Profit Minded

Three Reasons that You May Want to Consider In-sourcing

inhouseBy Carol Roth

In today's lackluster business environment, small businesses are focused more than ever on ways to improve their companies. This has led to a trend of in-sourcing- bringing back functions in house that used to be outsourced.

Here are three reasons that you may want to look at in-sourcing business activities.

Cost: The top reason that many businesses are now in-sourcing is cost. Many entrepreneurs that previously were looking to save time are now looking to save money. This may mean firing your bookkeeper and instead, purchasing software like Quickbooks to streamline your accounting and invoicing. It also means evaluating savings for other business functions. A company I work with, Fellowes, has a nifty tool called the Savings Analyzer at savingsanalyzer.fellowes.com that lets you see how much you can save on in-sourcing functions like records storage, document shredding, presentation binding and finishing. Hunter Rich, a VP and General Manager at Fellowes, says that small and medium sized businesses are the most likely candidates to generate significant cost savings from in-sourcing.

Convenience: Sometimes, bringing a business function back in house can be more convenient. For example, keeping your records offsite can mean a delay of hours or days if you need to retrieve them. If someone in house learns basic picture retouching skills and a software program like Photoshop, you may be able to quickly retouch a photo or other artistic collateral without having to wait for the turnaround from your graphic designer. This extra control and access can be invaluable. As Rich says, "it may actually end up saving you time to print, bind and finish a presentation on site than having to take it to the local copy shop".

Control: Data security is more important than ever, and even with reputable firms, you may add a layer of risk into your business by outsourcing functions. For example, by doing more billing and accounting in house, it minimizes the number of people with access to your financial records. If you handle customer credit card information, it may help you to become PCI compliant.

Additionally, desk-side shredding can be significantly more secure than putting sensitive materials in a central bin to have them shredded offsite.

Hunter Rich estimates that only 7% of businesses are aware of the benefits of in-sourcing, so take a look at your business functions where you hire outside contractors or use outside services and decide if you can bring that in house to save money and/or time, or to have better control over your business.

Carol Roth (Twitter: @CarolJSRoth) is a former investment banker & bestselling author of The Entrepreneur Equation

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