SUBCONTRACTING ... freedom to focus on your core business

Small businesses are usually more profitable and productive when free to concentrate on their unique strengths. Buying-in expert skills is often a cost-efficient opportunity to avoid distraction.

Specialist experience saving you money

It is tempting for businesses to try to cover all skills in-house; this can be deceptively inefficient. 'Opportunity cost' is an economic measurement of how much you are losing by not choosing a better option. If your time is best spent charging-out for your own core skills and services, subcontracting out non-core activities to specialists makes more sense than struggling to emulate their skills yourself.

UK businesses productivity is low - output per hour per worker when all material costs have been factored in. Subcontracting can be a shrewd move for smaller firms. The hours involved are limited but the returns can be high. Scalability can be achieved at minimum cost.

The important equation is that you increase your overall revenue more than you increase any additional costs. Many companies develop long, close and successful relationships with subcontract employees and special service-providers.

You do have to comply with employment law on taxation and employment rights. But you have no PAYE or National Insurance contribution administration to worry about. The extra duties are generally not onerous.

When is a good time to bring in professional expertise?

This is a personal choice. Rather than recruiting new fulltime staff when your business may be in flux, buying-in trusted, professional and highly-experienced expert workers - subcontractors - can be a cost-effective opportunity to take your business up a notch.

However, some business owners may find it difficult to 'let go' and rely on external workers and highly-qualified service-providers. The broad experience is that contracted staff are diligent and self-motivated because the longevity of their employments rests on this. In the majority of cases, they are more than able and very willing to pick up non-core but vital workloads,

Opportunities

An obvious example is bringing professional support for accounting, bookkeeping, tax-preparation and payroll, plus human resources. A rapidly-growing area is cloud-based functions that, by cyber-definition, do not need to be carried out in your offices or on your work site. Bringing in a credit control expert, for example, skilled in the use of Xero Credit Control can be a real bonus.

Technology is another specialist role where consultants are often better able to manage computers, company networks, servers, software problems, develop websites and resolve technical hitches quickly.

Communications is a primary area where editorial, layout, design and website functionality are often conducted by specialists. An area where many small firms may instinctively feel that outside resources can help them to compete more strongly is public relations and marketing. Presentations to high professional standards can leverage a company's own unique in-house strengths.

One-off tasks, or projects that call for a fast turnaround - often at short notice - are also prime areas. It is important to remember that while independent specialists can free-up your own in-house staff to concentrate on their primary jobs, your customers benefit too.

In summary

Keeping everything in-house is not necessarily a good business decision. Expanding companies with staff dedicated to specific key roles are already heavily committed. Bringing in experts for limited hours who can lighten the load on a temporary or permanent basis can be a very cost-effective option.

"Letting go' can also be an opportunity for you to raise your own personal productivity level, refocus your energies and expertise to where they are most profitable, and to no small degree, improve your own quality of life, wellbeing and general health.