What is “offshoring” or “outsourcing,” and is it viable for small businesses? Offshoring engages overseas staff to work on specific solutions or fulfill roles in your company, such as running payroll or designing your website. 

In a nutshell, offshoring — also known as “outsourcing” — is engaging another business to provide deliverables, such as hiring an accountant to handle all your business taxes. While most outsourcing is “offshore,” many companies outsource to domestic firms or subsidiaries. But offshore outsourcing is, by definition, done by workers overseas and is generally handled by U.S.-based companies that employ workers in foreign countries. (Small business owners, in other words, do not have to interact with a foreign company.)

Many small business owners may perceive that large businesses do both for financial incentives, such as manufacturing plants in offshore locations closer to overseas markets. But utilizing an offshore team can be a very effective business strategy for small businesses for multiple reasons.

Keep reading for a breakdown of how offshoring can be an effective and affordable strategy for growing your small business — and how you can best implement outsourcing in your company. 

Get the insights on up-and-coming industries, key challenges, and more in Top Trends and Challenges Facing Small Businesses: Guidant’s Small Business Trends.

Scaling Smartly: Unleashing the Power of Offshoring 

Ready to explore the game-changing strategy of offshoring in small business? In today’s interconnected world, offshoring has emerged as a powerful strategy for companies to tap into global resources and markets. Join us as we uncover how outsourcing labor — either globally or domestically — can help small businesses expand their reach, enhance efficiency, and drive growth like never before.

On-Demand, Flexible Services

First, an offshore team can provide a far more flexible set of services than many small business owners can access. For example, an offshore team can provide the following services:

• Cash management, such as bookkeeping and accounting
• Human resources
• Payroll services
• Accounting and taxes
• Legal services
• Corporate maintenance
• Investment management, such as 401(k) oversight
• Setting up benefits to enhance employee retention (e.g., health insurance plans) 
• Creative services (e.g., web or graphic design) 
• Marketing
• Virtual assistants (e.g., setting up travel or scheduling meetings)
• Customer service
• Call centers

Now that you know the range of services generally offered, you can understand what offshoring can do for you and your business. Keep reading to explore even more benefits of this recruitment strategy for small businesses. 

Effective Time Management

One of the most common challenges small business owners face is time management. For example, many small business owners choose to do their own taxes or payroll. This move may seem cost-effective for some. After all, how much time could completing monthly taxes or payroll take? The answer is: A lot of time, especially for a busy entrepreneur. Even new business owners struggle with completing these tasks on time and correctly. What’s worse, tax or payroll mistakes can cost a business in the long run.  

Every half-hour you spend on taxes is a half-hour you could have spent on tasks much more central to the business’s health, such as creating and selling products, strategizing, or hiring. Plus, many of these tasks are much more complicated than they look. What you think is a five-hour task may easily balloon to 15 hours and more — tops. 

Small business owners need to stick to the core of their business, providing a product and making a profit from it — or they won’t stay in business long. Straying far from profit-making activities is one of the most dangerous business risks.

At the same time, though, many time-consuming functions need to be done from the beginning. You can’t do your business taxes or be subject to fines and penalties. If you have employees, you must do payroll, or they won’t be paid. You can’t put these off, but you must avoid having them drain your time. Offshoring the functions is a way to get these admin tasks done professionally without having to do them yourself.

Feeling stressed or burned out as a small business owner? See 5 Ways to Reduce Small Business Stress.

Solving Problems

All businesses encounter challenges that need to be solved. Offshore remote teams can help. Let’s say you need to set up a website to sell your products online. Yet, you may be a sole proprietor or only have a few employees — and if it’s the latter, you need to hire those close to the business’s core. You may need a salesperson much more than a web designer. An offshore remote team can offer professional design services.

Let’s now dive deeper into more of the benefits of outsourcing labor for small businesses.

Top 5 Benefits of Offshoring

The perks of offshoring don’t end there. In fact, the benefits of offshoring can strengthen and help scale your business with ease in multiple ways. Most are surprised at how much outsourcing labor can benefit small businesses — not just large corporations. Let’s review the top five surprising benefits of offshoring:

1. Lower Costs

It’s no secret that cost management is essential for business. It’s also no secret that finding cost savings is difficult in an age of high inflation and the upward labor costs caused by relatively high employment in the U.S.

