When you first start your own business, chances are that you’ll outsource a whole lot of your work. After all, it would be nigh on impossible to do everything alone from the outset and you are unlikely to have expertise in everything you need. However, as your business grows and expands, and you become more certain that there’s a market for your products out there, you’re likely to consider bringing various practices back in-house. While outsourcing may take a huge weight off your shoulders, you lose a whole lot of control over your business process. You become reliant on others, having to simply trust that they will carry out work as you expect and meet the deadlines that you set out. By bringing things back in-house, you take over the reigns again. You also gain immediacy – if you need particular work to be carried out quickly, you can focus on it and ensure that it is complete to a stricter deadline than usual. You also know the exact working conditions that your products are created in, as you provide the working environment and you’re the one managing the staff. This provides confidence in the sourcing (e.g. whether your input materials are ethically sourced). There are a number While there are various areas that you can apply this logic to, let’s take a look at manufacturing for now!
Having the Know-How
One major reason that small business owners outsource their manufacturing process is that they don’t actually understand how their products are made. They simply send off the design and have the product returned to them. By taking manufacturing leadership and overseeing the creation of your products yourself, you can get a real understanding of everything that goes into the final product that you’re selling. This also gives you insight into areas for improvement or development!
Having the Equipment
When you bring things in-house, you need to make sure that you have the right equipment to complete the work to a high standard. This is likely to involve a fair amount of investment. You want top end machinery to get the job done right first time around, so are likely to have to invest in specific machines. This, however, is worth the investment. After all, the equipment should pay for itself quickly enough and then you’re not having to pay someone else for the use of their machinery. You’ll be generating a higher percentage of profit, as you will have fewer expenses and outgoings.
At the end of the day, outsourcing may well make life a little simpler at first, but it comes with a high price tag. When you want to make a profit, bringing things back in-house will boost your earnings and leave you with a bigger paycheque at the end of each month, which is what we go into business for at the end of the day! So, start expanding your knowledge and investing in the machinery you require to own the means of your business’ production!