Profitability Issues of Outsourcing - What Internet Marketing Starters Should Know
Outsourcing can be an excellent solution for your internet marketing business.
It is widely practiced today by many businesses and can form part of an effective strategic plan.
It is not, however, a perfect solution for everyone.
There are specific reasons why internet marketers use outsourcing.
For internet marketing starters like you, there are profitability issues you might want to consider.
Advantages of outsourcing Most internet marketing starters start their business on their own.
Many of these businesses have simple processes and will usually require only a single person as initial manpower.
This is if your business has simplified processes or the very nature of the internet marketing venture requires only the most basic components.
If you're a graphic designer or copywriter, for example, and have all the necessary equipment and software for the job, you probably won't have to outsource your processes.
However, you'll find outsourcing will come in handy if: -your business requires a specific task that you, an internet marketing starter, have no prior training, skills or background to perform effectively -you don't have the proper equipment or software for the job or process -hiring additional manpower may be too costly -the task is seasonal or temporary, for which you do not have time to perform -it's a non-core task and will be much more cost-efficient if it is performed by someone else A few examples of tasks you might want to outsource as an internet marketing starter are: -website design -website development -web content, copywriting and graphics design -marketing research -search engine optimization -online advertising graphics and interactive games -web analytics -content for e-newsletters, e-books and other media products -marketing development Profitability of outsourcing There are certain profitability advantages that outsourcing can offer to internet marketing starters.
Outsourcing has the potential to bring down cost and allow your business to increase its profits.
It also helps eliminate the cost associated with common business expenses such as employee salary, purchase of raw materials, warehousing and inventory.
It also helps reduce or totally eliminate the cost that problems such as wastage, pilferage, theft, incompetence, lack of training and even employee unionism might cause your business.
Disadvantages of outsourcing Outsourcing takes away the responsibility of management from the internet marketer and transfers it onto the outsourcing service provider.
Unless quality standards are in place, it can be difficult to monitor the processes involved in the creation or manufacture of the product.
To determine whether or not outsourcing is a profitable option for you as an internet marketing starter, there are certain factors you have to consider.
Some profitability factors you can expect include: Control of cost of capital Capital is a major expense in any internet marketing business.
This could easily set you back by a few hundred dollars to several thousands, depending on your business.
Website development, for example, can cost you from about $2,000 to $2,500 in equipment, software and man hours.
If you outsource the tasks to someone else, you could spend only around $800 to $1,000 depending on the type of project you want to complete.
What this means is that you could use the money you'll save and spend it instead for the development of your business.
Reduce labor cost Hiring staff can cost you.
Training them can cost some more, regardless of whether you'll only need them for a long-term or short-term project.
Increase your business' efficiency For internet marketing starters who work on their own, there's always the problem of ensuring efficiency in a job.
This becomes apparent when there are deadlines to meet and projects to complete.
This can translate to loss of productivity, which in turn can translate to expense.
With outsourcing, you can unburden yourself of some of these responsibilities.
Outsourcing providers have the right training, research facilities, manpower, equipment and experience in order to perform the tasks and processes you need performed.
This will save you in terms of research, product and service development, marketing, promotions and if necessary, even distribution.
The amount of savings you'll gain from here will then be passed on -- where else?To your customers.
You can lower your price, choose to produce products in bulk and attract more business.
Focus on your business Very often, what you want to focus on in your business can get sidelined because you need to take care of other things.
Your business, just like everything else, has a limit - time, resources, capital, skills, even your attention.
As an internet marketing starter, you'll find that you can increase the profitability of your business by outsourcing certain processes and focusing on what needs to be done.
It is widely practiced today by many businesses and can form part of an effective strategic plan.
It is not, however, a perfect solution for everyone.
There are specific reasons why internet marketers use outsourcing.
For internet marketing starters like you, there are profitability issues you might want to consider.
Advantages of outsourcing Most internet marketing starters start their business on their own.
Many of these businesses have simple processes and will usually require only a single person as initial manpower.
This is if your business has simplified processes or the very nature of the internet marketing venture requires only the most basic components.
If you're a graphic designer or copywriter, for example, and have all the necessary equipment and software for the job, you probably won't have to outsource your processes.
However, you'll find outsourcing will come in handy if: -your business requires a specific task that you, an internet marketing starter, have no prior training, skills or background to perform effectively -you don't have the proper equipment or software for the job or process -hiring additional manpower may be too costly -the task is seasonal or temporary, for which you do not have time to perform -it's a non-core task and will be much more cost-efficient if it is performed by someone else A few examples of tasks you might want to outsource as an internet marketing starter are: -website design -website development -web content, copywriting and graphics design -marketing research -search engine optimization -online advertising graphics and interactive games -web analytics -content for e-newsletters, e-books and other media products -marketing development Profitability of outsourcing There are certain profitability advantages that outsourcing can offer to internet marketing starters.
Outsourcing has the potential to bring down cost and allow your business to increase its profits.
It also helps eliminate the cost associated with common business expenses such as employee salary, purchase of raw materials, warehousing and inventory.
It also helps reduce or totally eliminate the cost that problems such as wastage, pilferage, theft, incompetence, lack of training and even employee unionism might cause your business.
Disadvantages of outsourcing Outsourcing takes away the responsibility of management from the internet marketer and transfers it onto the outsourcing service provider.
Unless quality standards are in place, it can be difficult to monitor the processes involved in the creation or manufacture of the product.
To determine whether or not outsourcing is a profitable option for you as an internet marketing starter, there are certain factors you have to consider.
Some profitability factors you can expect include: Control of cost of capital Capital is a major expense in any internet marketing business.
This could easily set you back by a few hundred dollars to several thousands, depending on your business.
Website development, for example, can cost you from about $2,000 to $2,500 in equipment, software and man hours.
If you outsource the tasks to someone else, you could spend only around $800 to $1,000 depending on the type of project you want to complete.
What this means is that you could use the money you'll save and spend it instead for the development of your business.
Reduce labor cost Hiring staff can cost you.
Training them can cost some more, regardless of whether you'll only need them for a long-term or short-term project.
Increase your business' efficiency For internet marketing starters who work on their own, there's always the problem of ensuring efficiency in a job.
This becomes apparent when there are deadlines to meet and projects to complete.
This can translate to loss of productivity, which in turn can translate to expense.
With outsourcing, you can unburden yourself of some of these responsibilities.
Outsourcing providers have the right training, research facilities, manpower, equipment and experience in order to perform the tasks and processes you need performed.
This will save you in terms of research, product and service development, marketing, promotions and if necessary, even distribution.
The amount of savings you'll gain from here will then be passed on -- where else?To your customers.
You can lower your price, choose to produce products in bulk and attract more business.
Focus on your business Very often, what you want to focus on in your business can get sidelined because you need to take care of other things.
Your business, just like everything else, has a limit - time, resources, capital, skills, even your attention.
As an internet marketing starter, you'll find that you can increase the profitability of your business by outsourcing certain processes and focusing on what needs to be done.