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6 Benefits of Small Business Outsourcing

When you’re a small business owner, you have to wear many hats: manager, accountant, administrator, customer service rep—the list goes on. Juggling so many responsibilities takes significant time and distracts you from growing your business.

The good news? You can outsource many business processes to a third-party provider like an outsourcing firm or freelancer. 

By outsourcing, you can increase the efficiency of your in-house employees while benefiting from the experts. Focus your energy on what matters: serving your customers.

This article will examine the benefits of outsourcing for small businesses and the best areas to do so. Let’s dive in!

Benefits of small business outsourcing

Small business outsourcing has several advantages over keeping everything in-house. Here are the most common benefits.

Reduced labor and overhead costs

By outsourcing, you’ll experience cost savings in several areas. You won’t have the cost of recruiting and onboarding full-time employees, which reduces labor expenses and frees up capital. You also won’t have to hire temporary employees for short-term projects.

Plus, outsourcing converts fixed overhead costs into variable costs. This reduces your overhead expenses and gives you more control over spending.

Access to new tech and infrastructure

Nearly 50% of businesses use outsourcing to access new capabilities, and outsourcing service providers use the latest infrastructure and tech. That means small businesses can take advantage of new tech without investing in it themselves, helping them compete with larger rivals.

For example, say you outsource your accounting and payroll processes. Your outsourcing partner will likely use a cloud solution like software for bank reconciliation. This saves time and reduces errors.

Bank reconciliation software automatically matches invoices and receipts to bank transactions, ensuring every cent is accounted for. 

Your external accountant can view transactions and bank charges in an intuitive dashboard. Plus, it's easy to spot any fraudulent activity costing you money.

Alt text: Image showing a dashboard from Sage bank reconciliation software.
Image Sourced from

Increased focus on core business activities

By outsourcing business operations like admin, accounting, and website maintenance, you’ll have more time to home in on core business activities that generate revenue. Focus on your customers and refine your business strategy to generate growth. 

Improved work quality and efficiency 

Eliminating time-consuming tasks allows you to optimize your workflows and improve efficiency. So, outsourcing helps you improve your overall business performance.

Moreover, hiring an outsourcing company gives you access to professionals with many years of experience. As a result, you’re likely to notice an improvement in work quality—and they may recommend improvements to improve productivity, like AI for small businesses

Quicker response to changing business needs

When business owners outsource, they make their companies more agile. That means you can quickly adapt to changing market conditions.

As your business needs change, you won’t lose time re-training employees or onboarding additional employees. Instead, you’ll get instant access to the resources and expertise you need, giving you a competitive advantage. 

Risk reduction and business continuity

Outsourcing certain functions can also help with risk management. You can avoid many risks associated with business investments, like changing market conditions and government regulations.

In addition, outsourcing can ensure business continuity as you won’t have the problem of your top talent retiring or leaving. You’ll always have access to a pool of experts.

Areas of a small business to outsource

Let’s look at the areas that can benefit from small business outsourcing the most. The best areas to outsource are those outside of your core business (though outsourcing could supplement these areas).

Below are some examples of business functions you may want to outsource.

Human resources and payroll processing

Payroll management takes up a lot of time, and accuracy is essential. Inaccurate payroll harms your reputation with employees and can lead to costly penalties. 

Outsourcing to a professional or a small business payroll software provider reduces errors and ensures compliance with regulations.

Cloud-based payroll software automates and streamlines payroll processes like tax calculations and employee payslips, improving accuracy. 

Your team can process payrolls on a timescale that suits you (weekly, bi-weekly, or monthly). Plus, you can analyze payroll and costs to make better business decisions.

Image showing two people working together with papers and two laptops

With the right software, you can manage payroll anywhere, anytime. All you need is an Internet connection.

Accounting and bookkeeping  

For most companies, accounting and bookkeeping aren’t core business functions. This makes them great candidates for outsourcing.

Professional accountants ensure you stay compliant with the IRS or HMRC. They can also identify potential cash flow problems or areas of weakness, helping you streamline your organization and save money. 

Tax filing and preparation

Outsourcing tax filing and preparation lets you focus on managing your business. Also, tax consultants are experts that are likely to use the latest software, reducing errors that could otherwise cost money. 

What’s more, they can advise you on ways to reduce tax, like tax allowances or tax-deductible business expenses.

IT support and development

IT providers have extensive knowledge of the latest systems and security protocols. They can ensure efficiency while keeping sensitive data safe. Plus, they can troubleshoot tech issues and perform maintenance that would otherwise eat into your time.

In addition, outsourcing IT development means you don’t have to recruit and onboard in-house developers. This saves money while ensuring you work with people with the necessary technical skills.

Marketing and advertising services

Unless you’re a marketing company, it’s helpful for SMBs to outsource marketing operations to an agency.

Marketing agencies have years of experience in planning and running successful advertising campaigns. They can suggest fresh digital marketing approaches, such as social media marketing, to help you tap into new audiences and build your brand’s image. 

They can even give you guidance on how to communicate effectively with customers

Customer service and support

Finally, customer service and support are great areas to outsource for small businesses with limited time and staff. 

Outsourced teams can be there for customers 24/7 on multiple channels, giving them the support they need on the channel of their choice, leaving you free to build your customer base. 

Image showing two women at a counter.


Small business outsourcing offers a range of benefits, including cost savings, time savings, and greater efficiency. Before you outsource, though, you need to ask questions like:

  • Are the potential cost savings more than the cost of the service?
  • Can my existing in-house team handle this function?
  • Can I perform this function to the same quality as an external professional?
  • Will outsourcing let me focus on my revenue-generating activities?

Compare the price and qualifications of different outsourcing options, and ask for examples of their work. 

Once you’ve found the right provider, you can focus on getting the tools you need to streamline your business. Create your shop with Cococart and start selling to your customers in minutes.

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