The decision comes down to what skills you need and the state of your cash flow, says the executive officer at the St George and Sutherland Shire Business Enterprise Centre, Maria Cook. Can you afford to hire someone or are you better off outsourcing because it can be on a more ad hoc basis?
Cook suggests a starting point is to work out all your tasks and assess what you're good at. You need to consider what brings the highest financial return and what you may be struggling with.
"If you're spending all day doing your bookkeeping because you don't quite understand it, it's a no-brainer that you outsource that," Cook says.
What takes you seven hours might take a professional two hours and outsourcing will save you money. "I think outsourcing definitely has a place," Cook says. "Clearly, the hourly rate on that is higher than employing somebody but then you don't have the long-term commitment and the other additional on-costs, like superannuation and workers' comp."
When it comes to areas that require high expertise, Cook says it's often best to outsource to a professional. "If it's a high level of expertise, outsource it and do it well," she says. "It's like people trying to do their own websites: yes, you can do it but if you're worth $110 an hour, you've lost that earning capacity while you're doing the website. You don't know what you don't know and therefore the result is like cutting your own hair - it's probably not a good idea."
The founder of Marketing Angels, Michelle Gamble, says the decision really comes down to what sort of person businesses can afford to hire and whether that person is going to add value. In Gamble's field, "a lot of business owners don't necessarily have good marketing expertise themselves and they don't, in that case, want to be directing a more junior marketer but that's the person they can afford on a full-time basis," she says.
The general manager of louvre roof maker Vergola, Peter Rust, says outsourcing a function that isn't core to his business gives him access to a whole range of people and skills. "If I hired just one person, I'd be hiring just one set of skills," Rust says of his decision to outsource Vergola's marketing.
Vergola, which has 20 staff, also outsources the production of the electronic part that opens and shuts the roofs. Rust says the work required isn't enough to justify a full-time employee. However, he has decided against having the product's beams and posts made off site because he does not want to lose control of quality.
For those functions he does outsource, Rust says it's vital to have key performance indicators written into the contract so everyone knows what is expected.
One of the first skills growing businesses often need help with is administration. One solution can be to hire an experienced assistant, full time or part time. However, administration can also be outsourced and there has been a rise in the popularity of virtual assistants, who work from their own premises and do anything from taking calls on your behalf to arranging travel or putting together PowerPoint presentations.
Cook says this can work well but you need to ensure the person you have engaged has a thorough understanding of your business.
Outsourcing turns out to be an umbrella solution
As a micro business, Hire An Umbrella couldn't afford to hire a full-time staff member. So when it came to bringing in extra skills, owner Clair Maurice decided she would outsource to a contractor who would handle orders and check returned stock. A year later, it has proven to be a successful way to keep the business ticking along, while freeing up Maurice to run the niche company.
Maurice, 24, set up her business Hire An Umbrella after discovering, during her own wedding planning, that no other companies of its kind existed.
Maurice was torn because she also worked full-time as a manager at a charity group but realised her business was growing too big to be run on the side.
She opted to hire a contractor on a commission basis. "That way, I didn't have the pressure of bringing in a certain amount of sales every month to cover an employee," Maurice says, who admits her contractor is also much more of a details person and better at the coalface of the business.
Maurice now focuses on marketing, ordering stock and administration.