Up to 60% of start-up businesses will fail or cease trading inside their first three years of operations in Australia, a sobering fact! Yet, despite this and the economic hardships of the pandemic, there is still no shortage of people taking a shot at creating their businesses. Even during the pain of 2021, there was a 3.8% increase in business registrations.

It’s easy to look at the success of start-ups like Canva, Lendi and Uno and think, “why not me?” but none of these firms was an overnight success, and all of them relied not only on a great idea but on a rock-solid plan, financial support and an eye on their costs and goals.

All the firms listed above hit a phase of high growth early on, and although growth is an explicit aim of any founder, it can bring its own set of challenges. It is easy to drown in the day-to-day activities such as development, staff management, and recruitment; that is why many firms are looking to outsource to help them stay focused on core business activities.

Most businesses will outsource critical activities such as building a website or legal services. Still, many firms are now taking non-core services into the outsourced sphere, such as Marketing, Recruitment and some Financial services. 

Benefits for start-ups who outsource

No two businesses are the same, and the activities they would consider outsourcing will be different. Still, by bringing in skill sets from outside the organisation, there are several benefits to be had, including:

  • Lower Costs
    Scaling a business is a drain on resources, particularly when you need to grow before revenue your revenue does. Outsourcing can deliver reduced costs of up to 60% when utilising markets such as the Philippines and India. In addition, using an offshoring partner means you don’t need to incorporate or have assets in these locations, reducing your finance team’s costs and headaches.
  • Reduce employee turnover costs
    No one joins a start-up for a nine to five job. These formative years put immense pressure on staff, who often have to wear many hats, some they don’t enjoy doing. This pressure leads to staff burnout and can cripple a young business in hiring and payout costs. By outsourcing, you alleviate this pressure and can also maintain staffing flexibility as your business pivots and evolves.
  • Instant Intellectual Property
    With start-ups usually driven by a founder or a small cadre of people, it is easy to fall into groupthink or fail to see business issues before they arise. However, outsourced service providers are experts in their field; bringing their knowledge and viewpoints into your business early on brings lasting benefits, even after leaving. They can guide the founders on best-practice and expectations and strengthen your decision making at a stage where bad choices could be fatal.
  • Infrastructure on Demand
    Outsourced staff bring the equipment and tools they need to your organisation. However, whilst many organisations factor in the cost of laptops, furniture, and hardware, they fail to factor in specialised software, systems and processes that are non-core to their business. Outsourced support brings this standard, allowing you to scale without blowing your costs out of the water.
  • Stay Focused
    The pace of activity in start-ups is daunting; there is no such thing as an overnight success. Many start-up leaders push on, taking on more and more actions until they either make mistakes or burn out. Outsourcing activities gives your leadership and workers a chance to take a breath. Outsourcing reduces the chance of burnout and allows them to focus on the actions that matter.

What to outsource?

Each business is unique, and its appetite for what to outsource will be different. Take the time to study your work processes and identify those that could be assigned to an outsourcing partner. Some common areas include:

  • Finance and Payroll
  • Human Resources
  • Customer Service
  • Marketing and Creative
  • IT Development
  • Recruitment

There is no question that outsourcing can benefit, but the process should never be rushed. There are a lot of internal questions to answer first to understand which areas would benefit from outsourcing, whether onshore or offshore. If you are a start-up looking to reduce recruitment costs, our recruitment services are tailor-made to help you.