Offshoring enables businesses to tap into regions with lower labor costs, helping to reduce operational expenses and increase overall cost efficiency. By outsourcing certain tasks or processes to locations with competitive wage rates, companies can optimize their budget and allocate resources strategically.

In short, offshoring offers more affordable, lower-cost services — allowing you to access professional services or staff your company at an optimal cost.

2. Effective Scaling

One of the biggest problems facing small businesses is the effective scaling of the business. What if you suddenly need more staff in customer service? What if that staff is only needed for part of the year?

Offshoring provides a scalable solution to accommodate fluctuating workloads and demands. Businesses can easily scale up or down by leveraging a remote workforce, ensuring agility in responding to market dynamics without the need for immediate physical expansion. Why?

Offshore employees are often more flexible. You can quickly and easily hire your staff through an offshoring provider. If business conditions change, you can downsize quickly and efficiently. Whether you need to hire for a busy holiday season or need a virtual assistant, outsourcing labor globally or regionally can help you scale when your business needs it.

3. Access to Diverse Talent

With high U.S. employment numbers, finding the right staff can be challenging. Offshoring opens up a global staff search for skilled labor, making the search more efficient. Outsourcing can grant small businesses access to a diverse pool of skilled professionals from around the world. This enables companies to leverage specialized expertise and knowledge that may not be readily available locally, fostering innovation and high-quality output.

Plus, if you plan to outsource labor regionally — your job offerings become that much more enticing to those nearby looking for a flexible work schedule. For example, hiring a remote virtual assistant within your state offers the flexibility of remote work and controls the range of tasks your assistant can handle, such as scheduling meetings and following up with emails. This trend offers businesses a diverse talent pool and cost savings while benefiting from professionals who appreciate the Work-From-Home (WFH) model. However, effective communication tools and strategies are crucial for successful collaboration — and keep in mind that U.S. labor will likely still cost more than global staff.

The best way to access global talent as a small business? Meet DOXA, your ultimate partner in sourcing exceptional, reliable talent globally. DOXA specializes in connecting small businesses with top-tier professionals from around the world — facilitating accelerated growth and establishing strong credibility with your clientele. Learn more about how DOXA can help your business scale smartly.

Learn how to find the perfect candidate when hiring for your small business, including essential tips on recruiting, best practices, and where to look in Hiring for Small Businesses 101.

4. Employee Retention and Satisfaction

Turnover in U.S. during the past several years has been relatively high by historical standards. Several factors, including perceived lack of career growth, compensation, leadership issues, and work/life balance challenges, drive turnover. But outsourcing offers an opportunity to solve all those issues.

Utilizing offshore companies for some tasks can free your in-house team up to take on more strategic, value-added roles. These roles, in turn, can compensate them more highly. Offshore business operations can also be used to increase attractive benefits, such as health insurance, to make your company more attractive to workers. And more staff can alleviate more of your work and life balance issues as a busy small business owner. Remember, you can use offshoring to make your business more effective — and gain more time to address with employee retention or satisfaction issues.

Plus, outsourcing can contribute to higher employee satisfaction by providing growth opportunities and diverse experiences for existing staff. Companies can retain key talent by offering opportunities for international assignments or remote work, promoting professional development and reducing turnover.

5. Staff Augmentation

Offshoring offers the flexibility to augment staff as needed without the complexities of permanent hires. Companies can quickly tap into additional resources for project-based or temporary work, allowing them to tackle challenges and seize opportunities without the constraints of a fixed workforce.

Want to avoid common pitfalls when hiring for entry-level positions? Check out our latest blog post on 5 Mistakes to Avoid When Hiring Talent for Entry-Level Jobs.

Smooth Business Sailing with Guidant

Need a partner in helping your small business succeed? At Guidant, we can help save you time, money, and alleviate the stress that comes with running a small business. Not only can we get the funding your business needs to be successful, but our team offers a range of affordable and small-business-tailored services — from bookkeeping to tax and payroll services.

You can choose just one, or every single one, or any number of services in between. Our experts have helped launch and support over 30,000 American small businesses. Whatever your need, you can trust our team to support you. Contact us today to get started!

Call us today at 425-289-3200 for a free, no-pressure business consultation to get started — or pre-qualify in minutes for business financing now!

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— Stephen Such, Falling Sky Brewing

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