- KLEC Team
Case Study - When and Why to Outsource?
Big Game Entertainment is a big business that deals with major companies to put on in-person game shows. When the business started, it was a nimble operation that moved swiftly. However, as clientele and interest grew, so did the calls, sales, and scheduling. As a result, the owner Damon Knight faced decisions. He questioned if he needed to hire additional staff because he could not commit to all these tasks without jeopardizing one.
After reviewing his finances, Damon considered hiring two people; a sales account executive and a part-time administrative assistant. However, even though responsibilities were increasing, the tasks for a part-time administrative assistant were not enough. He decided to look at outsourcing and to contract. Recognizing that calls and scheduling took a significant amount of his time from his core functions, he decided to outsource calls and scheduling to an administrative agency. It would only require a monthly membership fee for a set amount of hours which he could adjust depending on the season. It gave him the flexibility he needed. In addition, the fee was nominal compared to what he would pay for a part-time employee. The significant part about the agency was that he could adjust the services during high peak seasons without incurring overtime or increased costs.
Damon decided to hire a contractor with clear sales goals for the sales role. He provided a base salary with a commission. Damon had set sales goals to forecast what his cost would be with increased business and a full-time employee. Though the hire was a significant expense, it made sense because he could target more clientele which meant increased revenue and profit.
Some entrepreneurs try to do all the tasks in their business to save and make money. However, there is only so much two hands can hold. Eventually, you will only stay with what you have. So get additional hands to help. Outsourcing offers great value, good service, and more revenue without significantly reducing your profit when executed correctly. Ultimately, Big Game Entertainment was brilliant because they expanded their company without increasing their budget considerably.