Six Services Every Scaling Small Business Should Outsource

Are you spending too much time managing operational logistics instead of being front and center in growing your business? You’re not alone. Less than 15% of business owners and managers feel like they’re spending their time on the right activities. But, as costs and competition increase, it’s time to ditch the “I can do it all myself” mentality and offload those onerous back office tasks.

Less than 15% of business owners feel they’re spending their time on the right activities.

While every business is different, here are six services that make sense to outsource.

1. Information Technology (IT)

A 2014 Deloitte survey found that 53% of companies outsource at least some of their IT functions; another 26% plan to do so in the near future. In addition to cost savings (which can be as high as 40%, using outside vendors or cloud solutions to manage your IT functions makes you more agile as a company and provides flexibility as your business grows.

2. Accounting/Finance

Payroll is the most commonly outsourced service, yet 60% of small businesses still handle this function in-house. Handing this task off to the experts has been shown to decrease costs and increase compliance. Companies that outsource payroll save 18% over businesses that tackle it themselves.

60% of small businesses still handle payroll in-house.

Furthermore, the IRS estimates that 40% of small businesses pay roughly $845 per year in penalties for late or incorrect filings and payments. Sales tax can be equally burdensome. Aberdeen Research Group estimates that small companies spend 24 days per year manually managing sales tax compliance at a cost of around $22,000. Face an audit and this cost increases four-fold. Online services and automated software can reduce this risk and save you a bundle in the long run.

3. People

Three in four U.S. small businesses say hiring freelancers gives them a competitive edge. One-third of Americans are now opting to freelance, contract or consult, which means there is no shortage of skilled labor for hire. Utilizing freelance and contract workers gets companies talent they likely couldn’t afford otherwise. Virtual assistants are also a hot commodity, with affordable admin experts a mere click away. Outsourcing allows your business to scale staffing needs according to seasonality or project. Just be sure to follow protocol for properly classifying workers to avoid IRS scrutiny and possible penalties.

Three in four U.S. small businesses say hiring freelancers gives them a competitive edge.

4. Marketing

Ecommerce and social selling has made online marketing, web stores and social media more vital than ever for small businesses. But, for most, it isn’t financially feasible to have full-time PR, social media and web design functions in house, nor is it the best use of resources. A survey showed that small business owners spend roughly 33 hours a week on marketing activities. A high number (76%) of this group reports having insufficient time in the day to get everything done.

5. Logistics

As a retailer, outsourcing logistics frees up time to focus on selling and merchandising. Having fulfillment, warehousing and delivery activities handled by third-party providers not only lowers overall spend, it helps improve customer service. These providers are experts in what they do. So they can respond quickly and scale to meet demand easier than you can.

Which fulfillment, warehousing and delivery activity providers you use depends heavily on your business size and what type of products you sell. Let us know in the comments which apps or integrations you are using and why they work, or don’t, for you.

6. Customer support

For smaller organizations, having trained or dedicated customer service staff isn’t always a viable option. This often means office staff or salespeople have to handle this function, dividing their time between getting new customers and keeping the old ones happy. Outsourcing to a contact center can give you that extra manpower to handle those customer calls. However, business owners should carefully weigh their options as costs and services vary widely. Cloud-based services or shared-agent solutions may be more affordable options.

Outsourcing can save you between 30% and 50% over employing full time staff.

Outsourcing can be a smart strategy for extending your capabilities as an organization while keeping a focus on your core competencies. One of the best examples of cost savings is utilizing freelance or contract workers — saving you between 30% and 50% over employing full time staff. Also, don’t discount other advantages such as lower risk, better compliance and greater control over resources. Most importantly, outsourcing allows you to refocus your priorities as a business owner or manager and avoid wasting time, money and talent (including your own) on activities that could be better handled by an expert outside your organization.

Smooth Scaling: How to Choose the Right ERP Platform for Your Growth Goals

When it comes to selling in a multichannel environment, access to real-time data is no longer an added bonus — it’s a table stake. And, thanks to the visibility that comes from cloud services, business of all sizes can update featured products on the fly or prepare themselves for sudden inventory demand without breaking a sweat.

Enterprise Resource Planning (ERP) systems bring all of this data to one place, making decisions easier and, ultimately, increasing the bottom line through more efficient business operations. And, with the added benefits of data security and easy access from any device, the value of ERP systems speaks for itself for those looking to take their business to the next level.

ERP systems combine disparate data to help to optimize the decision-making process.

Of course, business solutions are not always one size fits all. To choose the best ERP platform for your business, it is important to evaluate your current needs through the lens of your projected growth. Below, we’ve gathered some tips to help you choose the right ERP for your business.

Consider Your Needs

The decision to move to an ERP platform is often prompted by outdated or no longer supported technology. While this is definitely a motivator, don’t let urgency be the driving force as you choose between providers. Instead, look at what you’re trying to achieve in your business. It’s likely that your needs have changed. In order to make a holistic decision for your business’ unique needs, weigh each of these factors:

1. Scalability: Choose a solution that is upgradeable and adaptable to grow with your business. Although all of the features may not be applicable right away, you’ll be thankful you picked a provider with ample options in the future. To make updates easy, ensure you have the option to turn on/off functions and features as you need them.

