Startup entrepreneurs may have a fresh new business idea, but also have to deal with obstacles in its execution like low capital, not enough experience, staff low on skills, etc. Although the recent growth of startups paints a rosy picture, the fact remains that 90% of startups fail within their first year.

Innovation and unique enterprise is definitely valuable but in order to succeed as a business, there are certain dos and don’ts that startups need to adhere to – outsourcing being a major one of the “dos”. Outsourcing has time and again proven to be a key catalyst that accelerates growth, and yet  startup companies are hesitant and have not been able to tap its benefits to the fullest.

It is well known that Business Process Outsourcing is a thriving industry and has been in existence for the last 20 years. While established American companies have multiple processes being executed from offshore outsourcing destinations like India, it is also time for fresh new American startups to realize these benefits and see how outsourcing can catapult them forward.  Their day to day back-office functions can be outsourced; and they can have more time to build on their core business. And that’s all; here are 7 primary reasons that give you a quick insight into the advantages of outsourcing for startups:

1. Outsourcing reduces capital and labor costs.

   Human capital is becoming increasingly expensive, and so this is one of the most popular reasons to outsource work. Moreover, during the stage of startup growth, cash constraints are a major hurdle. Startups can avail of a skilled outsourcing company that effectively competes to provide a better price. Big names in the market use affordable Indian labor to outsource and expand their established businesses, and it will be a wise move for startups to adopt the same strategy.

2. Focus on niche areas

   Time is a crucial factor in startup growth. A Startup’s early years may demand a lot of time and energy for carving a niche in the market. Naturally, an entrepreneur may not have a lot of time left in his hands. Channelizing time and energy is a tricky concept. Offshore Outsourcing offers an obvious way of tackling this issue. India works in a different time zone. This gives American companies an opportunity of using all the 24 hours of the day for their purpose. Even though local employees complete their day job and go to bed, their outsourcing partners in India still work the rest of the hours to complete the job. Not only is this faster, but also more efficient.

3. Increased efficiency by specialized personnel
   

   Even though English is a global language the reality is many countries lack in communicating, especially with regard to technical communication. India overcomes that major gap. It has a large skilled manpower available who are also proficient in English. The labor force is willing to be supervised and can work on a very competitive wage. With 9 million students graduating each year, India boasts of high talent and promises a body of expert workers. This kind of trained Indian work force can make the difference for American startup companies’ growth.

4. Startups can offer competitive prices to customers by lowering overall costs
   

   It is of vital importance that a startup should have some breathing room, especially in the first few years. Offshore outsourcing centers offer a competitive price range thus providing invaluable breathing space compared to other local outsourcing companies. And, with the skilled and comparable quality of work provided it proves to be a major advantage. Startups thus can transfer the same price advantage to their customers.

5. Risk Control
   

   Risk control is one of the important factors to be kept in mind while talking about startup growth. Offshore centers are often ISO certified and compliant to third party audits. So, you can outsource sensitive work to skilled & certified professionals who are enthusiastic, adept and cost cheaper.

6. Greater access to market connections
   

   Startups and businesses have evolved into community businesses. Special contracts and deals are signed to create symbiotic relationships. For a startup’s growth, outsourcing also provides a platform to associate with other businesses and markets from around the world, thereby connecting the global economy.

7. Flexibility
   

   Startups who are still deliberating on what form to take and are experimenting and trying new areas and strategies will find outsourcing as an economic means to juggle between ideas. Separating different ideas and assigning outsourcing firms work on each is a flexible and cheaper method to judge which process generates the best business interests.

Conclusion:

With stability in the administration and “essential to organization” IT policies, Indian outsourcing companies provide good flexibility and business value to startups. Indian companies have proven success in propelling American companies and are thus most suitable for allocation of back office work for startups.