How to Start an Outsourcing Business

In an economic recession and decreasing demand for products and services in the market, outsourcing might be the best solution to resolve businesses problems in a cost-effective way. More and more companies in developed countries are increasingly outsourcing services to companies in developing countries, with services including manufacturing, design and even customer service. Outsourcing can let companies focus on their core businesses and shift to more strategic tasks like building customer relationships, a successful setup if done effectively.

The call center industry is growing and there are more and more companies or corporations outsourcing their business. You may be able to start a small business to fulfill a need for a larger business that is looking to outsource in a particular place. In a recession, large companies are looking to cut costs in every area of their business. Large companies also outsource to small businesses around the corner, and your business could be that one small business. All you have to do is provide a product or service to larger companies that you can provide more cheaply, with high quality.

Here are some ideas as to how you can start your own outsourcing services business:

1. Start with a business plan to set your goals, and reason why you believe these goals are attainable and the plan or action steps for reaching the goal. Know your business objective of outsourcing – Is it to reduce cost, generate more revenue or gain a competitive advantage?

2. Determine the services you will be providing and the target market, and which services to specialize in. Having a call center would attract large companies who wish to outsource some of their services, whether it is for consultancy purposes, customer service, data entry services, telesales, software development or technical support. The most outsourced service by far is manufacturing, because it is a labor-intensive activity that can be performed cheaply by low-wage workers. Developing countries often do not possess sufficient resources to produce capital-intensive services such as engineering design in an economically efficient manner.

3. Get to know the possible markets you can cater to – the general public or the individual clients, small commercial businesses, large corporation. Make contacts with local manufacturers or other service providers, and get estimates of their production costs. This should provide you with the basis for negotiating the price of outsourced services.

4. Determine your business location, it could be home-based or at a commercial location, depending of course on the size of your business and your target market.

5. Identify and contact several outsourcing providers. Negotiate with any or all of them so that you can find the vendor who can perfectly match your requirements. Make contacts with local manufacturers or other service providers, and get estimates of their production costs. This should provide you with the basis for negotiating the price of outsourced services.

Broker deals between companies in your home country and service providers in the countries where you maintain representative offices. Your company's income can be stated as a flat fee or a percentage of the value of the deals that it brokers.

Outsourcing is continuing to grow as small companies and larger companies continue to grow themselves. Their need for back office help - business process outsourcing - means that there will be greater need for an outsourcing company to provide them services. Be that company. Start your own business that could cater to not only one aspect, but make it multifaceted. Offer your future clients a one stop outsourcing services shop. Then, keep your company competitive by taking online courses in business policy and management. Having a call center would attract large companies who wish to outsource some of their services, whether it is for consultancy purposes, customer service, data entry services, telesales, software development or technical support.