The primary purpose of doing business is to make profit. It is important to note however that profit making is a process and not just an act.
So, an entrepreneur who is aware that profit making is a process must understand what cash flow – the interplay of cost and inflow over a period of time.
The question of outsourcing therefore would depend on what the cost implications would be on the overall outcome of the business. The availability of equity and the absence of alternative options of deploying funds are other factors that can determine the decision of outsourcing some of your operations.
As a business consultant, outsourcing some parts of my operations will significantly depend on the activity not having a direct impact on my product or services in terms of quality and that on a consideration of a cost/benefit analyses, it is cheaper to do so.
My submission therefore will be that for starters, outsourcing isn’t a bad idea if the above considerations are in the affirmative. However, as the business begins to grow, outsourcing should be reduced to the nearest minimum because of the need for standardization.
Dr. Festus Odigie-Erewele
Managing Partner, Excel and Grace Consulting.