This gives them more opportunity to focus on developing critical business strategies that can help grow organizational prospects while delivering on their productivity output.
Delicate Valuable Resources
Having third-party freelancers or contract workers complete certain tasks, ensures that new business owners can dedicate valuable resources among in-house employees. This includes time and effort spent hiring new staff, training programs, and in-house resources available to in-house employees.
What Tasks Can Entrepreneurs Outsource?
Outsourcing can range from hiring a freelancer to employing a contract worker outside of the business. This ensures that entrepreneurs can access a larger pool of talent that is not directly available when acquiring new employees for the business.
Entrepreneurs can consider outsourcing some of the following tasks as they scale up their business during its primary development phase.
General Administration
Completing office-related administration such as responding to emails, following up with customer queries, or even running several social media accounts requires entrepreneurs to spend several hours per day to complete these tasks.
In fact, some research showed that entrepreneurs and business owners that work an average of 50 hours per week, spend roughly 31% strategically growing their businesses. The remaining 68% is used to complete daily problems and tasks.
Financial Services
According to U.S. Bank, nearly 82% of small businesses end up failing due to a lack of cash flow and financial problems. While outsourcing some tasks won’t help increase cash flow for the business, hiring a third-party employee to manage accounting and bookkeeping tasks can however ensure that available funds are being used appropriately.
Keeping track of expenses and general bookkeeping is not only a time-consuming job, but it generally requires entrepreneurs to know to set up a budget, manage their finances, control expenses, and understand the basic ins and outs of taxation.
By outsourcing these tasks, business owners can save time but also get a better hand on their accounting management efforts, which is a critical facet of any growing business.
Notarization
During the early years of any small business, entrepreneurs can’t hire an in-house notary. Nowadays, freelancers and agencies have trained professionals that can help with notary services, which ensures entrepreneurs are not required to sacrifice the legal security of their businesses.
Aside from hiring a third-party professional, there are also online notary services that can offer entrepreneurs more flexibility and convenience, while having all their notarization within one ecosystem.
Social Media Planning And Marketing
Running several social media accounts, while promoting a business online has become more complex than what it was several years ago. Nowadays, social media trends and search engine analytics change seemingly every day, and entrepreneurs are required to keep up with all these changing trends as they develop throughout the years.
Instead of spending countless hours developing social media and marketing strategies that will target the right audience of clients. Outsourcing these tasks to younger and more tech-savvy freelancers ensures that the business will get the exposure it needs. Many young professionals in this area are constantly following new trends, and are well-versed in what consumers are looking for when browsing the internet.
Information Technology
Setting up, operating, and managing in-house IT services requires a lot of expertise and also a lot of time. Not having the right systems up and running can be a massive headwind for any small business that is looking to increase its business operations.
Using outsourced IT services or professionals means that entrepreneurs can install and maintain these systems remotely. On top of this, the business has a team of experts that can quickly and efficiently fix any digital issues in case something goes wrong.
Human Resources
Around 44% of new business owners spend roughly 30 hours per new employee according to research by The Kansas City Business Journal. What’s more, secondary research indicates that around 90% of entrepreneurs and small business owners are directly involved in the process of hiring new employees.
Sourcing, interviewing, and training new employees can take between one and two months, often stretching beyond. On top of this, there is federal and state worker legislation that employers are required to understand when hiring new staff.
Looking at the facts shows how important it can be for entrepreneurs to outsource their HR needs to trained professionals, that not only helps with the recruitment process but ensures the business follows the necessary federal and state employment procedures.
Sales Administration
Having a clear sales funnel or procedure can help businesses increase their productivity, but also help lift their bottom line. Although having access to the right pre-sales information, and post-sales customer support requires a team of experts that can compile this information for entrepreneurs.
Relying on old and outdated models or strategies will not only hurt a business in the near term, but it could slow down the delivery of predetermined goals and lack the fundamental structures that can help build and increase client retention, and customer service delivery expectations.
Payroll Services
Outsourcing payroll services to third-party professionals is nothing new, and in some instances, small business owners use digital software to control and monitor their payroll processing.
Although there are several digital platforms available to entrepreneurs that can help them manage their payroll services, outsourcing this job ensures that the business stays in line with employment regulations and that businesses are not required to rely on expensive payroll technology.
Shipping and Logistics
For businesses that sell and ship products, handling this yourself can be a tedious task, especially if products need to be sent across the country, or even further across the world.
