Outsourcing non-key tasks can be vital for a small business

As a business owner, you probably know you must consider your payroll taxes and withholdings to be sacred. I have seen more than one entrepreneur get into trouble because they have used these withholdings for business purposes. Of course, when you do this you have no protection from the government, and any corporate veil you expect to hide behind will be pierced.

Because of the risk associated with submitting incorrect payroll information, we have always elected to outsource our payroll to a professional payroll service. I love the comfort of knowing that our payroll is being taken care of in a timely and correct manner.

While payroll was the first process we outsourced years ago, we have found there are a lot of business functions that we can (and have) successfully outsourced. If a process or a function is not within your business' core competency, then there is an argument to outsource it. This will allow you to focus on those things that give your business a competitive advantage. You can outsource the functions of human resources, recruiting, advertising, product fulfillment, network administration, sales and bookkeeping, among others.

As a small-business owner, outsourcing business processes may offer several benefits. Following are a few of the main benefits you may want to consider, in no particular order:

First, you can save money by outsourcing. For example, you may not have the need for a full-time employee to run your computer network, and you may not have the skills to do it yourself. As such, outsourcing your IT needs may be a very inexpensive option relative to hiring an IT-focused employee.

Second, a good outsourced partner will likely have much more knowledge about a particular business function than you do, especially if that function is ever-changing. For example, we recently hired an employee in another state. This particular state required additional payroll withholdings and forms. Our specialized outsourced partner had no problem activating new accounts and modifying our payroll process. Frankly, it would have taken us more time just to research the requirements, let alone actually setting up the new state accounts.

Third, and somewhat related to the second benefit, an outsourced partner gains experience from a variety of customers. We have found that problems often can be solved more quickly because an outsourced partner has seen it before. The knowledge an outsourced partner can transfer from a cross-section of clients can be extremely valuable.