As a Gen-Xer, practically everyone I know, do business with and share a residence with (even my dog) has a blog. Sometimes I think why the heck should I read my Dry Cleaners Blog? Or befriend him on Facebook? What does HE have to say to me that would be worth me hearing?
There are many important decisions to be made in the development and expansion of your business. Choosing the right name, the right people and providing the products and services that people want are all critical decisions on the road to industry success and hopefully, leadership. But what about the activities you wont be doing? Which tasks could be better accomplished by another provider? Whether you lack the skills, the time or the people, there are probably quite a few tasks that could be outsourced.
Some companies are confused when it comes to selecting their fulfillment vendor. Many times, they think that the company needs to be knowledgeable about their industry. And it’s understandable. For any specific task, especially one that is core to your business, would most certainly require someone that’s knows your industry. It would in fact require a company that is IN your industry and knows it quite well. But with third party outsourcing for fulfillment type activities, its different. Think about it: Whether you are talking about kit assembly, product packaging or even answering phones, most fulfillment activities are simply labor intensive type tasks.
There seems to be no end to what you can outsource these days. From labor to space needs, call centers to product assembly, it seems every company out there is outsourcing something. Some outsource quite a bit, doing very few core activities themselves. In fact, some virtual companies take it to the extreme and outsource everything and just take a cut of all the services. Pretty smart, huh?
At the center of every business, there exists a few core processes. Whatever you do to actually make a sale is usually a part of this. For a software manufacturer, it could be writing the code. For a magazine, it could be researching, writing, and editing the stories. It’s these activities that generate 70% or more of revenue. So the question becomes, why do the rest? If 70% of the activities that you spend time on only generate 30% of your revenue, there is no need to do them. Some would in fact argue that you are not being very wise if you continue to do them.