Today’s guest blogger is Ellen Wood who is the co-founder and CEO of Austin based vcfo. The firm specializes in operational finance and accounting, HR Solutions and recruiting services for companies of all sizes. She can be reached at 512-345-9441.
The outsourcing of key roles inside companies of all sizes is becoming more common. Historically companies have looked to outside experts for highly specialized assistance in areas such as audit, tax, and legal assistance. In more recent years functions such as marketing, HR, operational finance and accounting, IT and recruiting have become outsourced resources as well.
For startups, tapping an outsourced resource can be an ideal solution. The company can obtain the desired level of experienced professional advice at a fraction of the cost of making a long-term hiring commitment that comes with adding headcount before the business has grown to the right size.
There are several things to consider when deciding to outsource any key business function for your company:
- Reputation Of The Resource. Check references both formally and informally. When you can, go beyond the references they provide and inquire within the community and your network to see what kind of feedback you get.
- Validate expertise and specific experience. Make sure that the consultant has the experience you are seeking. There is a significant difference between an individual who is between jobs and a firm with experienced resources across multiple areas of expertise. Individuals are great resources and may become a long term hire – just be sure if that is the option you are considering that they individually have the experience that you need in your situation. Avoid the “brother-n-law” or “best-friend” option to fill key roles on part time or outsourced basis unless they really do have the expertise that you need.
- Be wary of overly discounted rates. You are looking for expertise for the right amount of time to get the job done, not to become ongoing billable hours indefinitely or inefficiently.
- The Network Matters. As an early stage company it is particularly important to think about the value of the network other resources you engage with can introduce you to. You are building your team right now both internally and externally.
- Transparency. You should be able to learn from your consultants. Look to them to educate you as to their particular areas of expertise. You need consultants who see themselves as your partner and put your interests in first place in the relationship.
Utilizing experienced recourses at key growth points can prevent your startup from making common mistakes along the path to success. An optimal outsourced provider will see themselves as your partner in achieving your goals.