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Top Business Functions that Are Best Outsourced for Your Startup

Startups don’t have the luxury of two things: Money and time.

That is why 90% of them fail and 46% do so because they run out of money.

Most startups operate on a tight budget and lack enough funding for their business operations. Therefore, they can’t afford to hire full-time employees for all positions open in the company.

For your startup, every decision has to be cost-efficient and focused on the core business operations that give a competitive edge. And that is where outsourcing comes in as the top reason for outsourcing (70%) is cost reduction.

To minimize cost, a lot of startups hire a few employees who juggle multiple tasks unrelated to their main job description. This eventually affects the quality of their work.

There’s a lot of effort that goes into scaling a startup and maintaining longevity as it operates in a highly competitive environment. That’s why the idea of outsourcing is no longer an option for consideration but a requirement for startups.

What Does It Mean to Outsource?

Outsourcing involves handing over some of your business operations to external vendors upon a contractual agreement.

Over time, outsourcing has gotten a positive rep and the demand for it is skyrocketing due to its proven benefits.

Check out the following statistics:

  • In a survey, 90% of businesses cited outsourcing as crucial to their growth.
  • 95% of businesses view this new workforce as a key element to developing and running a successful business.

Running a startup is accompanied by a lot of pressure due to its existence in an extremely competitive environment.

Therefore, as a startup founder, you want to focus on key issues that will allow you to thrive long-term. You don’t want to get stuck in performing business functions that can be efficiently done by outsourcing.

When you outsource, you make the most of your limited resources as a startup.

Benefits of Outsourcing for Startups include;

  • Saves time: Outsourcing downsizes your workload, giving you more time to scale and grow your business.
  • Enables you to channel your energy to business operations that are key to the long-term success of your startup.
  • Allows your team of employees to focus on doing the work they know best.
  • Enable tasks to get handled effectively by experts thereby increasing the quality of work.
  • Saves cost: Outsourcing can save you a large chunk of overhead costs like administrative and utility expenses.

Also, hiring a full-time employee is a huge expense for startups, as they will have to offer complete employee packages.

So, when you compare it to the cost of outsourcing, with the competitive edge that comes with it, it’s a no-brainer that is better for startups.

  • Increases productivity: Outsourcing can increase productivity and competitiveness 10- to 100-fold. With more time on your hands and clear priorities, your productivity levels will spike.
  • Increases efficiency: This is because you are assigning the tasks to specialists who have a higher tendency to perform well. Also, 24% of small businesses outsource to increase the efficiency of their business.
  • Gives you a competitive edge: 78% of small businesses believe hiring freelancers gives them an advantage over competitors.

Now that you understand the importance of outsourcing, the big question is, what should you outsource?

Here is a list of the top 5 business functions that are best outsourced for a startup:

1. Digital and Social Media Marketing

Marketing your business on the web, from social media channels to websites requires expertise as it comes with planning and a lot of strategizing.

The world of digital marketing is dynamic and affected by trends every minute which can be tiring to keep up with.

Therefore, it’s not just about opening social media accounts or launching your sites; you need a specialist who can effectively promote your business to your potential customers.

A Forrester Research survey revealed that 53% of marketing executives plan to outsource their marketing.

If you are doing digital marketing alongside many other tasks for the company, the impact of your marketing campaign will suffer.

This is why outsourcing your online marketing to experts whose sole purpose is to run an effective SEO and social media marketing campaign for your brand is vital.

A survey showed that 34% of small businesses use outsourcing for digital marketing.

Outsourcing this function is important except you are willing to hire a full-force team that will take care of all things online marketing, which in no doubt will cost you a lot more.

2. Human Resources

The responsibilities of the human resources department are wide and most startups don’t have the luxury of running a fully functional HR department.

Most startup founders will choose to perform some of these tasks themselves, like hiring for example.

Meanwhile, it is not recommended for you or your team of employees to take control of the hiring process. Talent evaluation and selection should be done with utmost care.

Hiring agencies can use their evaluated database to select the best individuals to carry out the job with trusted processes that your team doesn’t have to stress over.

