The U.S. Small Business Administration defines small businesses into categories based on industry standards. As of 2022, 30.7 million small businesses are spread out all over the continental United States. Known as the nation’s greatest asset, small businesses contribute to the economy towards the promise of growth and prosperity.
A report released by the U.S. Small Business Administration (SBA) states that small businesses generate 33.3% of known export value and 65% of new jobs, which accounts for 44% of the economic activity. While the longevity of small businesses is relatively short, only 50% survive within the first 5 years and about one-third of the remaining survive 10 years.
The importance of small businesses within the economy cannot be overstated, from their contribution to everyone’s livelihood and through the generation of valuable income for the government to fulfill its mandate through taxation maintains the economic hegemony of the United States.
However, as government regulations, high oil prices, and runaway inflation hinder the growth of this sector to maximize its full potential, small businesses should therefore look for cost-effective solutions to sustain profitability and avoid joining countless other businesses that failed within their first 5 years of operation. As this surge continues, there are options to consider for small businesses to undertake such as outsourcing their services through a third-party service provider that will cost less.
Although the future holds too much uncertainty to predict all that is bound to happen. Therefore, saving their limited and valuable resources needed for an unexpected economic downturn. Preparing for such circumstances may be the key to a successful small business venture.
Challenges That Small Businesses Face
A small business with a limited workforce and income faces multiple challenges as it progresses from a startup into its stage of maturity. As time passes, the degree of uncertainty increases in the form of rising competition among its fellow small businesses. Moreover, a capricious economic and political climate influences every business decision which negatively impacts business activities. Although those are external factors, they would still need to be considered. Whereas, the internal factors, can be controlled or minimized by small business owners.
Internal factors:
Lack of funds
Ready and available monetary resource determines an organization’s ability to adapt to changing business environment. Since an operation of a small business is relatively modest, this small-scale operation translates to a limited cash flow.
Lack of time
Small business owners have a lot on their plate, imagine juggling numerous tasks at the same time, which only a few will manage to accomplish such a daunting workload. More often than not, such tasks are not related to the core activities of the business. At the end of the day, work-life balance and mental health are at stake.
Trouble finding the right talent
Limited by geography and expertise in the recruitment of qualified talents to fill in the workforce, is a challenging prospect for small businesses. More often than not, the burden of recruitment falls on the purview of small business owners, it is likely that those small business owners lack the necessary tools and knowledge to source the competent talent they need. Ultimately, the wrong hire equates to poor performance of the business and, wastes valuable resources from the cost of recruiting, training, and compensating those individuals.
Outsourcing Solutions
For small businesses, outsourcing other non-essential processes to lighten up their workload, decrease the cost of operations, and gain instant access to a pool of qualified candidates is the way to go. At the same time, there are full-service BPOs that provide solutions to essential processes of a business by offering professionals, such as Tax Specialists, Angular Developers, to Virtual Nurses to name a few. There are indeed some solutions for small businesses to undertake. However, outsourcing is a tried and tested solution to drive down the cost of doing business.
Budget-friendly
Perhaps the most important benefit of outsourcing. Affordability of pricing to services attracts companies from far and wide, it saves them valuable resources such as time and money. Therefore, increasing their profit margin through a cost-effective third-party service provider. When it comes to small businesses, outsourcing various processes with a BPO partner will help them stay competitive in a saturated market.
Bespoke solutions
BPO companies offer customized services based on their client’s business needs. Depending on the budget of their clients, reaching out to a BPO to see if the service fits. This is important for small businesses because of their limited resources.
Global reach on quality candidates
Thousand of BPO companies located all over the world can source qualified talents at a fraction of the cost, rather than hiring onshore where it is limited and costs higher, outsourcing providers the best solutions to every staffing problem a small business may face.
The Bottom Line
To sum it up, the increasing number of small businesses is a promising sight for our economy. This simply means that outsourcing provides several benefits to small businesses to stay competitive and survive another day in this fast-paced environment. For small business owners, hiring a BPO partner would help your company save on cost, time, and energy.