THE GOLDEN RULE: Core business vs Outsourcing

SHARE   |   Sunday, 08 March 2015   |   By Nelson Letshwene

A typical business starts of knowing why it’s in the market and what it is aiming to accomplish. Unfortunately along the way, the business owner gets ambushed by all other things that are necessary to run a business. These things can distract the owner from focusing on the core business.
The next thing the owner does is to hire other people who are supposed to help the owner with these other things that get in the owner’s way. These people now need to be managed. These invariably become another business, for which they must hire someone else to manage, that is, the human resource business.
If two engineers want to go into business and build houses, and they know everything there is to know about building houses, why are they spending so much time in the office doing accounting and trying to submit taxes?
One of the things that can help every small or medium enterprise out there, is if we can each specialise in our fields, and shove off whatever we know nothing about to those who do. These two engineers should be focusing on improving the building process and providing the best houses there is to provide. They should outsource their accounting function to an accounting business that will handle the billing, invoicing, collections, and financial reports. They don’t have to have another ‘business unit’ within their firm called the accounts department, which comes with human resource problems.
They can outsource the marketing function to a marketing company, which is skilled in selling houses. They can outsource all their legal issues to a law firm that makes sure that they are staying within the law in all they do. They can even outsource the HR function to an HR company to make sure that they team that they hire and use has the right skills to make them succeed.
This model can be applied in just about every business that we start. By outsourcing to each other, we could build the business sector, where everyone does their part and we all become successful. Outsourcing is not just something that should be done by the government or big firms. Even small companies can do this if we all work on the pricing models.
People think by hiring people directly they will save money, but they never think about all the other problems that come with having a lot of people to manage.
What is your core business? Are you doing everything you can to focus only on your core business or are you also wasting time and money on functions that you know little or  nothing about? Are you missing out on the latest trends and research in your field because you are busy doing things in your business you should have outsourced? How quickly could your business be outdated because you are missing out on the latest trends?
Small companies that claim to do everything are wasting both time and money. Being a jack of all trades does guarantee that you will be a master of none. Companies that build huge departments that consume money but are not part of the core business should consider the outsourcing model.
Obviously research must be done about whomever you outsource your business to, to make sure that they are professional enough and focused on that function only, and will not be giving your valuable information to your competition.

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