Outsourcing vs. Insourcing: What’s Right for My Business?

Outsourcing vs. insourcing is a debate that commonly appears on startup discussions forums. It’s usually a choice between highly specialised professionals and less-qualified but still competent staff that can grow alongside your business. However, that’s only when it comes to employees and services. What about outsourcing factory production or keeping it in-house?

There are many tough decisions to consider when deciding between outsourcing and insourcing, but here’s a short guide on the major differences and the appropriate situations for each one.

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Legal Teams

Hiring an in-house team of lawyers and solicitors can be beneficial because they’ll understand every facet of your company. As with any employee, the ability to grow together with your business means that they’ll have a better understanding of how your company works and the legal situations that could arise. However, hiring a legal team can be extremely costly and doesn’t make sense unless your business regularly takes part in legal disputes. You’ll also be stuck with the same lawyers unless you hire more or fire some. It’s impossible to have a single lawyer that understands everything about law—the subject is just too big and you always have to specialise.

Outsourcing means you won’t have to worry about salaries, but you do need to consider what kind of lawyer you need. Whether it’s a general firm like Slater Heelis Solicitors or an attorney that specialises in criminal charges, there’s someone out there that will be a perfect fit for your case. Unfortunately, finding that perfect lawyer is a time-consuming process and it might be too late by the time you find them.

Production

Unless your business can afford to purchase a factory, then you almost certainly have to outsource production. Constructing or taking over a factory is an overwhelming task that requires a lot of attention and research.

However, if you are able to own a factory then you’ll be able to control every detail of the manufacturing process and you’ll even be able to accept manufacturing orders from other businesses to gain extra income if your factory is large enough.

IT Teams

Setting up computers and networks is a specialised task. While anyone can simply buy a computer and hook it up to a power source, networking those computers and setting up file storage and sharing is a different matter. It makes sense to have an in-house tech team if things break regularly, the network fails on a regular basis or the use of computers is particularly important to your business.

However, if you just need someone to come into your business to set up a network and a couple of no-thrills computers, then it makes more sense to just outsource it so you aren’t paying someone a salary to work for a couple of hours a day.

Basic tasks such as replacing keyboards, restarting servers and sharing files shouldn’t need a dedicated tech specialist to do. It would be much more cost effective to train your employees in basic IT skills and have them manage most of the IT tasks. But if your business is large and hosts hundreds of employees and computers, then having an in-house IT team is a must.

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