Why Outsourcing Attracts Investors
Published: December 10, 2018
Making your business attractive to investors is a daunting task. Keeping it that way is even more difficult. Understanding how your investors see their potential ROI is essential, especially as strategies evolve. Outsourcing can play a key role in helping to structure your company to look more attractive to investors.
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The trend for businesses to use outsourced administrative services rather than keeping everything in-house in growing. The fact is,the number of dedicated experts who can evaluate and understand the unique administrative needs of an enterprise in house is decreasing. Those that do remain have taken advantage of this demand and request high salaries and other compensations.This places a heavy burden on companies seeking investors.They need to ensure that shareholders feel secure and confident in their investment. Outsourcing can offer a huge benefit in this area.
For small companies, outsourcing can also create a more level playing field by enabling them to access the same high-level expertise that big companies can retain on their staff. The outsourcing partner takes care of staff’s benefits, vacations, taxes and hardware. None of this burden falls on the shoulders of the outsourcing company.
“The cost to attract and retain the right talent can be considerable,” says Jim Hutter, chief operating officer for JPMorgan,.
In addition, there is the time and cost of training, meanwhile core operations begin to suffer. The market will simply not wait for any business to get their administrative side in order. This could mean the difference in minimal returns and generating substantial gains. All of these factors weigh heavily in the opposition to invest in a startup or small business.
By doing a cost-benefit analysis to outsourcing, companies can determine their ability to control capital costs. By converting fixed costs to variable costs, reducing overhead and the freeing up internal resources to focus on core competencies, outsourcing makes an enterprise more appealing to investors. Once Cost savings and quality are realized, investors begin to open their wallets.
A Key Element To Any Business Continuity Plan
Continuity plans show investors that a company is prepared for anything that may occur. From power loss, loss of internet to natural disasters, a company must have a plan in place to ensure business will be affected as little as possible.
When outsourcing to a foreign shore, a company has doubled its chances. Should anything happen, like a natural disaster, the outsourced operations continue unscathed and the affected company will be able to rely heavily on the outsourced partner.
Lack Comprehensive Standards
Creating and maintaining a consistent process for administrative tasks is challenging. There is no one standard or framework for all processes for every enterprise. Each business will have their own set of standards which have been “tweaked” to fit their individual need.
An outsourced staff has a one-point focus and that is to execute and improve the process flow between back and front office operations. Flexibility and adaptablility are important assets a company enjoys with an outsourced staff. Since they will in no way be involved with any other part of the company, they will not lose sight of their assigned tasks.
Having this type of dedicated staff is appealing. Investors will see how streamlined the processes are making the core functions more stable and efficient.
It’s simple. If you want to attract more investors and scale up, outsourcing holds the key to freedom and success.