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Old 6th December 2008, 05:39 AM   #1
OutsourcingC
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Default Do You Think Outsourcing Saves Money

I would like to know people's point of view regarding outsourcing or hiring VAs than the traditional way of renting a physical office and hiring personnel to do office work.

For me, I believe that outsourcing is the way to go since it is the most inexpensive way to operate a business. You don't have to rent a physical office and hire a lot of personnel to do specific work for you. When hiring VAs, they can do multitasking.

Please share your thoughts on this especially the pros and cons.

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Old 8th December 2008, 09:11 PM   #2
Allectus
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Default Hmm..the question of the century

Outsourcing only saves money in the short term.

You want your business to survive beyond the short term, don't you?

Establishing your business now with your own employees allows you 3 advantages:
1) Control
You will never understand how important employee control is until you cost out the losses of not having control. I do this for clients all the time. It's not good.

2) Consistency
It's that simple. You need to maintain consistent in every aspect of your business.

3) Ease of Management
It is easier in the long run to have the help of insighful employees to HELP you manage the business. I do this all the time too. Some of my most successful consulting project have come from the ideas and suggestions of my clients' employees.

I wrote a blog about this very topic last week.

Don't sell full-time employees short.

Hire them, train them, keep them.

Good Luck,

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Old 9th December 2008, 12:23 PM   #3
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You don't have to rent an office to have employees.

If you can work "virtually" with a VA who isn't in your office, you can do the same with an employee. There are plenty of good employees out there who might be perfect for your business -- except that they live in some other location and can't (or choose not to) move to where you are. So hire them, and set up a "virtual office."

That said, establishing a relationship with a good VA can get you many of the benefits of having a full-time employee without the additional tax withholding and paperwork -- with the additional benefit that you only pay for the work time you actually use. A professional VA is a business asset as much as a traditional employee, and given their experience with multiple clients, may be able to bring a useful "outside" perspective to your business issues.

Of course, there are some people who just aren't comfortable working with others they can't see face to face. If you're a business owner who feels this way, you might want to go with a more traditional office environment. You could still save some money by renting space in a shared office.

And, of course, even if you decide on an outside office, you still may not need full time employees. I have worked in the past as a contract consultant and have hired temps myself from time to time. In some cases, the so-called "temps" have proven to be more loyal and harder working than the "permanent" employees.

Outsource or hire, set up an office or "go virtual," depending on which makes sense for your business at that time. There are a lot more issues to take into account than simply "which one costs less."

My

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Old 6th February 2009, 02:57 PM   #4
NLeon
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Outsourcing is often a very good way to go. You get professional work without having to have an employee (which comes with taxes, benefits, etc). Since you don't have to pay for taxes and benefits, outsourcing is generally cheaper. You can outsource just a few tasks or get a full-time Virtual Assistant. For small businesses, I definitely think its the way to go.

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Old 6th February 2009, 03:10 PM   #5
homebizworker
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Default Probably Not

From what I've been reading, even large companies who have outsourced are not happy with the results. I guess though that it really depends on what you're sending out. If it's packaging products or doing pr, it might make sense to do that. Otherwise, why not keep it in-house and in your control.

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Old 11th February 2009, 12:50 AM   #6
janicepink
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Sometimes it's not just the efficacy that we should take into consideration. Having a business is a gamble and we should also consider what's more affordable because IMO, both could actually work well if played right.

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Old 12th February 2009, 03:45 PM   #7
jessica-npc
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Default the benefits of 'one throat to choke'

disclaimer: I work for No Panic Computing computer outsourcing, BUT I do have a point of view that may benefit this thread - I promise!

"total cost of ownership" says that computer costs =

the cost of the computer hardware
+ maintaining the computer
+ securing it against viruses and attacks
+ backing it up
+ installing patches/software
+ the occasional breakdown and downtime that occurs while you fix it

= lost of time and money (144 hours/year on average believe it or not)

So, in terms of protecting and predicting cash flow, if you can get someone to do all that for you for a price that falls below the value of your wasted time + cost of tech support + cost of the computer -- you will:
- save money
- save tons of time
- be better able to manage your cash flow
- finally, you have 'one throat to choke' if anything goes wrong with the computer, the software, your backups, your batteries - whatever!

You will save time, stress, and money outsourcing computers in this way, but I am not sure if this applies to outsourcing other expenses mentioned in this thread -- furniture, for example.


Last edited by jessica-npc; 12th February 2009 at 04:09 PM.
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Old 8th June 2009, 07:32 AM   #8
FL Management
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IMO outsource save money. It's cheap and best option.

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Old 9th June 2009, 04:39 AM   #9
theieu
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Yes, outsourcing can saves you a lot of money, you can bid your project to the lowest price and you can save also on certain benefits that a regular employee has.

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Old 9th June 2009, 01:36 PM   #10
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Default

A lot of valuable info in the previous posts. As you've gathered from the range of responses, the answer tends to be "It depends on your situation". Torka captured that wisdom nicely in her conclusion--ya gotta answer the question with your particular scenario squarely in view.

If Torka's gonna (severely under-) price her advice at two cents, then here's my three-quarters-of-a-penny addition:

In a startup situation, outsourcing might have a temporary advantage in terms of the flexibility it offers. Going in, there's typically a lower capital investment required to get up and running. On the back end, should you decide to bail, you can usually pull the trigger faster, and with less 'exit' costs (e.g., no employees to pay thru the end of the month; no office equipment to offload through Ebay; no lease early-termination penalties).

In short, outsourcing might give you the option of testing the waters first, at a lower cost. You can always "go real" later, should the waters prove lucrative.

Nevertheless, the answer remains, "Evaluate based on your own particular fact-set." Best of everything!

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