Support services allow businesses to work on what they do best
Not many business owners got into business to hire and fire employees or to shuffle through multiple invoices from different vendors. They got into business because they had a passion, and odds are that passion is not for the thousands of tiny tasks that are essential to running a business.
Meghan Hallam, director of sales and marketing for Unity HR, an outsourcing option for a business’s human resources, benefits, payroll, accounting and more, said the administration of all these tasks can drain the day away.
“All those small tedious tasks that take five or 10 minutes out of your day — those add up over the course of the day and then you say, ‘What did I do today?’” Hallam said.
No one knows just how long this recession will last, but as business owners assess the situation, they are also assessing options that can cut costs and streamline their operations. One way to do that is to outsource a portion of their operation to another local business, be it human resources, facilities maintenance or shipping and receiving.
Hallam said outsourcing locally allows company owners to focus on the passion that drives them to succeed.
“We can pull out those little things that get in the way of that passion and now they have all the time in the world to get done what they need to get done,” Hallam said.
Hallam said that an HR person for a company of 10 to 15 employees could cost a business at least $30,000 a year. However, she said outsourcing for the same services would cost $5,000 to $10,000 — approximately one-third of the cost.
With the nature of today’s economy, Hallam said many businesses have holed themselves up because they are trying to find ways to stop the financial bleeding. But once they hear about the time and money they can save, a lightbulb comes on.
“It’s like an ‘Ah ha! That’s a great idea!’” she said. “They can just push it away and not think about it anymore.”
Randy Alley, property manager for all U.S. Banks in Northwest Washington, was losing too much of his day to sifting through invoices from multiple building-maintenance vendors and making sure that the different contractors worked together to provide consistent results.
For example, if one of his banks had an overflowing toilet, he had to contact a plumber to fix the toilet, a janitorial person to clean up the mess and then hope they all worked together to fix the problem without disturbing bank customers. If water damage and mold were found later on, then another contractor and a mold specialist must be called.
Then Alley decided to work with Ferndale-based Management Services Northwest, a turnkey facilities-maintenance solution.
“Now there are less work orders to be generated throughout our systems and I know that I can go to them with a problem and have the issue 100 percent resolved without question,” Alley said.
Management Service Northwest started as a janitorial company, but slowly began to add services, such as landscaping, general contracting and plumbing to become a “one-call source” for property managers like Alley.
“With their expanding outside janitorial and also hiring the appropriate, qualified people to handle things like plumbing and landscaping services, they became a one-stop for us,” Alley said. “Also, the overall contract price is lower than others by having the multiple services they provide and the quality staff they hire.”
Janelle Bruland, president and CEO of Management Services Northwest, said these days businesses are cutting down on expenditures and seeing the benefits of efficiencies created by going through one vendor.
“Just the efficiency of one call, one invoice makes it a lot easier,” Bruland said.
Bruland said local outsourcing cuts costs without skimping on safety or quality results.
“Sometimes people don’t have a lot of expertise and make the wrong decision on a safety issue,” Bruland said. “They might try to save a buck by going through their uncle, but there is no expertise, which causes more problems and more exposure. We are certified and have proper training, so you can count on things being done professionally and expertly.”
Bruland said the down economy presents an opportunity for companies like hers, because everyone is looking for a way to cut costs.
“If we can come in with a solution to decrease their spending, then people will listen to what we have to offer,” Bruland said.
The benefit of wearing only one hat
Opening a business just as the economy takes a nosedive can be risky, but Crystal Creek Logistics, which opened in Ferndale in May, has done extremely well offering a third-party packaging, shipping and receiving service.
Mike Bradburn, co-owner and vice-president of sales and marketing, said in spite of the economy, their business has been a success thus far.
“We are adhering to our business plan and we have exceeded our expectations in some ways,” Bradburn said. “It’s been very encouraging to embark on something new and be successful and to see that we are being noticed. People are looking our way and we are getting new business, which gives us cause to be optimistic.”
Bradburn said the company handles order processing, packing, and shipping and receiving, so its clients can spend more time marketing and sourcing products.
“If [business owners] are looking to be frugal, there are a lot of ways that outsourcing makes a lot of sense,” Bradburn said. “We are getting a lot of entrepreneurs who are getting under way with their businesses and are realizing the benefits of not having to wear all those hats and do it all themselves.”
Cathy Hayward Hughes, co-owner and president of Crystal Creek Logistics, said some businesses they have worked with had their own warehouse space and had been doing their own shipping, but wanted to hand over the shipping to Crystal Creek so they can focus on marketing.
“Now they can get rid of their warehouse space and all of those employees and they can move into an office building,” Hughes said.
Bradburn also said that if a small business uses their service, then they don’t even need to begin to think about shipping.
“They don’t need to procure warehouse space, hire extra staff, run the software programs that handle all of that or buy packaging materials,” Bradburn said.
Outsourcing shipping needs also gives clients the benefit of a reduced cost of shipping and packing materials. Shipping companies like Crystal Creek can also analyze shipping patterns to maximize a business’s savings, Bradburn said.
“[Hughes] is very good at shipping analysis and she has saved our primary customer quite a bit of money and really streamlined their business,” Bradburn said.
Hughes said outsourcing logistics locally allows smaller companies to keep a close eye on inventory that they may not get a chance to inspect before distribution. Plus, Hughes said, it’s good to be close to your product in case there are any problems.
“Would you put your kid in a daycare right down the street or across town?” Hughes said. “It’s just nice to be close to your inventory and with the smaller business — it’s like their child. They have put a lot of time and investment into it.”