2. Efficiency: Look for ways to improve business processes across all areas of your business from managing finances to customer service to vendor relations. Ensure important data is easily accessible and that you can benchmark progress through robust reporting and analytics. Once you have access to these real-time numbers, you’ll be able to make faster, more data-based decisions to grow your business.

3. Deployment: ERP platforms are meant to make running your business easier, not more difficult. Get away from customization, which can bog down resources and delay launch. Stay on schedule with pre-built, pre-certified solutions that integrate easily into your ERP.

4. Risk: Look for solutions that follow best-in-class business continuity, reliability and security protocols and that help you improve compliance and reduce risk in all areas of your business.When it comes to building your business on the cloud, there is nothing more important than keeping your and your customers data secure. Cost: Choose a platform with a predictable cost model to help keep you on budget. Cloud-hosted ERPs and subscription or usage-based pricing are affordable options and offer the most flexibility.

Make Integration a Priority

A properly deployed ERP system can handle your business activities with a high degree of accuracy and reliability. However, integration is critical. Implementing new systems can result in data fragmentation, with transactional and customer information getting moved or lost.

Choose an ERP solution that is upgradeable and adaptable to grow with your business.

Take the time to understand how your partner and third-party solutions work with your new system and choose ones with a solid track record of service, performance and ease of integration to make the migration process as smooth as possible. Your ERP should also allow you to increase functionality as your business grows and adds new partner services, such as order and payment processing, inventory management and email marketing.

Don’t Forget about Sales Tax

Don’t overlook transactional tax compliance during ERP implementation. Remember, sales tax misconceptions can have a major impact on your business, including compromising sales conversion and customer service or triggering an audit. Many ERP systems have built-in functionality to handle transactional tax, but can be basic and often require manual effort.

Better yet, streamline your compliance with an automated sales tax management solution to achieve accuracy and ease of use. With Tax Powered by Avalara, all Bigcommerce merchants get accurate sales tax rates using Avalara’s industry-leading calculation engine.


Online Sales Tax: How to Tell Fact from Fiction & Save Your Business from an Audit

Think sales tax is just a rate? If you sell online, think again. For traditional brick-and-mortars, setting up sales tax is as easy as following your local jurisdiction’s tax laws. For online businesses, the process is more complicated: where your customer physically is when they are buying your goods matters to your overall rate.

Simply put, nexus laws require online businesses to collect state and local taxes if your business has a physical presence — whether it’s a store, warehouse or office — in that customer’s state. On the other hand, if your business does not have a physical presence in a state, you do not have to collect sales tax –– at least for the most part.

When it comes to calculating online sales tax, there are always exceptions and complexities. Don’t fall prey to common misconceptions around compliance. Here are five tax myths that could trip you up if you aren’t careful.

FICTION: Sales Tax is Just a Rate

FACT: Sales tax is complex and error-prone

Managing online sales tax compliance includes knowing which jurisdictions require you to collect sales, tracking changes in rates, rules and boundaries, understanding product and service taxability and substantiating exempt sales. With more than 12,000 taxing jurisdictions and 9.9 million product taxability rules in the U.S., that’s a big undertaking. It’s easy to make a mistake if you’re trying to tackle this manually.

FICTION: Automation is Only for Big Companies

FACT: Companies of all sizes can automate affordably

Most small companies manage sales tax by downloading rate tables, visiting state websites, plugging numbers into invoices, determining exempt sales and filling out complex tax return forms. Wouldn’t you rather be using this time to focus on sales instead of sales tax? Automated cloud solutions scale with your business and tax requirements. Look for a provider that integrates easily into your existing accounting system for fast, easy deployment and one that offers usage-based pricing, which is more affordable for smaller merchants.

FICTION: Audits Aren’t That Expensive

FACT: Audits can cost more than $90,000

If your company fails an audit, you won’t just be liable for unpaid taxes. It’s likely you’ll accrue penalties, fees and interest associated with under-payment. This adds up. Should the auditor come knocking, reduce your risk by having complete, detailed transactional data readily available.

FICTION: I Can Handle Sales Tax on my Own

FACT: Managing sales tax manually puts your business at higher risk

The days of DIY tax management are over. Even an accountant or finance manager may struggle to handle compliance manually given the state’s penchant to change rates, rules and regulations on a whim, not to mention the increased complexity triggered by expanding your business or starting to sell online. Automation frees up your resources and protects against audit risk. It’s exponentially easier to ensure correct handling of product and service taxability, jurisdictional assignment and exempt sales when it’s automatically done for you.

FICTION: Sales Tax Doesn’t Impact me or my Customers

FACT: Getting sales tax wrong can ruin your relationship and reputation with customers

Customers expect to be charged the right price for the right product in a timely fashion. If there is wide variation between the listed price for an online product and the final charges at checkout or upon receipt of invoice, for whatever reason, customers might not come back. In fact, of the 67% of shoppers that abandon online shopping carts, 41% of those do so for unexpected costs at checkout. Close those sales by ensuring your sales tax is visible and accurate from the get go.

It’s time to dispel these myths and get the real story on compliance. When you separate fact from fiction, it’s easier to streamline processes, protect your business and improve your bottom line.

Matthew Grattan – bigcommerce blog