The practice of subcontracting work to other companies - better known as Outsourcing - is becoming increasingly common in the business world today.

Outsourcing firms could provide various services such as typing, transcription of dictation tapes, bookkeeping, payroll, billing, taxes, office cleaning, copying, and mailings - all at their office.

Every business should be open-minded regarding the multitude of advantages obtained from outsourcing. To illustrate a point, let's use the most common form of outsourcing (secretarial) as our example.

You, as the company owner, are faced with the dilemma of accepting a substantially large contract from a client with a short deadline. Since you maintain a lean staff (or no staff), in order for you to accept this project, you would have to choose from any of the following alternatives: Hire additional personnel; call a temporary services agency; or call a business specializing in Outsourcing.

Hiring new staff entails spending money for classified ads; productive time being wasted on interviews, testing, and other screenings; training and supervising new hires; overhead such as office space, a desk, chair, computer, printer, copier, fax machine, and office supplies; bookkeeping; payroll accounting; utilities, and the most expensive of all - monetary expenses, which include salary, worker's compensation insurance, unemployment taxes, Medicare, etc. Additional employee benefits such as vacation, sick days, personal days, medical, vision and life insurance, maternity leave, pension, etc., also need to be calculated into the total cost.

Upon completion of this job, you gained another employee - the "secretary."

You could terminate him or her and pay unemployment compensation. Or you could absorb him or her into the payroll, paying for idle time between contracts.

The second alternative would be to contact a temporary services agency. Consider that their hourly rates are usually high as their hourly rate includes that which they pay their employee (temp).

Another disadvantage would be that you never know which temp you'll get - perhaps a different person each time. Although you save on employee expenses, which are paid by the agency, your overhead costs still remain. You still need to supervise and train the temp to your method of doing business. One advantage you have is that if you aren't pleased with the temp, a simple telephone call to the agency should (hopefully) have the temp replaced the next day - without any involvement on your part between yourself and the temp. Now you need to retrain that temp.

The third alternative would be to utilize the services of an outsourcing firm. Not only would you save money on employee expenses and overhead, but the same staff will handle your work each time, with work completed at their office. This would allow you to work without disruption in your business. With a fax machine, your documents could be immediately sent to the outsourcing company who would then type the work and fax it back in time for your meetings, deadlines, etc. Without a fax machine, your work would be completed and faxed immediately to your client for maximal time efficiency. After, in today's fast-paced business world, doesn't everyone need everything "yesterday?"

By having your work done by a reputable firm, your savings can be enormous, resulting in immediate savings in time and money. A good outsourcing agency will possess a professional and friendly staff who will treat you special, as if you are their only client whether your project is small, large, or a one-time project, and will maintain open lines of communication, making themselves available for your telephone calls and faxes - even in the evenings and on weekends. You only pay for the time involved in the completion of your work.

New businesses with little or no office space or staff, or companies experiencing corporate downsizing are prime candidates for outsourcing. Even fully staffed businesses occasionally incur large, undesirable, seasonal or periodic projects, or highly confidential documents (board minutes, bids/specifications/contracts) which could be outsourced.

It is easy to see why so many of today's businesses are embracing outsourcing as a cost-effective method of doing everyday business, increasing productivity, stretching tight dollars, and reaping the awards (profits). Can you, as a business owner, afford not to?