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How to Start an Outsourcing Business

How to Start an Outsourcing Business Photo

©Depositphotos/olechowski

Are you thinking of starting an outsourcing business? If you are, you may be on onto something great!

Outsourcing is the process of delegating jobs to external bodies. With contracts, individuals or businesses complete jobs for other companies.

Example:

A company that can’t perform customer service functions can delegate that task to a smaller company.

For large companies, that may mean saving. For outsourcing businesses, that means contracts and income.

1. Consider your expertise and skills

What services will you provide?  Would they be in accounting, customer support or web page designing? You’ll have to be good in these yourself.

On the first few contracts, you’ll be doing the job yourself. At this stage, you’ll have to prove your worth. Also, it’ll be easier to supervise others when you yourself know the field.

In creating an outsourcing business, looking at what you can do for other companies is the 1st step.

2. Choose a good location

Can your home be a good business location? Absolutely!

CNN Money cites the case of a mom who’s now earning thousands. Initially, Julie Trade was working in a spare room in their house. From there, she created her marketing communications business.

Other outsourcing businesses that can be done from home:

  • Accounting
  • Web page designing
  • Data entry
  • Writing

Call centers need to be in offices where phone connections are at its best. Internet and computer connections should be excellent.

Already have a business such as manufacturing? Location should be no problem. You can develop your business from your current location.

3. Estimate your production cost

In the case of call centers, money would definitely be needed. Computers, phones, desks and other equipment are vital. Salaries of employees should also be considered.

Here’s link on how much call centers might cost: call center tips

Call center representative salaries 

In the case of home based outsourcing businesses, production cost wouldn’t be much. A computer and assistants’ salaries would only be your expenses. Hiring freelancers are also cheaper and this makes work faster.

4. Staff your business with effective employees/contractors

  • Home based outsourcing business

For home based outsourcing businesses, contractors are more ideal to have. However, you’ll have to make sure they are competent. Your business integrity depends on their work.

Freelancers can be designers, writers, lay out artists and marketing experts. You can assign them quantities of work with an agreed upon pay. They submit finished stuff to you and in turn, you deliver to clients.

  • Call center businesses

The reason why American call centers in the Philippines become so successful is because of the workforce. Filipinos are generally more knowledgeable with American idioms and communicate better. Today, they lead the world in effective customer service. Here’s an article from the NY Times

5. Be fair when it comes to price

Did you know clients always prefer freelancers who are fair? That means being fair in contract cost and the quality of job handed in.

Now that you’ve completed an outsourcing business, try building a name first. Asking for a bigger paycheck can come later.

Like Julie Trade, she started out with smaller paychecks. In the long run, she’d accepted contracts from British Telecom.

6. Contact more clients

Isn’t owning a business exciting? But… how the heck can you invite more clients?

Rosemary Peavler of About.com suggests you contact companies yourself. Research for companies that are known for outsourcing work. From there, writing them and offering your services will be a start.

The internet too, is a good way to advertize a business. Connect with blogs and social networking sites to make people know of your

  • designing business
  • accounting services
  • editing services
  • tin can manufacturing business…

Click here for more tips on advertising a business

  • Rick S

    Outsourcing may sometimes be a threat to your budget if you don’t know when and where to put up the business. Unless if you have the same management plan like these outsourcing sites (Odesk, Staff.com, Elance, Guru) then you would really excel in business.

    By the way, thanks for sharing this article – definitely helpful!

  • http://www.alldaypa.com/ Joanne

    Outsourcing has become particularly popular in the past few years and more and more businesses are utilising this as a cost saving method of getting a job done well. Know your skills, build a reputation and you can start an extremely successful outsourcing business :)