The Startup Survival Guide: How Outsourcing Can Give You a Competitive Advantage
The failure rate for startups is high. According to the U.S. Bureau of Labor Statistics, about 20% of startups fail within their first year.
The startup landscape is exhilarating, offering a world of opportunities for entrepreneurs to turn their innovative ideas into successful businesses. However, the journey is fraught with challenges.
There are many reasons why startups fail, but one of the most common is that they get outcompeted.
In today’s globalized economy, businesses of all sizes from all around the world are competing against each other. There’s more competition than ever before. This means startups need to find ways to differentiate themselves from their competitors in order to survive.
Outsourcing: A competitive advantage for startups
One powerful strategy that can help startups tip the scales in their favor is outsourcing. This approach involves delegating specific business processes or tasks to external vendors or service providers. By leveraging outsourcing, startups can focus on their core competencies, scale efficiently, and enhance their overall performance.
There are many ways that outsourcing can give startups a competitive advantage.
1. Cost Efficiency Without Compromising Quality
For startups with limited financial resources, outsourcing offers a practical solution. Instead of hiring an in-house team for every task, startups can tap into a global talent pool of specialized experts at a fraction of the cost.
And it’s not necessarily that much of an ethical dilemma as you might think when you consider that outsourcing hubs like the Philippines often have a lower cost of living than the US and other developed countries. In fact, the BPO industry in the Philippines is known locally for providing above-average income within the country.
Whether it’s IT development, customer support, marketing, or human resources, outsourcing allows startups to access top-notch talent that can produce profitable outputs, all without breaking the bank.
A promising tech startup from Silicon Valley, for example, can launch its innovative mobile app even on a tight budget by outsourcing app development to a reputable offshore development team. As a result, they can produce a high-quality app delivered on time and able to ride current trends, thus maximizing possible profits.
2. Access to Specialized Expertise
Many startups are founded on a visionary idea, but their core team might lack expertise in various critical areas. And this makes a bigger problem if there’s currently a skill gap locally for the positions they need filled.
Outsourcing grants access to a diverse talent pool, ensuring that startups can tap into specialized skills that they may not possess in-house.
Let’s put this into perspective. Imagine that a health-tech startup wants to build a groundbreaking telemedicine platform. However, their team lacks experience in healthcare regulations and compliance in their target country. By outsourcing legal and regulatory compliance tasks to local compliance professionals, they can avoid costly mistakes and ensure their platform adheres to industry standards, gaining a competitive advantage in the highly regulated healthcare market.
3. Increased innovation
Outsourcing providers can help startups to innovate by bringing new ideas and perspectives from beyond borders to the table. This can help startups to stay ahead of the competition, develop new products and services that meet the needs of their customers, and even expand their markets to other countries with the help of local offshore employees.
Not only that but by outsourcing non-core business functions, the visionaries and brains of the business get to focus more on coming up with new, groundbreaking ideas, instead of getting bogged down by administrative tasks.
Imagine having to answer dozens of customer queries every day, all while having to think of the next iteration of your product. It’s just impossible! You’ll be tired just typing email responses that you won’t have the time, energy, and motivation to research, brainstorm, and come up with the next big thing at the end of the day.
Outsourcing tips for startups
If you’re a startup and you’re considering outsourcing, there are a few things that you need to keep in mind especially if this is your first time:
- Do your research: Before you outsource any functions, it is important to do your research and select the right outsourcing providers. There are many different outsourcing providers available, and not all of them are created equal. Make sure to choose one that has a track record of success, and can ensure that you remain in complete control of your business and employees for best results.
- Set clear expectations: Once you have selected your outsourcing provider, it is important to set clear expectations. What are the hours of your outsourced employee? What work setup can be provided? How will you track work progress? Answering these types of questions, saying what you want from the beginning, and knowing what your provider can deliver will help to ensure that both you and the outsourcing provider are on the same page at all times.
- Monitor performance: It’s important to monitor the performance of your outsourcing provider on a regular basis to determine if you are getting your money’s worth. Which makes partnering with a transparent outsourcing provider one of the most important things you could do.
Outsourcing is not a one-size-fits-all solution, and startups must carefully assess their needs and choose reputable partners. However, when done right, outsourcing can transform a struggling startup into a thriving business, carving its path to success.
With Tahche, you can embrace the power of outsourcing, and let your startup soar to new heights! Get in touch with us to learn more.