Therefore, employing Professional Employee Organizations (PEOs) to cater to all your human resources needs will not only save you time and money but provide you with great services.

PEOs can help you with the following:

  • Employee hiring
  • Management of employees
  • Employee benefits
  • Payroll processing
  • HR Compliance
  • Paperwork and more.

PEOs like Oasis and TriNet are great for startups.

You can also consider hiring agencies like Talent Place to help you recruit the right team or talent for your startup.

3. Finance Accounting

As a startup focused on growth and thriving long term, you don’t want to get caught up in the financial issues related to your company.

It is no coincidence that accounting is the most outsourced industry sector.

Also, the financial aspect of your startup is one you want to avoid problems. Due to budget restraints, you can’t afford to hire a full-time CFO or hire an accountant with employee benefits. Or have one of your employees multi-task because they know a thing or two about accounting.

The best thing you can do is outsource this to experts to save cost, and time and avoid problems due to limited knowledge, all of which are valuable.

37% of small businesses outsource accounting and finance.

These financial experts will help you make wise financial decisions, ensure you keep your expenses in check, and avoid tax complications.

The Accounting outsourcing services can help you with:

  • Managing your payroll
  • Recording daily transactions
  • Creating financial forecasts
  • Ensuring your account books are GAAP-compliant
  • Provide you with financial models
  • Help you budget effectively
  • Help you with financial presentations, financial reporting, and more.

You can use the services of companies like myStartupCFO or Kruze Consulting for your financial operations and contractual Chief financial officers (CFOs).

4. Technology and Engineering

Even if you have a tech expert in your startup team, there are so many parts of technology that you should consider outsourcing, or else you will rely on one person to do everything which can eventually be disastrous in the end.

A study illustrated that 37% of businesses outsource IT.

There are technical agencies like MojoTech that can provide you with engineers to help you with product development, design, and prototypes.

You will be handing your work over to experienced tech experts who will save you the constant deliberations and cluelessness on how to go about the engineering plus technical parts of your products.

Furthermore, the slow and tiring process of building a team of efficient, experienced, and skilled engineers is something you can’t afford as a startup from the get-go.

Online agencies can help you with your consulting, modeling, AutoCAD designs, and Sketches. 

You can also outsource:

  • Computer programming
  • Web design
  • Mobile App development/design
  • IT plus systems management
  • IT Maintenance
  • Troubleshooting issues
  • Emergency havocs or complaints
  • Cloud storage and more.

You can consult the likes of KitelyTech or Unleashed Technologies for web design and mobile app development services.

Whilst agencies like TechMD can provide you with cloud solutions.

5. Admin Work

Admin tasks are another top business function that ought to be outsourced for thriving startups.

The need to cut down the expenses of employing admin officers has birthed the growing demand for virtual assistants (VAs).

VAs have grown in popularity over the years as they are more cost-efficient, require low maintenance, and deliver high-quality performance.

According to a study, compared to a full-time employee, a VA can save your company as much as 78% on operational costs.

They ensure no tasks are hanging around, and are great for startups since their charges are quite affordable.

VAs can help you with the following:

  • Scheduling appointments
  • Maintaining records
  • Data entry
  • File organization
  • Customer support
  • Office assistance etc.

Finally, outsourcing your admin work will also save you some administrative costs like purchasing tools and investing in software. Because VAs can take care of the work through the use of their technology.


The question is no longer about whether to outsource or not but about what business functions to outsource.

Although every startup is different, they also share a lot in common like the top business functions that should be outsourced.

Get started by partnering with digital marketing agencies to carry out your online marketing campaigns.

Then move on to hiring a CFO to cater to all things finance. After that, proceed to partner with technical agencies to handle the techy areas of your startup.

In addition, hire PEOs to serve as your HR department and hire VAs to make your work ten times easier to enable you to focus on other important aspects of your business.

StartUp Growth Guide Staff

This content is written by the StartUp Growth Guide staff. Gain competitive advantage and stay ahead of the curve through the insights we share on the blog. Also, contact us to learn how we can help your business to grow online.

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