Using an agency that primarily focuses on shipping, transportation, and logistics of goods ensures that a business will have its products delivered on time to its clients.
On top of this, building a relationship with these agencies can help entrepreneurs in the long term, and as their business grows, third-party logistic agencies can become a valuable asset to any business as eCommerce and online shopping continues to grow.
Design
Putting together designs for the business, whether it’s for labels, packaging, or even social media content requires a bit of creative experience and a lot of time behind design programs.
For busy entrepreneurs, who have the vision, but not necessarily the time, talent, or expertise to make these designs come to life, hiring a freelance graphic designer ensures that design work can easily be outsourced to a professional that can put together captivating content for the business.
There are a lot of graphic designers available to work, and for small businesses that do not have a large budget for design, there are also some helpful programs available online that they can use for free.
It is however in the best interest of the business to rather look to hire a professional graphic designer that can develop designs that correlate closely with the brand of the business and use the right aesthetic elements that will capture the audience’s attention.
Final Thoughts On Outsourcing Tasks
When outsourcing tasks to another person or third-party agency, have a clear idea of what you are looking for, and where you can find the right people for the job.
Don’t be scared to ask important questions, and make sure that you hire the right people that can provide you with samples of their previous work, or a portfolio of clients that they have worked with in the past.
Make an effort of it to look for professionals that align their values and work ethics with that of your business, as it’s usually easier to foster a relationship with professionals that share the same interest as your business.
Finally, when outsourcing to a freelancer, take the time t get to know them a bit better and communicate your needs properly. Furthermore, have an agreement set up that can help protect you from any legal action, your personal and company information, and that of your clients.
The more you begin to look around for individuals that can get the work done instead of hiring new full-time employees or having current staff deal with increased workloads, the easier it will be for you as an entrepreneur to leverage your time and resources to scale up your business.
London-based fintech startup Kennek has raised $12.5 million in seed funding to expand its lending operating system.
According to an Oct. 10 tech.eu report, the round was led by HV Capital and included participation from Dutch Founders Fund, AlbionVC, FFVC, Plug & Play Ventures, and Syndicate One. Kennek offers software-as-a-service tools to help non-bank lenders streamline their operations using open banking, open finance, and payments.
The platform aims to automate time-consuming manual tasks and consolidate fragmented data to simplify lending. Xavier De Pauw, founder of Kennek said:
“Until kennek, lenders had to devote countless hours to menial operational tasks and deal with jumbled and hard-coded data – which makes every other part of lending a headache. As former lenders ourselves, we lived and breathed these frustrations, and built kennek to make them a thing of the past.”
The company said the latest funding round was oversubscribed and closed quickly despite the challenging fundraising environment. The new capital will be used to expand Kennek’s engineering team and strengthen its market position in the UK while exploring expansion into other European markets. Barbod Namini, Partner at lead investor HV Capital, commented on the investment:
“Kennek has developed an ambitious and genuinely unique proposition which we think can be the foundation of the entire alternative lending space. […] It is a complicated market and a solution that brings together all information and stakeholders onto a single platform is highly compelling for both lenders & the ecosystem as a whole.”
The fintech lending space has grown rapidly in recent years, but many lenders still rely on legacy systems and manual processes that limit efficiency and scalability. Kennek aims to leverage open banking and data integration to provide lenders with a more streamlined, automated lending experience.
The seed funding will allow the London-based startup to continue developing its platform and expanding its team to meet demand from non-bank lenders looking to digitize operations. Kennek’s focus on the UK and Europe also comes amid rising adoption of open banking and open finance in the regions.
Featured Image Credit: Photo from Kennek.io; Thank you!
Radek Zielinski
Radek Zielinski is an experienced technology and financial journalist with a passion for cybersecurity and futurology.
As excitement around generative AI grows, Fortune 500 companies, including Goldman Sachs, are carefully examining the possible applications of this technology. A recent survey of U.S. executives indicated that 60% believe generative AI will substantially impact their businesses in the long term. However, they anticipate a one to two-year timeframe before implementing their initial solutions. This optimism stems from the potential of generative AI to revolutionize various aspects of businesses, from enhancing customer experiences to optimizing internal processes. In the short term, companies will likely focus on pilot projects and experimentation, gradually integrating generative AI into their operations as they witness its positive influence on efficiency and profitability.
