When should you outsource and when should you hire internally?

By Jennifer Barnes, CEO of Optima Office, a company that provides fractional CFOs, COOs, controllers, and HR professionals for businesses.

Business leaders are usually experts in their company's primary product or service, whether it's cooking the perfect burger or creating innovative technology. For these key differentiators, the elements of your business around which you've built your brand, it makes sense to hire internally to fill these roles. However, for work performed within your company, such as back-office accounting, IT, marketing or HR, in which you may not be an expert, it usually makes sense to outsource. these skills to a company that specializes in them. Let's talk about when it's time to outsource and when it's best to hire in-house.

When you're going to hire an HR specialist for your business, what types of technical questions will you ask? Do you even know what you need help with? You may have major blind spots and not know the right questions to ask or the right things to look for. If not, outsourcing is probably a good choice for your business. It's important that you can focus on growing your business and developing your core offering instead of trying to do things that are outside of your area of ​​expertise. There's definitely a better use of your time than researching new rules or regulations.

Another sign that it might be time to outsource is the size of your business and how fast you want to grow. Small businesses looking to hire in-house for accounting, for example, may attempt to hire a single person to fill multiple roles within accounting, from entry-level accounting to high-stakes financial strategy. This means either you pay a C-level employee to do routine, easy tasks like bookkeeping and data entry, or you expect a junior person to handle complex financial tasks that they don't. will not be able to do. A CFO has that title for a reason, and it's not because they're good at data entry!

Before making a decision, ask yourself if you really have 40 hours of work at one level. If you need 20-30 hours per week at a level and in a role, it's usually better to outsource that role than to pay 40 hours and only get 20-30. You want the right person do exactly what she is good at. .

During periods of rapid growth, business owners often focus on scaling their business to meet demand and shifting resources to their product or service. While you can focus on delivering a high-quality offering and building customer relationships, these are some of the most important times to have solid finances in place. Managing cash flow can actually be more difficult during times of strong growth, and timely accounting is essential to growing your business.

Having an outsourced accounting team that can help you scale as your business grows ensures you have the right resources you'll need to have accurate and timely financials without having to to take your eyes off your product or service. The same goes for any other outsourced service. You want marketing experts to help you with marketing strategy, social media and PR and you want HR experts to help you with risk and compliance.

Although some may think of "abroad" when they hear the word "outsourcing", there are many US-based companies that offer outsourced services, even local companies that might be in your neighborhood! The advantage of local outsourcing is that you can have your split hires onsite when needed. They also understand the local market and regional regulations. Just because a person is fractional doesn't mean they can't be long term.

When growing a business, it's best to focus on what you're good at and leave all the back-office tasks to those best suited to handle them. For anything high-level, like strategy and forward-looking forecasts, use split frames to help you make those decisions. Having another adult at the table can only benefit you in the long run. Outsourcing and using split services can help you properly scale your business with specialized talent and further reduce fixed overhead.