If you are starting a new business and are worried about your overheads you should explore the possibilities of outsourcing some of your services. This increasingly popular solution is of benefit to anyone who wants to minimise their expenditure on labour and equipment costs in order to promote and develop their products.
After you’ve taken factory or office rent into consideration and you’ve also paid for your insurance and essential transport and equipment costs, there often isn’t that much money in the pot to employ full or part time staff. One option is to advertise for the service of freelance contractors, but interviews and skills assessment can be a time consuming process. An increasing number of employers use temporary job agencies to source their staff. This process allows the employer to avoid all the expense of sorting their PAYE and National Insurance contributions. An agency will take care of all of these costs and will assess and interview the prospective temporary employees. Another benefit of this process is that you can road test a potential full time employee, for the time when your business is up and running.
Some industries employ a transient workforce due to the nature of their business. Those who organise exhibitions, (in a similar way that the organisers of the 2012 Olympics had to) have to source accommodation for their employees and will look to the rental market for accommodation. Short-term lets can prove to be expensive and furnished flats especially can cost a fortune, therefore many employers will be anxious to find the best furniture hire in London in order to keep their costs in check and to ensure that employees were housed in pleasant surroundings. This type of rental will allow any employer to furnish a flat for a fixed period of time and then return the furniture at the end of the contract.
You can even outsource your office. Some small businesses cannot afford to maintain the expense of a full time physical office and have moved to the virtual world. Many outsourcing companies will now offer a company address, a reception service and other basic office facilities so that a small company can appear professional at all times without having to go to the expense of renting an office space for themselves. This is a cost effective way of keeping administrative expenses in check and allowing the productive side of the company to develop. Obviously, once the business is proving to be a success it will be more cost effective in the long run to take over this expenditure for yourself.
The Long Term
A new business is always a risky venture. You’ll need to promote your business and if you are manufacturing a new product you’ll have to take this essential expenditure into account. If you separate the core business costs from the ancillary and support tasks you may find that outsourcing will allow you to reinvest your capital into your product while staff and administrative costs can be adjusted. This procedure will help you deal with a fluctuating marketplace and also allow you to continue to grow your business.