Outsourcing To Boost Cash Flow And Grow Your Business

Even during the best of external economic conditions, outsourcing can help small businesses create cash flow for operating and growth initiatives. Currently, inflation in the U.S. has recently risen faster than at any point in the past four decades. That has caused the cost of just about everything to skyrocket. Of course, that means your B2B customers have less to spend on services due to the increases in their expenses. So, outsourcing bookkeeping, accounting, IT support, marketing, admin, and other functions may become an even more attractive option.
Here we’ll look at ways that growing pavement sweeping businesses can substantially increase their cash flow even during a time of severe inflation by outsourcing.

Defining Inflation

Inflation is the rate of decline in the value of a currency during a given period and the degree of impact the devaluation has on the consumer’s buying power due to escalating prices. For example, in 2022, the U.S. dollar has dropped in value, and prices have soared because producers of consumer goods are compensating for the devaluation and its effect on their own purchasing power. Many things contribute to inflation, but, generally, it’s the effect of the supply of money in the country increasing at a faster rate than the economy or of demand becoming greater than the supply can satisfy.

How Outsourcing Can Offset Rising Costs

While small companies are being so strongly impacted by inflation, cash flow can become so diminished that it can become too difficult to stay in business, much less achieve growth goals. Outsourcing enables many business owners to create a major offset of inflationary effects and dramatically increase cash flow. Sending a number of peripheral operations offsite can overcome the cash shortages brought on by extreme inflation.
Outsourcing can also help financially strengthen a commercial pavement sweeping business in many other ways. For example:

Achieves Deep Cuts in Your Overhead Costs

Of course, labor is the incomparably largest expense for most businesses. Having people on the payroll is far more costly overall than contracting. Plus, just the cost of having employees using workspaces in an office can be significant. Unless they are directly working on generating revenue, the cost vs. benefits of keeping them on staff vs. the benefits of outsourcing their roles should be carefully evaluated.

Streamlines Your Operations

For most small to medium-sized businesses, outsourcing is typically the most cost-effective way to use as little of their financial resources as possible and maximize the efficiency of non-core business operations like accounting, IT, marketing, AP, AR, payroll, HR, benefits management, etc.

You Only Pay For Services You Need

Work with the most well-established and highly reputable outsourced service providers. Those are the most likely to offer the customizable slates of services you need. That way, you can minimize your costs and scale those professional services as your business grows.

Brings Top Talent to Your Team

Most small to medium-sized companies are not yet financially able to offer the levels of salary or career opportunities that can attract and keep top talent, especially in functions that don’t involve the core skills needed to run your company. Outsourcing enables you to put top talent on your team affordably.

Off-Site Departments are Already Optimized

Professional services contractors feature the state-of-the-art systems and processes that growing businesses need to compete at the same levels of efficiency as their larger competitors that have such resources in-house. Outsourcing enables a small company to perform at the level of the best in the industry.

Access to Expert Insights for Business Planning

Outsourced professional services can provide a vast abundance of expert insights in the areas of your operations they fulfill. These can be immeasurably valuable advisors for strategic planning to achieve and maintain financial stability during severe inflation and in medium- and long-range planning for systematic growth.

Protects Your Business from Fraud Risk

Outsourcing is an ideal approach to minimizing fraud risk. By shifting the responsibility for various financial and information management to outsourced professional service providers, you protect your company from potential financial losses and extreme reputational damage that can result from fraud cases. Using an outside professional team places the responsibility for fraud prevention on the service provider.

Collects Your Revenues Faster

In a busy office of a small or medium-sized business, people tend to wear multiple hats. That means things may get done more slowly than at larger, better staffed, and well-automated companies. For example, outsourcing Accounts Receivable can get your invoices paid much faster on average. That frees capital for you to use in paying debts and/or investing in upgrades to increase efficiency in your core operations and more information for better planning. Those are the kinds of changes that promote growth and can accommodate scaled operations.

Outsourcing Can Be Transformative

Outsourcing as many operations as possible can change your cash flow situation and your overall financial position from the red to profitability, or from modest margins to significant growth. When it’s time to try something, outsourcing can be a comparatively safe thing to try. You can then evaluate what is working well and what else you need to change, and choose to outsource more or less of your operations as part of a broader strategic plan.
If you decide to try outsourcing AR, payroll, accounting, or other professional services, vet providers carefully before signing a contract. Check references from past and current clients, the BBB, and elsewhere. Check licensing, professional credentials, current liability insurance certificates, coverage amounts, and other pertinent information.

When you have your new, well-vetted, outsourced service provider(s) in place and delivering for you routinely, you are likely to find that your operations are more secure and more efficient. You’ll have the full benefit of expert service teams at considerably lower costs than you would pay for developing and maintaining such operations in-house.

Sources

https://www.entrepreneur.com/article/428037
https://www.forbes.com/sites/forbesbusinesscouncil/2022/08/03/inflationary-times-ways-to-use-outsourcing-to-help-your-business/?sh=2fc8608f96e9