What Should Your Startup Outsource?

Founders and early startup employees know the feeling all too well.

An exciting project or campaign begins to take shape. Action items build, and then, suddenly, your task list is a mile long. You put your head down and your blinders up to get through the list. All of a sudden, the creative energy you’d normally apply to work on the business is being spent working in the business.

This is where outsourcing comes in.

No one knows or understands your product or service better than you and your team, and outsourcing can be met with understandable wariness.

But if you are reading this blog, it means you and your team are spread thin, you know you need help, but are not quite ready to bring on full-time help. It’s a critical place to be.

By outsourcing, you can rid yourself of repetitive or administrative tasks, keep your work model lean, reduce mistakes, free up your creative energy, and ultimately, scale properly.

Pros and Cons of Outsourcing

Outsourcing is an extremely valuable tool accessible to founders and early startups. But just like most things, outsourcing has benefits and downsides to consider as you build your strategy.

Here are some upsides of outsourcing to consider:

  • Cost control – Working with freelance or contract employees allows you to set a predetermined budget for the scope of work. This allows you to be more specific with the expected costs and outcomes of your outsourcing project.
  • More access to talent and expertise – The talent pool for an outsourcing project is virtually anyone, anywhere. You’ll have global access to talent without having to incur the cost of hiring a field expert full-time.
  • Prevent internal burnout – Startup employees are notoriously prone to burnout. Empowering yourself and your team to hire help where needed can free up your internal bandwidth and prevent burnout in the present and future.

Related: How to Recognize, Address, and Prevent Burnout at Your Startup

Like any business investment, there are risks associated with outsourcing. Keep the following downsides in mind:

  • They don’t know your business – To be fair, no one knows your business like you do. But there is a steep learning curve for a freelancer jumping in on a project, versus a full-time employee who spends every day in your business. Make sure you have lots of documentation and know exactly what your expectations are for outsourcing projects— especially those that are brand-related.
  • Communication hurdles – When you’re working with an outside contractor, you can’t walk over to their desk when you have a question about the status of the project or to clarify a deliverable. Ideally, they are a phone call or email away, but response times with contracted teams vary. Ensure you set clear expectations upfront, including your preferred response time and where your communication will occur.
  • Trial and error – No matter how robust your interview process is for contractors and freelancers, there’s still a chance the outsourced project won’t go as expected. Whether it’s the quality of work, a breach of confidentiality, or simply not a fit, you may have to kiss a few frogs before you find the perfect match for your business. Be patient and be prepared to spend some time upfront vetting your contractors. Consider a trial period before you make a final offer.

Three Business Functions Your Startup Should Outsource
So what do you outsource first? Here’s what we recommend.

Financials

Tasks like payroll, accounting, and financial modeling and reporting should be outsourced to a firm or individual until your growth makes your financial structure more complex. At the start, your finances should be relatively straightforward to outsource.

In addition to taking this task off your plate, an additional benefit is the expertise a knowledgeable financial organizer can provide. They can take an objective approach to your financials, giving you accurate predictions for your growth and best practices for how to proceed.

Customer Service

As your product or service scales, you’ll experience a sharp increase in your customer service requests. Think refunds, exchanges, questions, concerns… you know how it goes. At the same time, customers have increasingly high expectations for how reachable their vendors and sellers should be.

The risk you run by attending to all customer service requests yourself is a bad Google review, poor word of mouth spreading, and your reputation destroyed by one small request left unchecked.

In fact, 94 percent of consumers say a bad review has convinced them to avoid a business.

Outsourcing your customer service to a trusted team can free you up to improve the product or service and keep your customers happy.

Recruiting

Even if you are not ready to hire full-time employees at a steady pace, you should still consider a long-term, established partnership with a recruiting agency with a deep understanding of your culture and a large pool of qualified candidates.

The process of finding, vetting, interviewing, and onboarding candidates is a huge commitment that few founders or HR teams can dedicate enough time to. Whether the positions you are looking to fill are full-time, part-time, fractional, or contingent, the right recruiting agency can bring you qualified candidates quickly, and familiarize them with your product or service and culture.

Need help?

Viaduct works with nationwide venture capital firms to design and integrate recruiting strategies for young, high-growth companies. They can help you build a qualified team that aligns with your organization’s mission.

This blog was authored by Viaduct Senior Talent Consultant John Jameson.

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