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Oust the Outsourcing: Your Smaller Business Can Manufacture Its Own Products!

Manufacturing is a massive task, and many small and medium-sized business write off the idea of doing so and choose to outsource instead. Outsourcing is great in many ways, it one less thing for you personally to worry about as you can put the task in the hands of a reliable and experienced business who you know will provide you with excellent products.

However this service does come at a cost, and every month where you’re using another company there’s a cut taken from your profits. It is completely possible as a smaller business to manufacture products yourself and therefore cut out the middle man, but there are some things to bear in mind too. Here are a few of them.

Practicalities

First things first, you will need to consider the practicalities. You will need to find a suitable business premises that’s in the right location and is the right size. It should have good transport links and ideally be situated close to your other business premises for better productivity and less transport costs. You will then need to source all of the vehicles, machines, tools and equipment needed for your business.

Often businesses close down and sell of their items for cheap, you could also check auctions and other places for second-hand bargains. Companies like Altium provide electronics design software, these are the kinds of things you might need depending on the kind of business you run. Otherwise, look at good suppliers in the area and make sure you have everything you need to get started.

Setup Costs

One of the biggest problems when it comes to manufacturing your own products is the upfront cost. While it will save you money in the long run compared with outsourcing, those initial costs are high and so this is something you will need to be aware of. Set a budget, and don’t forget things like premises cost, maintenance cost as well as recruiting and training staff members. If you’re able to afford to do all of this, you will save money overall and turn a better profit each month. You could go into business with a partner, or even look for investors for your SMB if the costs are currently too high.

Health and Safety

Finally, every business has health and safety concerns. Even in an office, a very safe environment, you could slip or trip or fall down stairs. However it’s even more of a problem in a manufacturing plant. Heavy machinery and power tools, chemicals, hot liquids and falling from heights are all risks. Make sure your health and safety is up to scratch and everything is being followed to the letter. Staff should have the correct training and experience for their role, and you should have the right insurances in place in case anything does go wrong.

Would you consider manufacturing your own products in your SMB? Do you find outsourcing more convenient, or are you fed up of how much it cuts into your profits each month?

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Keep Things In-house to Maintain Your Control over Your Small Business

Nowadays, more and more small business owners are outsourcing aspects of their work. But if you’re new to the field, you might be a bit unsure as to what outsourcing is and what best suits your personal business needs. Here’s everything you need to know about the outsourcing process!

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What is Outsourcing?

Outsourcing is a commonly used business practice where businesses use independent third-party companies to complete specific tasks, operations, jobs, or processes. There are various reasons that companies do this. Sometimes outsourcing can save money: it can be cheaper in the short term to use third-party manufacturers to create a short run of goods.

It may also be easier to draw in individuals with independent expertise to complete one-off tasks rather than training one of your own employees or hiring a full-time employee to do one task and serving little more purpose for the benefit of your company.

Why Will It Benefit Me to Keep Things In-House?

While outsourcing is great for one-off tasks, or short production runs, it’s often better to keep things in-house if you plan to repeat the same tasks and manufacturing over and over. For these kind of things, outsourcing can prove more expensive in the long run. It’s better to own the means of production or employ the expert individual in the long-term if you’re going to require their services more regularly.

There are more benefits to doing this than mere cost and profit too. When you outsource, you hand a portion of control of your company over to someone else. You have to place your trust in them and hope that they complete the required work to the quality that you expect.

By keeping things in-house you regain control: you can oversee processes and make tweaks and changes along the way.

What Can I Keep In-House?

Manufacturing

Manufacturing can easily be kept largely in-house. Consider investing in machines that you will get repeated and long-term use out of. For example, milling machines, robotic arms, and conveyor belts. This can ensure that your goods are produced, assembled, and packed as quickly as possible and that you can check up on them during every step of the process, assuring quality and precision.

Market Research

Many people use outsourced market research to save time. But if you have a little patience and work a few extra hours you can do the job yourself. Most of the research is already out there with results posted online. Then you can conduct small-scale specific interviews yourself. Simply use your social media page to find volunteers who will be able to give you a deeper insight and understanding of your brand and brand image.

These are just a couple of areas that you can shift from outsourced work to in-house work. It’s definitely worth the effort in the long run. While you may not see immediate results, you’ll notice the savings that you make mounting up over time. Any outlay for machinery or robotics will pay for itself and slowly turn into profit.

4 Tasks Your Small Business Can Afford to Outsource

Are you spending too much time on mundane tasks rather than actually operating your business? It’s certainly not uncommon for business owners today. In fact, as little as 15 % of them feel that they spend their time on the kind of tasks that will make their companies prosper — instead, they’ll be walking on the same tracks, completing the same processes, without really being able to grow.

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There is a way out of this for everyone, though, and the quicker you realize that you can’t do it all on your own, the easier it will be to focus on the tasks that really matter. Here is a neat list of the top processes a small business should have outsourced yesterday, making your week at work a lot more manageable — and clearing the space for growth and success.

IT Services

Unless you’re running an IT company, it makes little sense to dedicate an entire department to this. Most companies outsource these processes, by the way, as many as 53 % of companies — and 26 % of them plan to outsource it as soon as possible.

By relying on third-party vendors as well as cloud computing, you’re also making your company more flexible and will even benefit from the amount of knowledge an entire IT crew can provide you with. It’s a whole other story than a few employees in the office, stationed at their desks, and ready to help when they’re needed.

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Customer support

While some people may oppose to outsourcing customer support seeing that direct contact with customers is vital to building a lasting relationship, consider this first; small companies are often unable to hire dedicated customer support staff, forcing them to delegate it to some of their existing employees. This is bad for business in more ways than one.

First of all, the employee is unable to spend time on what they do best, making your company miss out on valuable productivity. Secondly, they won’t be as well-trained as an actual customer support agency which puts you at risk of losing customers.

Outsource this task while your company is still relatively small, let your team focus on their job, and hire professional customer support staff to be in-house when you’ve grown bigger. It’s as simple as that. Make sure you scrutinise your options, however, as the costs and quality may vary.

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People

When you’re still young and unable to pay for the kind of quality you’d like, hiring freelancers may be the best option. As many as three out of four small businesses in the US admit that the use of freelancers gives them a competitive edge; when the talent is there, but you can’t afford to hire it, you can simply put a contract on it instead.

The same goes for finding the next talents for your flourishing company, and a procurement recruitment agency is perfect for any new business as they can make sure you’ve got the best kind of staff on every level, right from the start.

Accounting

Every process that is repetitive and mundane both can and should be outsourced. Accounting and payroll are certainly one of them, but 60 % of business are still completing it in-house rather than just handing it over to a third-party.

When you can afford to treat yourself to a professional accounting team, it’s all well and good — but most small businesses lack this kind of resources, and choose to delegate it to an existing employee instead.

It’s perhaps a bit more cost-effective than outsourcing, yet the risk they run is way too big; when something goes wrong with the payroll or accounting system, everything tends to tumble downhill. It will cost your company quite some money in fines, you lose the valuable addition of team members who can focus on their job rather than accounting — and your employees will be very unhappy with you.

With the correct kind of software and a few tech-savvy workers, you can easily continue to do it in-house, though. Just remember that the software should be comprehensive enough to take care of all the processes without being too complicated for them to understand — otherwise, you end up spending a lot of time on training.

Keep in mind that, by outsourcing to a reputable company, your business is also gaining the expert knowledge and support of an entire team you didn’t have before. They’ll be able to give you that competitive edge, helping you to growth and success a bit faster.

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