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3 Things You Should Always Outsource when Starting an IT Business

Thursday, March 31, 2016/Categories: business-tips

As an IT business owner, you're used to doing everything yourself – heck, part of the reason you love tech is that you enjoy figuring out how to get all the parts to work together. But that’s not always the right mindset when it comes to running your business.

Why? Time is your most important asset. And let’s face it: it’s often in short supply.

It’s crucial for tech business owners to figure out what they’d be better off outsourcing so they can save time and focus on growing the business. We interviewed three business owners and asked what they outsourced and why. Here’s what they told us. 

1. Outsource File Management and Data Backup

Andre Preoteasa (@AndrePreoteasa), director of IT at Castle Brands, points out that outsourcing has replaced countless IT solutions that used to be the bread and butter of your tech staff – and file management is one of them. His file manager of choice? No surprises here: it’s Dropbox.

“With Dropbox, all the hard work is taken care of,” Preoteasa says. He enjoys not having to worry about the infrastructure he’d have to manage if he tried to provide the same service in-house.

Outsourcing requires a different skillset for IT directors: now they are brokers of services rather than engineers. It is required to support outsourced services differently, such as through contractual agreements and understanding how to get in touch with the vendor.  – Andre Preoteasa

2. Give the IT Accounting Work to Someone Else (and Avoid Costly Tax Mistakes)

Curt Mastio member of (@StartupAcctngAd) cautions that a “DIY approach” is not what you want when it comes to taxes. If you try to do bookkeeping, payroll, and tax compliance yourself, you could end up paying a lot to clean up mistakes. His advice: outsource it.

“There are large penalties for incorrectly handling payroll as well as tax filings and payments, so it's best to have an expert in the field take that off your plate to ensure it is done right the first time.” – Curt Mastio 

 

In addition to outsourcing your bookkeeping, it’s smart to consider working with a financial adviser who will make sure your financials are in tip-top shape. But Pamela Capalad (@pamelacapalad), financial planner at , suggests you really do your homework before hiring an adviser:

  1. Get recommendations from friends or colleagues in your industry.
  2. Don’t settle for the first financial planner you interview.
  3. Have a long conversation with potential financial advisers – ask what their typical client is like and make sure they’ll be reachable if you have questions.

While it’s important to find a good fit, Capalad also cautions that you shouldn’t be afraid to “jump ship.” If you work with one adviser or accountant who isn’t right, don’t feel committed. Be ready to move on.

3. Let Someone Else Handle Customer Relationship Management (CRM) Tasks

Alex Kharchyshyn CEO of , suggests that businesses hand off their customer relationship management to a third-party service. He explains that if you’re going to build something like this yourself, you’ll spend months on the project. And those are months that you should be spending delivering solutions to your customers, not building a platform to manage them.

Outsource this to experts in Salesforce, SAP, or other CRM platforms. What should you do with your spare time? Kharchyshyn says the whole point of outsourcing is that it gives you more time to focus on your core services. What do you provide for clients? What skills do you need to sharpen there? Focus on these things.

3 Tips for Limiting IT Business Liability When You Outsource

When starting an IT business, you can save a lot of headache when you outsource – but outsourcing brings its own risks, too. Here are three things to pay attention to:

  1. Your data liabilities may change when you hand off data to someone else. Now that you aren’t guarding your own data, you expose it to new risks (healthcare IT professionals are nodding their heads right now). And your client contracts (or HIPAA regulations, if you work in healthcare) may determine how much you can and can't outsource. See “Data Security Laws Computer Consultants Need to Know” for more information.
  2. Pay close attention to vendor contracts. Review the terms of service, warranties, and limitations of liability. See our post “What Is Contract Negligence” for some helpful tips on parsing the legalese that comes with working with vendors.
  3. Evaluate your vendors. In our post “1 in 3 Companies Welcoming Big E&O Exposures with Third-Party Vendors,” we cautioned that an absurd number of companies don’t evaluate third-party vendors. If you hop on the outsourcing train, use best practices to screen vendors and make sure they're up to par.

To learn more about covering your liabilities when you hire outside help, check out “Who Is Responsible for Subcontractor Insurance?

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