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On Small Business
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Posted at 06:15 AM ET, 03/06/2013

Small business advice: Which tasks to handle internally and which to outsource to experts?

Every other week, On Small Business reaches out to a panel of young entrepreneurs for answers to some of the most pressing questions facing small business owners. The following responses are provided by members of the Young Entrepreneur Council (YEC).

Q: Which tasks and services does your company handle internally and which ones have you found are more effective to outsource to commercial service providers with specialized expertise?


(Jeffrey MacMillan - JEFFREY MACMILLAN FOR WASHINGTON)

Guillaume Gauthereau, CEO and co-founder of Totsy in New York, New York:

“We outsource payroll 100 percent, as there is no added value to keeping this in house. Our inventory management and shipping are also outsourced because scaling in those areas would be too resource intensive, potentially risky and take away from our focus on scaling a part of the business that cannot be outsourced — purchasing.

For marketing, customer service and technology, we support our in-house teams with outsourced partners to create comprehensive solutions.

On the marketing side, member acquisition and PR duties are outsourced, because such agencies’ businesses are built on providing cost-efficient access to traffic. However, conversion, retention and social media are so specific to our business and member base that management is best entrusted to our internal team, because we need to maintain a consistent voice and personal approach with our customers.

Related: How small firms can land corporate clients

With customer service, our team manages queries during office hours as well as any queries that require more involved assistance. We outsource support overnight and on weekends for basic queries, which allows us to keep costs down while maintaining consistent service.

With technology, our platform’s core functionalities and debugging are managed internally. Any large projects entailing new development or new platform integration are managed by an outside consultant, which enables us to complete changes without making significant and disruptive staffing changes.”

Corey Blake, president of Round Table Companies in Highland Park, Illinois:

“Our company handles marketing on our own (it makes sense for a storytelling company), and we split the other responsibilities with a distributor. They handle 80 percent of our shipping, payment processing and inventory management. We completely outsource payroll to ADP.”

Shradha Agarwal, Founder & Chief Strategy Officer of ContextMedia in New York, New York and Chicago, Illinois:

“Marketing has been a core function of our company, and the buzz we can generate with founders pitching is of a very different nature than what we could achieve using outside partners who cannot communicate the same passion.

For payroll, payments, and inventory management, we found reliable partners. However, logistics is a core function of our business that directly affects the customer experience, so we chose to build our own system in-house. Generally, when it comes to functions that touch customers, we like to focus on quality control and do it ourselves.”

The Young Entrepreneur Council (YEC) is an invite-only nonprofit organization comprised of promising young entrepreneurs.

Follow YEC and On Small Business on Twitter.

More from YEC: How to barter for goods and services

Do you have questions you would like to see answered by these young entrepreneurs? Share them with us in the comments below or via email and we’ll pass them along to the YEC for future series.

By  |  06:15 AM ET, 03/06/2013

Tags:  small business, small business advice

 
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