Goldman Sachs’ Cautious Approach to Implementing Generative AI
In a recent interview, Goldman Sachs CIO Marco Argenti revealed that the firm has not yet implemented any generative AI use cases. Instead, the company focuses on experimentation and setting high standards before adopting the technology. Argenti recognized the desire for outcomes in areas like developer and operational efficiency but emphasized ensuring precision before putting experimental AI use cases into production.
According to Argenti, striking the right balance between driving innovation and maintaining accuracy is crucial for successfully integrating generative AI within the firm. Goldman Sachs intends to continue exploring this emerging technology’s potential benefits and applications while diligently assessing risks to ensure it meets the company’s stringent quality standards.
One possible application for Goldman Sachs is in software development, where the company has observed a 20-40% productivity increase during its trials. The goal is for 1,000 developers to utilize generative AI tools by year’s end. However, Argenti emphasized that a well-defined expectation of return on investment is necessary before fully integrating generative AI into production.
To achieve this, the company plans to implement a systematic and strategic approach to adopting generative AI, ensuring that it complements and enhances the skills of its developers. Additionally, Goldman Sachs intends to evaluate the long-term impact of generative AI on their software development processes and the overall quality of the applications being developed.
Goldman Sachs’ approach to AI implementation goes beyond merely executing models. The firm has created a platform encompassing technical, legal, and compliance assessments to filter out improper content and keep track of all interactions. This comprehensive system ensures seamless integration of artificial intelligence in operations while adhering to regulatory standards and maintaining client confidentiality. Moreover, the platform continuously improves and adapts its algorithms, allowing Goldman Sachs to stay at the forefront of technology and offer its clients the most efficient and secure services.
Featured Image Credit: Photo by Google DeepMind; Pexels; Thank you!
Deanna Ritchie
Managing Editor at ReadWrite
Deanna is the Managing Editor at ReadWrite. Previously she worked as the Editor in Chief for Startup Grind and has over 20+ years of experience in content management and content development.
As Web3 companies increasingly consider leaving the United States due to regulatory ambiguity, the United Kingdom must simplify its cryptocurrency regulations to attract these businesses. The conservative think tank Policy Exchange recently released a report detailing ten suggestions for improving Web3 regulation in the country. Among the recommendations are reducing liability for token holders in decentralized autonomous organizations (DAOs) and encouraging the Financial Conduct Authority (FCA) to adopt alternative Know Your Customer (KYC) methodologies, such as digital identities and blockchain analytics tools. These suggestions aim to position the UK as a hub for Web3 innovation and attract blockchain-based businesses looking for a more conducive regulatory environment.
Streamlining Cryptocurrency Regulations for Innovation
To make it easier for emerging Web3 companies to navigate existing legal frameworks and contribute to the UK’s digital economy growth, the government must streamline cryptocurrency regulations and adopt forward-looking approaches. By making the regulatory landscape clear and straightforward, the UK can create an environment that fosters innovation, growth, and competitiveness in the global fintech industry.
The Policy Exchange report also recommends not weakening self-hosted wallets or treating proof-of-stake (PoS) services as financial services. This approach aims to protect the fundamental principles of decentralization and user autonomy while strongly emphasizing security and regulatory compliance. By doing so, the UK can nurture an environment that encourages innovation and the continued growth of blockchain technology.
Despite recent strict measures by UK authorities, such as His Majesty’s Treasury and the FCA, toward the digital assets sector, the proposed changes in the Policy Exchange report strive to make the UK a more attractive location for Web3 enterprises. By adopting these suggestions, the UK can demonstrate its commitment to fostering innovation in the rapidly evolving blockchain and cryptocurrency industries while ensuring a robust and transparent regulatory environment.
The ongoing uncertainty surrounding cryptocurrency regulations in various countries has prompted Web3 companies to explore alternative jurisdictions with more precise legal frameworks. As the United States grapples with regulatory ambiguity, the United Kingdom can position itself as a hub for Web3 innovation by simplifying and streamlining its cryptocurrency regulations.
Featured Image Credit: Photo by Jonathan Borba; Pexels; Thank you!
Deanna Ritchie
Managing Editor at ReadWrite
Deanna is the Managing Editor at ReadWrite. Previously she worked as the Editor in Chief for Startup Grind and has over 20+ years of experience in content management and content development.
