You have a great business idea that you’re ready to turn into a real business. However, you don’t have the technical skills to build the first version of your product, you don’t have the design skills to create a brand, nor do you have the marketing skills to bring it to consumers.
Moreover, you only have your personal saving to get your idea off the ground with no other outside funding from friends or family. Bringing on an experienced CTO or CMO to give you key talent is out of the question.
With all these constraints, how do you start to build your business?
Fortunately, today, you can partner with a number of organizations that have specializations across business areas. Outsourcing, especially at an early stage, can be critical to getting the right expertise you need. It can also save you important time and money, all of which can make or break your startup. Here are key functions where outsourcing can give you competitive edge.
When you have a great idea, but you don’t have the technical skills to build it, where do you start? Most entrepreneurs will tap their network to see if they have a friend or acquaintance who might want to join to build out the first version of your product.
At an early stage though, it’s challenging to convince a talented person to leave their job for something unproven. Even if you find someone to help on the side, without a dedicated effort, it may slow you down or quality may be compromised.
Instead, you can pursue no code options to build an initial version of your product, or you can work with outsourced technical agencies. Companies like TopTal can staff experienced engineers for you to build a prototype.
While working with an outsource technical partner may seem expensive, it can save you considerable time, and is likely more cost effective than building out your own engineering team. Once you have a product, you can prove if it has product market fit, get funding, and then recruit a team to pick up where your development shop left off.
2. Finance and Accounting
Unless your startup is blessed with a product that flies off the shelf from day one, most of your finance and accounting needs will revolve around payroll, taxes, and keeping a watchful eye on your company's bank account. But every moment that you spend on those tasks is a moment you're not spending driving your startup forward.
That's why accounting and finance is an area that's good for outsourcing as early as possible. Startup-centric firms like myStartUpCFO and AirCFO can provide your business with as much or as little support as you need, from bookkeeping to accounting to forecast and planning.
If you can get in the process of delegating to an outsourced CFO from the get go, you can focus on what really moves the needle for your business.
Outsourcing marketing can be a differentiator at an early stage. Unless you happen to be a marketing expert already, you’ll likely spend a lot of your startup's precious capital on marketing and have very little to show for it. You could easily spend a meaningful portion of your capital trying to learn, optimize and target Google or Facebook ads. On the other hand, you can work with a marketing agency who has already developed the expertise on how to successfully run marketing campaigns.
Companies like Supple have a great track record working with startups. Their CEO Hardy Desai explains, “We work hard to help startups make the most out of every marketing dollar. We know just how hard it can be for an early-stage venture to get noticed. We were there once ourselves.”
It’s important too to find a marketing agency that meets your specific needs, whether it be bringing a product to market or exploring new marketing channels. Simon Brisk, who runs Click Intelligence, regularly helps startups at various stages. He explains, “We've handled startup product launches, brand building campaigns, and even reputation management efforts. We specialize in getting startups the attention they need to grow.”
It’s easy to rationalize that there is no need to spend a premium on marketing dollars when you can easily access advertising platforms yourself. However, they’re complicated, and marketing agencies have spent millions of dollars in marketing budget to build their expertise. The premium you pay to access their expertise can save you time and meaningfully improve your return on investment at critical stages of your business.
4. Human Resources
Once you begin hiring employees, there are a number of HR responsibilities you need to take on, including setting up payroll, employee contracts, workers compensation insurance, 401Ks, and health insurance among others.
When you’ve never done this before, it’s hard to know where to start, and it can be a considerable drain on your time. Do you want to spend your time reading up on employment law or focus growing your business?
When you first start hiring employees, consider solutions like Zenefits to help streamline your HR work. Alternatively, fully-outsourced solutions like the one offered by TriNet allow you to connect with an HR professional to make sure you properly hire, fire, and manage employees.
When you’re hiring a team, a specialized recruitment agency may be helpful as well. They can save you time and help you find great talent which can more than make up for the costs involved.
Having a reliable outsourced HR partner can help you scale at an early stage while doing HR the right way, preventing future liabilities.
Don’t go alone
When you're starting a business, it’s a race against time. You want to prove product market fit as fast as possible to either help you further fundraise, or to make a profit.
At the early stages, it’s difficult and expensive to find an in-house team to help materialize your vision. Instead, working with specialized agencies from tech, to finance, to marketing can help you get your product to market faster and more effectively. If you try to do everything yourself, it can take much more time and reduce your chance of success.
Eventually, as you prove your business model, you can take these functions in house. Getting experts in these areas who are dedicated to your business can lead to the next level of growth. In the meantime, stay focused on proving your business can work by partnering with the right organizations. It may give you the competitive edge that makes or breaks your success.