You are here: Home / Archives for Company

Forget the Initial Savings: Offshore Outsourcing is a Long-Term Investment

June 9, 2011 By
Board meeting room 

Image via Wikipedia

Offshore outsourcing stemmed from a logical idea: if our company can hire offshore workers to do the same work for a fraction of the cost, why wouldn’t we outsource? How can we afford not to? Unfortunately, most companies see a bottom-line price and expect to start saving money right away. Outsourcing is a long-term investment, not a short one. Here are some of the expensive initial costs you’ll encounter:

  1. Severance Packages.
    Severance packages aren’t the only layoff expense you’ll encounter: you’ll need to keep plenty of employees on hand until the transitional period is complete. If you don’t offer retention bonuses as an incentive for employees to stay, they’ll leave the company at the first sign of a new job.
  2. Advisor and Legal Fees.
    Selecting an outsourcing vendor is a costly and lengthy process. You’ll need to draw up a contract and hire outsiders to make sure it holds water. Look out for any hidden expenses that aren’t included in the contract.
  3. Travel Expenses.
    You’ll need to travel overseas to see your new outsourced department. You’ll want to make sure it’s up to your company’s standards…and seeing operations in action will make it much easier to manage later.
  4. Low Productivity.
    Your company’s productivity will take a definitive nosedive. Employees have new job descriptions, you’re faced with a language barrier, and you’re working with people across several time zones. If a mistake happens, it’s going to take a lot longer to fix.

Offshore outsourcing may save you money in the long run, but it’s a costly investment filled with headaches initially. Be sure you do the math before signing the contract.

Filed Under: Business, Outsourcing Tagged With: , ,

Keep Your Options Open If Your Business Partnership Turns Out To Be A Success

March 16, 2011 By

Business partnerships between big organizations often take the shape of joint ventures and collaborative arrangements. The organizations decide to work together in a specific field for a specific period of time but continued to compete with each other throughout.

This often leads to a piquant situation where one set of employees are keen on promoting goodwill with the competitor while another set work their best to beat competition.

Theoretically speaking, such an arrangement should create more harm than good. At the end of the day, you will end up with different thought processes in your employees towards the competition.

Well, as long as you keep it a business arrangement and as long as you try to end up with a profit on your balance sheet, there is no harm in going in for such an arrangement. Profit should not be measured in money alone. If the business partnership works well, you may consider separating a branch relating to a specific activity and merging the same with the other organization at a good price.

For example, if you discover that your joint venture with another organization in a particular category of products has brought forth good reputation and credibility and has generated interest in the other organization; you can offer a stake in your company and earn a good price for the same.

You will lose the opportunity to earn more profits. However, you will get extra cash and can focus on other strengths of your company. Such decisions have to be made after analyzing the pros and cons. Profitability and money strength is important but long term growth for your organization means looking beyond mere profit

Filed Under: Business Tagged With: , ,

How to outsource effectively

December 20, 2010 By

Outsourcing is an important part of a business. It can become a hindrance to your company’s success or the secret to being effective. When outsourcing a task, make sure it is an activity your employees do not enjoy doing. If they enjoy performing those tasks, then do not stop them. This will ultimately hurt their overall performance. Get your employees feelings on outsourcing a task before you actually make the arrangement. Although you cannot make your decision solely on how they feel, getting employee input is often overlooked.

In addition, if the task requires a specific skill or knowledge in order to complete the task, it might be a good indication to outsource it. Before outsourcing, look at your employees’ skills to see if they can do the task, if not it would be practical to have an outsourcing firm pick up the task.

To outsource tasks effectively, you must have a clear list of expectations for the outsourcing firm you wish to collaborate with. When you outsource a task, you are giving control and supervision to another company. You need to make sure you have set clear standards and have communicated your expectations well. Consume a contract detailing your company’s agreement with the outsourcing firm. Regularly access the performance of the outsourcing firm to see make sure they meet your qualifications.

Make sure you schedule consistent meetings with the outside firm and have a set meeting time with the people you hire. This allows you to stay in the loop and stay updated. You should check up on problems and their progress. By doing so, you will know what changes to make with your business to make it more effective. You will want to have a backup plan to cover any emergencies and if your outsourcing company falls through. One good sample of this having backup records for your accounting service.

Filed Under: Business, Outsourcing Tagged With: , , ,

Why you should not outsource your company’s social media

December 15, 2010 By

Companies nowadays have to think about social media and their presence on the Internet. While this is a vital task, it takes a lot of time and effort aside from your day-to-day duties. Outsourcing your social media might sound like a good idea and a practical one at first because of how busy you are. However, here are some things to consider before you venture out into outsourcing your social media.

