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Six Questions To Ask When Identifying The Right Firm To Outsource From
Outsourcing services from a firm can be an overwhelming experience however by asking the right questions and picking the ideal firm, you can get a lot of value for your money and time. Here are some guiding questions to help you identify the ideal firm to partner with.
1) Do your business needs match the experience and services the firm is offering?
The aim of outsourcing services is to let the experts take charge so you can focus on other areas of the business and save operational dollars. It is therefore important to seek firms that have the expertise in the areas you want to outsource.
2) How are the services the firm is offering better than your in-house service?
It is always good to compare in-house service versus outsourcing in terms of costs, efficiency and proficiency as well as to decide whether outsourcing efforts will improve the company’s profit margins.
A good step in this direction could be calculating your operational savings.
3) Who is your key contact in the firm and what strategy is in place in case the key contact is no longer available?
Continuity is important when running a business even when faced with change, therefore it is essential to know the strategy in place in case the key contact is no longer available to work on the project.
4) Are the financial and performance projections genuine?
Managing expectations helps build credibility in a business relationship, so analysing the financial and performance projections the firm is giving will create trust if the projections are genuine.
5) Are their methods of delivery consistent with the culture of the Company?
A good working relationship is achievable if there is an understanding between the company and the vendor especially when it comes to delivering the service in the time frame and method as promised.
6) What is the exit strategy in case there is a change in the outsourced firm?
It is important to have the flexibility to terminate the contract in case there is a change in the firm that might have a significant repercussion on the company’s operations.
Improve Productivity By Leveraging Technology & The Cloud
– Where is the data stored, who are the users of the data and how would it effect you if the data was lost?
The Need, the Want and the Barter
Bluefront Capital is always looking for new and innovative ways to help our clients. In hopes of being a productive and valuable part of our clients’ teams, we started a newsletter and will provide tips on how to grow your business during a recession. You can expect us to cover new topics every month. In this first issue, we will talk about the difference between “need to have” and “nice to have” and how to think about various business expenses. Many entrepreneurs were brought up with the mentality of borrowing and spending in order to attain perceived business needs and then doing everything possible to work their way out of the red and into the black. We suggest a different approach that consists of 3 parts: analyzing, investing and bartering.
Analyzing
Before any major project is taken on, as a business owner, one must ask him or herself, what are the goals of the next investment (for example PR services, Marketing Services or even office space)? When using the borrow / buy now earn later mentality one may say “I need it all now!”. Upon closer examination, we can break down these needs further by asking some questions. For a simple question such as “Why do I need office space?” – many answers come to mind, such as, “To show that I have one”, “To house my employees”, or “To take clients for negotiations”. While some of these reasons are more relevant than others, by taking a step back we can see that none are good enough to pay for an office if the cash is not there. The exception being a workplace for employees, and even with that, there are always workarounds, such as working remotely and meeting clients in their own offices.
Investing
The second part of our process is “Investing”. When going back to the original 3 wants, some wants are in fact needs. For example, in order to get clients, especially in this market, you absolutely must invest in marketing & PR. Again, you must analyze the potential ROI of online marketing, mailings, phone calls, events and other options, but whatever your decision is, you must invest in marketing in order to attract new clients and keep the current clients happy. It is often an overlooked area of investment for business owners, because in contrast with sales efforts, it does not have as high of a short-term benefit as hiring a sales person, for example.
Bartering
Finally, businesses are often reluctant to pay for PR, accounting or some other pesky necessities until the last possible moment because it means less spending in other areas. For a small business owner, as for everyone else, cash is king. So what else can we do? I am a firm believer in negotiating and bartering. By speaking with others in the businesses community as well as leveraging the contacts of your advisors, you can often save money and time. It never hurts to ask for services even if you can’t afford them. Be up front about the fact and ask if you can barter. Never be afraid to ask; you will be surprised by the responses you get.
I hope you find our advice helpful and thought provoking. Feel free to call / email with any questions and please forward this letter to your friends. Be sure to sign up to receive future newsletters.
Learning from mistakes others make.
Keith Schorsch, a former Amazon senior exec with a Harvard MBA most notable for increasing Amazon’s sales from $16 million to $3.2 billion and raising online customer count four-fold within 5 years, was forced to close his most recent
independent venture less than a year after launch. While I believe great businesses are built on the principle of 99% perspiration and 1% inspiration, this recent example illustrates that there are other important issues to consider when analyzing an investment and the long term viability of a startup.
Keith Schorsch, the founder of the startup Trusera mentioned above, clearly had success while working for a large organization but was unable to transfer his success to Trusera. Although the real reason why the startup failed remains unknown, Trusera was clearly having capital management issues as their $ 2 million seed funding was burnt through just five short months after the website was launched.
When a startup burns through cash that quickly, it shows many signs of weakness: unclear revenue model, poor sales management and lack of finance or operations experience, just to name a few. Various online sources criticized noted Trusera’s vague financial model, including focusing only on onsite advertisements and premium service fees for revenue.
The company appeared unsure and un-descriptive in their financials while touting the potential of their network. As a startup, the main focus needs to be on how to build a business and not only on ways to raise funding. By building the business methodically, from the ground up, money will begin to flow in and the company will soon be sustainable and less susceptible to failing.
Having a detailed, well-throughout financial plan is crucial to a startup, as one small misstep can result in precious time and money being wasted. A lot of money, and possible the business itself, would have been saved if Trusera had an advisory team in place to help them with creating, implementing, and monitoring their business model.
Although some may believe the costs outweigh the benefits of hiring an adviser, many entrepreneurs have found this expense worthwhile, as it is proven to increase the chances of your company’s survival. At the very minimum, adviser’ financial expertise and services will allow more time for you to focus on your product or service. Experienced, connected and competent advisers may just be the missing link that struggling companies have been overlooking.
Think Big – Act Small.
“Think Big – Act Small” – I have never heard of a bigger Cliché. Meeting with a member of our advisory board, a seasoned veteran in the technology startup space, he kept repeating the same thing, think big – act small, think big – act small. What does that really mean? While a lot of entrepreneurs come to us for help with capital raising and general business development, I find there is a common characteristic that separates the avid “googler of all things business” and somebody who actually thought about their game plan and business strategy and came up with realistic and achievable goals. More often than not, the less experienced business owner gets hung up on micro managing every aspect of their business – which in their mind translates to “acting small”. Then, they set out to make large and unrealistic projects assuming they have multiplied the time they have in a day by a multiple of 10 – “thinking big”. What’s the outcome of all this you may ask? Yet another cliché- a failed startup. On the flip side of this, the business owner that takes the Socratic approach to their business and tries to ask questions internally and externally such as ” Do we have our market right? How can we achieve a specific revenue target? How do we grow on a limited budget?”, ends up quickly finding out their core strength and core weaknesses. Only then can they come up with realistic goals as well as a rational approach to getting the kind of help they need to achieve those goals. Translation – now the business has a fighting shot of making it another year.
Obama’s new regulations and their impact on the VC world
The Wall Street Journal Blog posted an interesting article about Obama’s plan of new regulations on the financial industry and how it will / may effect the VC world. These new ideas will become a catalyst for the next wave of regulations in the financial sector and may have a real dampening effect on the growth of innovation and startups in the US.
Welcome to Bluefront Capital Blog
Hi and welcome to the Bluefront Capital Blog! We hope to share with you updates about our new services, market news which we find interesting and offer tools you may find usefull.
