To outsource or not? This is a question that all small business owners wrestle with, especially in an era where the emergence of lean startups and disrupters are making the prospect of gaining market share even more challenging.
You would be forgiven for believing that small businesses now relied purely on the internet for their whole sales cycle. But, depending on the business type, many consumers are still weary of purchasing online without speaking to a representative at any point during the buying process.
It therefore continues to be of paramount importance to have living people diligently handling calls, enquires and sales. These sales departments play a vital role as an extension of the brand and should not just be an afterthought in any planning.
So, do you hire and maintain a sales department in house, or outsource? Both approaches have their own unique advantages and disadvantages.
This point is at the forefront of every small business owners mind, as they attempt to produce the best product or service without overspending on the budget. Therefore, it is the main selling point of outsourcing your sales department.
- For a start, outsourcing is cheaper in the short term when you consider the cost in terms of extra office space and equipment. Extra employees will not only require computers and printers but sales department require specific items like Leitner or Sennheiser headsets or cloud software like Amazon Web Servers or Salesforce which add a significant cost. While rent prices in key real estate markets, San Francisco, continue to soar wildly out of control.
- Long term, you will avoid having to spend profits on hiring and training a full-time staff of sales representatives and managers, as well as not being required to pay employees for social security, taxes and vacation days.
- Outsourced teams are also easier to budget for. After you agree the fixed terms of your contract with the provider, there is a little other outgoing cost, making it very easy to budget your outgoing’s each month. Additionally, depending on your business, it allows you the option to only run your sales campaigns seasonally, in turn keeping costs down out of season.
Small business owners waste their time every year attempting to do other roles in the company rather than hiring expertise. If you imagine your hourly rate is $150 an hour and we spend even two hours doing something inefficiently, it starts to rack up.
- That’s why the major advantage of outsourcing is expertise. Going this route ensures that you are working with experienced professionals, who can ensure there is no lag time between strategy and implementation. This allows you to focus on your time and strengths for the good of the company.
- Whilst being experienced sellers, they also have extensive knowledge of working with different clients in varying industries. This knowledge is clutch in the sales environment as they are able to tailor their message to produce results instantly. from the outset.
For many small companies, the ability to be agile in competing against the bigger brands in their industry, is a major factor in their success; like Nordstrom or Boohoo competing against fashion megastars like H&M and Abercrombie and Fitch.
- If you prefer to adopt a hands-on approach to all aspects of your company, then hiring an in-house sales team will the better options for you. While more expensive compared to outsourcing the sales team, this approach has the key advantage of allowing your company to take advantage of being agile against the bigger brands. Once you hand any part of your company over to an outside agent, you lose a level of control over that part of the business.
- Additionally, by maintaining full control of your business in house, you will be in a better position to protect the brand’s image. It does not take too many pushy sales or unmotivated customer service calls to permanently taint all the hard work that has gone before. If you outline and ensure a high standard of conduct in your staff, it will lower the number of bad experiences and in turn increase the reputation of the brand.
As has been covered before, outsourcing allows the hiring of expert sales people quickly and cheaply. However, hiring in-house staff will allow the company to put a personal touch on it sales department.
- Compared to the outsourced sales teams, if managed and motivated correctly by managers, this workforce will not only be excellent at selling your products but become ambassadors for the brand. Being able to upsell products while smoothing over any customer concerns.
A Third Option?
As you can tell, there is no clear-cut answer. Depending on the priorities of the business owner there are several significant advantages for either approach. However, the third option that many small businesses and startups adopt, might be the perfect combination of both.
This allows the business to retain a small sales team to be agile to the changing needs of the sales strategy, while also ensuring there is a continuity for key leads. It also keeps costs down on a big workforce by outsourcing to an outside agent, but maintains the ability to run a full-scale sales operation for the larger or seasonal campaigns.