First, it is important to remember that the sole purpose of social media is to establish communication with your consumer or your customers. If you give this task to an outsider, you are defeating the purpose of social media. Outsourcing means you have someone else speak on your behalf to customers. Social networking can be viewed as a personal conversation between you and your customer. Think of it this way, you would not let anyone from the outside walk in and represent you at one of your business meetings or networking events. Avoid doing just that when you have an outside company handle your social media networks.

Second, your social media marketing must not be any different from your main marketing strategies. In fact, they must be similar and complementary. It is hard to be representative correctly and fairly when your online marketing is different from other type of marketing your company pursue. Most of the time, you do not have the time to thoroughly familiarize your outsourcing company with your detailed marketing strategies. If you are not consistent with your marketing strategy online and offline, you will cause more harm than when you do your own social media marketing. It is simply best to assign this task to your marketing team. They know your company and your marketing strategies by heart and will know how to communicate with your customers first hand.

Filed Under: Business Tagged With: , , ,

Advantages of outsourcing

December 13, 2010 By

The benefits of outsourcing change depending on the company and their needs. Different companies have different needs and because of this, each company must look at their needs to assess whether outsourcing is right for them.

Some of the benefits of outsourcing include the opportunity to use cheaper labor. By having an outside company do some of the non-essential and routine work, the company get to save money and energy. This translates to a lower operating cost. Also, because some work is being handed out to another company, the business can reduce training expenses and time. Instead of training their employees to do these tasks, they can rely on the resources of another company.

It is also important to note that outsourcing companies have a wider range of talents. They have connections to different skills. They have talent from different countries that can be fully utilized by businesses all over the world

Aside from having a broad range of skill, these outsourcing companies also have access to highly specialized talent and skills. They have people trained in skills other businesses will have problems finding. It is the firm’s responsibility to find the best and brightest of their field so they can help your company.

Moreover, they also have technology that can increase speed and efficiency that most businesses do not have. Instead of struggling and putting so much time and effort to finishing routine tasks, by outsourcing them to these firms they will be done quicker because of the technology they invest in.

By outsourcing tasks, your employees can focus on activities that directly affect your profits, competition, and performance. They can now put their full attention and skill into tasks that matter, while you save money by outsourcing. Because of this, it is important to understand the resources these outsourcing firms have and utilize them completely to help your businesses.

Filed Under: Business, Business Partners, Outsourcing Tagged With: , , ,

Why you should consider merging your business

December 7, 2010 By

Business merging is common in the life of a business. This is mostly done through synergy. By combining two businesses, activities of the business are brought together and are combined. This is done in hopes that the performance of the business will increase and the cost will lower. When one company wants to merge with another, it is important to choose a company that complements its strengths and weaknesses. It not advisable to have two very similar companies combines. This will not help any of the companies. It will not sustain areas that need help.

Sometimes, businesses want to be more diverse in their scope of business. Because of this, they merge with another business that is in a different field or specializes in a different craft. The company that is from a different industry can help widen the scope of the other company and vice versa.

Also, some businesses merge with other companies to have more market share. A soda company will buy a smaller soda company to have more customers that are loyal. The smaller soda company will greatly benefit from this because they will get to make more soda while keeping their clients.

Another way to increase market share by merging is by buying out the competition. When one company buys out its competition, then the company has more market share and lesser competition. However, companies do not always turn to their competition when they are looking for merging. This is not a common occurrence but one to watch out for.

A vertical merger is when one company buys out its supplier. By doing so, the company eliminates the extra cost in goods that an outside supplier adds to the value of supplies. Also, if a company buys out its distributor, then the company is able to manufacture and distribute its products at a lower cost.

Filed Under: Business, Business Partners, Mergers Tagged With: , ,

The components of a business plan

December 3, 2010 By
Business Plan Presentation at FSG 2009
Image via Wikipedia

A business plan does more than tell people about your company, it helps you form your company and keep it afloat. Better yet, a business plan helps you keep your goals and procedures in mind. There are three different components that a business plan does.

It is a communication tool. It gets people talking. It helps your company bring in money backers, secure loans with banks, convenience workers to join the business, and so much more. It is a strategy to get people interested in your company and its product. If people stand and build in your company, it will not only have product to send out but customers to purchase them.

It is a management tool. It lays a foundation for how the company is going to run and it helps you track your financial expenses, track your progress as a company, monitor your sales, and evaluate how you are doing as a company. Without this management tool, you would only have an idea for a company. The business plan keeps your company going. It will help your modify your expectations and milestones for your company. You can take your goals and purpose of the company and product and compare it to how you are doing. It helps you access the very essence of your company itself.

It is a planning tool. The business plan will be with you the entire length of your business. You will modify it as your business enlarges and merges. As you expand and create more product, your business plan is the first place you will go. If you use it correctly, the business plan can help you realize any problems with your product so that you can fix it. It will help you see any obstacles that could get in the way giving you time to plan around those obstacles. The business plan is journal of your company.

Filed Under: Business, Business Partners, Mergers Tagged With: , ,