The Coffee Bean & Tea Leaf(CBTL), Business strategy case study
How to afford outsourcing as a small business
1. How to affordHow to afford
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Prepared By:
2. Background on Outsourcing
•Outsourcing is a business practice where you hire outside
contractors to help with a function or project.
•Contractors are not considered employees; they are either
independent freelancers or another business that has been
given a paid contract to deliver a product for set period of
time.
• Outsourcing is not reserved for companies with large
budgets.
2013 IO Marketing – Proprietary and Confidential
3. •Analyze your core mission.
• This should be identified in your business plan.
•Make sure your current employees are
covering strategic parts of your company's
plan
• You can then look to outsource the things that are not vital
for day to day business operations.
Planning Affordable Outsourcing
2013 IO Marketing – Proprietary and Confidential
4. 2013 IO Marketing – Proprietary and Confidential
Call a meeting or do performance where you
ask your staff what other skills they have
that are not currently being used.
• For example, someone you have hired as a sales associate
may also be adept at social media marketing, so you can
appoint them to do one hour of it per day
Analyze your staff's abilities before making plans to
outsource.
5. 2013 IO Marketing – Proprietary and Confidential
Determine What Can Be Outsourced
Common ways that small businesses outsource are:
1. Customer service/help desk
2.IT
3. Online/print marketing
4. Graphic design
5. Public relations
6.Database management
7. Brokers
8. Accountants
9. Website hosting
10. Legal services
11.Virtual assistants
6. 2013 IO Marketing – Proprietary and Confidential
How much can you save?
•Calculate, according to hourly wage, the money spent doing
projects that could be outsourced.
• Separate the amount of time and money according to project,
to see what company money and time could be better spent
elsewhere.
•These are "lost" hours that are rarely calculated. Choose a
value for your time, as well as your employees' time.
•Doing a job for hours that you are not proficient at may be
costing you hundreds or thousands of dollars each week.
• If your time can be better spent increasing sales, business contracts or more, then
you can identify ways that you can save money by outsourcing.
7. 2013 IO Marketing – Proprietary and Confidential
Create an outsourcing budget
This can be money that is not being used in
current projects, leftover project money and/or
the sum total of money that can be saved if you
and your current employees are free to help
customers or actively increase sales or services.
8. 2013 IO Marketing – Proprietary and Confidential
Starting Affordable Outsourcing
Start by outsourcing one project at a
time.
Assign an hourly or project cost
according to your budget.
Find contractors for your project
Keep tabs on performance and hidden
costs
Make sure training is included in the
delivery of the final product
Evaluate the success of the project.
9. 2013 IO Marketing – Proprietary and Confidential
Start by outsourcing one project at a time
•It is important not to do all your projects at
once, because it will be chaotic for the company
and you are paying all your variable costs at
once.
•Assigning one person to lead the outsourced
project and doing things slowly will result in
fewer mistakes and risks.
10. 2013 IO Marketing – Proprietary and Confidential
Assign an hourly or project cost according
to your budget
The person who leads the project should be
aware of the cost when choosing a contractor.
Keep aside a portion of the overall budget for
employee training and materials, if necessary.
11. 2013 IO Marketing – Proprietary and Confidential
Find contractors for your project
There are an increasing number of
contractors or freelancers in the workforce
today, so the rule of supply and demand is on
the small business' side.
Many people work from home, so they have
fewer overhead costs and can charge
affordable prices.
12. 2013 IO Marketing – Proprietary and Confidential
Keep tabs on performance and hidden costs
•Have your project leader communicate regularly
about progress by email, Skype, phone and/or in
person.
• In most cases, they will be happy to work with you and adjust
their schedules if there are problems.
•Advocate an on-time delivery of the contract. If the
contractor is providing a product, such as a website,
press release, or brand, make sure you stick to a
schedule.
• Allowing a contractor to operate without a time limit is a costly
mistake.
13. 2013 IO Marketing – Proprietary and Confidential
Evaluate the success of the project.
•Launch your next freelance project after the
last one is completed.
•Once you have the process in place, you can
begin scheduling freelance projects on a yearly
timeline, according to what your business can
afford.