There's More To Running A Business Than Money
You have to learn how to practice patience and determination
. After all, positive cash flow doesn't come easily. You also have to increase talent in your organization if you hope to compete aggressively in your chosen market and industry.
Don't milk your profits from day one, you need especially in the early days and even years to reinvest between 60 and 80% of your profits back into your business to make it work, and that depending also on the amount of the original investment that you put in.
There are great benefits when you outsource your work.
I know that there will be some people who will be raising their eyebrows by now, and I really don't have to write down the criticisms that this business strategy receives from different industries. However, if you learn to look at the situation in finer detail, you will realize that outsourcing can mean lots of savings, flexibility, mobility, and convenience for business owners, particularly those who are just starting out.
By definition, outsourcing is transferring the execution, and sometimes the management, of certain business aspects to third parties. Normally, the provider and the supplier enter into an agreement that outlines the method of transfer of these services, the nature of the services, and the mode of compensation. Nowadays, there's hardly any aspect of business that you cannot outsource.
There is, however, a common misconception that's related to outsourcing. Often, people believe that companies outsource their products and services to other providers, especially those located in other countries, simply to take advantage of the lower labor costs - that is false. After all, in the end, the goal of every successful business is to come up with something that is of superior quality. Lower labor costs will only be a short-term agenda. The truth is that companies are willing to outsource certain aspects of their operation, and even highly important ones, if they foresee that other individuals will be able to do the job much better.
Outsourcing also helps in the expansion of the business. This is especially true when a small company suddenly experiences a boom in their market share. It would very difficult for them to cope with the increased demands, even if they have the machinery and the money to do so. With outsourcing, companies can reach out to additional manpower that they need, especially because these people are already established in their field, and there is no need for the company to provide extensive orientation to the new workers. The provider, furthermore, can forego training and other development programs.
There's also greater mobility for both the firm and the supplier. They can enjoy flexible hours and work in different areas and still produce the desired results. Along the way, the business owner will be able to cut down on fixed costs and other expenses associated with operating their business in the traditional way.
Moreover, outsourcing can provide managers with the back-office support that they need whilst lowering the expenses incurred by their businesses. Backend operations are still expensive, more so when you're trying to specialize in a niche of your industry. However, you cannot let go of them for the simple reason that they are crucial to the performance of your company. Back-end functions such as accounting and administrative tasks are just as important as front-end functions such as sales and marketing. When you outsource these activities, you will have the opportunity to focus more on the core competencies of your business while the third party, or the supplier, smoothly manages the operations of your back-office support.
by: Lawrence Perry
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