August 3, 2022

What Is Outsourcing and Why It Works

How hiring a third party to perform in-house services will increase your revenue, save you time, and empower your business to grow.

Experts project the outsourcing market to be worth $114 billion by 2025

In a world with highly specialized industries such as IT, web development, digital marketing, etc., it’s unsurprising that outsourcing is in high demand. It’s even less of a shock that it will continue to be sought after as the years go by. 

Taking an Objective Look At Outsourcing

The sectors mentioned above impact all businesses significantly. However, they aren’t always financially feasible options to be executed in-house.

Thus, organizations of all shapes and sizes reach beyond their walls to meet the demands of today’s market. 

What is Outsourcing?

Outsourcing as a formal business strategy is relatively young, only introduced in 1989. 

It involves an organization hiring a third party to perform typically in-house services. While outsourcing is commonly used to let companies focus on core operations, it’s also used to reduce labor and operational costs. 

Take how banks frequently outsource their customer service operations. For example, whenever there’s a customer-related complaint or query concerning online banking services, the third-party handles everything. 

Here’s what would drive the bank toward outsourcing: 

  • There was consumer demand
  • The third-party was a specialist in customer service
  • It saved them money from bringing on their own team

How Does Outsourcing Function At Its Best?

Frequently, outsourced services fulfill business-based needs well outside companies’ primary revenue streams or core functions. Yet, these secondary or tertiary components are necessary for organizational branding, growth, and development. 

It’s an interesting quandary because branding, growth, and development seem like they should all be hands-on for a company. 

Therein lies the trick with outsourcing. Companies enjoy the freedom of remaining involved in outsourced tasks to maintain brand cohesiveness. Simultaneously, they get to let the experts do what they do best.

Do In-House-Focused Companies Ever Outsource?

Companies with a more in-house mentality also outsource various aspects of their business. They use in-house teams as conduits to ensure outsourcing goes smoothly and use outsourcing agencies to augment in-house tasks.

There’s a versatility about outsourcing that makes it appealing, ringing true whether the task, initiative, or service must be outsourced entirely or partially.

Does Outsourcing Only Work for Specific Companies?

Small to medium-size businesses can triple their staff size at an affordable price, providing ample opportunities to scale up

Conversely, big companies keep their corporate machine well-oiled by only spending when and where it’s necessary through outsourcing. 

Outsourcing at its best is a dynamic tool that increases revenue, saves time, and empowers businesses of all sizes to evolve.

How Does Outsourcing Reduce Labor and Operational Cost?

A third-party company you hire for outsourcing services utilizes a different pay structure than your company’s. Thus, the work gets done at a reduced cost (sometimes up to 70%), enabling your business to save a substantial sum of cash.

You’re also not paying overhead, equipment, and technology. 

We’ll take the opportunity here to bring up Loanspark. While our services go beyond typical outsourcing, what we do is similar in many ways. 

For example, when you partner with us, your company benefits from our proprietary technology while we run and manage it. You don’t need to hire or pay the salaries of a group of in-house web development and IT experts to use our business lending services. The only responsibility on your plate is marketing–we even handle customer service. 

Images by Loanspark

How Can Outsourcing Improve Your ROI?

Your hypothetical outsourcing partner is usually an expert in their field. 

An ideal outsourcing partner has a specific skill-set that you don’t have time to learn. Moreover, these agencies or other third parties possess unique abilities that in-house teams can’t emulate. 

Instead of being just a helping hand, effective outsourcing partners end up providing a spark to your company’s revenue, generating a significant ROI. They possess a “special sauce” that adds something impactful to your brand.

For example, Loanspark’s proprietary lending platform is a significant part of what we offer. However, we also bring a specific, one-of-a-kind expertise to the table: we are masters in all facets of the B2B loan sector.

Business lending is a highly complex process, functioning as its own individual enterprise. 

Laws and regulations in this space are forever in flux, making compliance a constant headache, especially when lending isn’t your primary revenue stream. Then there’s the need to find legitimate, reliable lending partners since you can’t fund these loans yourself.

While compliance and the other nuts and bolts of business lending might seem like rocket science, Loanspark is always prepared for BLaaSt off. We have relationships with a diverse group of business lending partners and stay ahead of compliance best practices. 

We originate and process the loans for you, too. Furthermore, we possess advertising and marketing expertise to help you sell your co-branded business loans to your captive client base.

How Does Outsourcing Allow Your Company to Diversify Its Product Line?

Often, outsourcing at its most strategic allows you to focus on your core competencies while presenting opportunities to diversify your revenue streams.

More specifically, outsourcing allows you to soothe the pain points of your target market that veer outside your primary product offerings. 

For example, a pain point of many B2B clients is lacking the funds to pay for services. Soothing that pain point entails putting cash in their hand. Enter Loanspark

Our business loans are individual products on which your company earns a commission. You get to enjoy that new, substantial revenue stream without getting distracted from your primary functions as a brand. 

How Can Outsourcing Improve Your Services?

Manufacturing and logistics outsourcing can elevate your level of service because:

  • It shortens your cycle times
  • Speeds up time to market

In the above vein, Loanspark offers you a comprehensive business lending platform that’s up and running in under 14 days. 

Let’s say your B2B clients are really hurting for funds and need financing. Going to an external business loan agent has traditionally been their only option. While this is helpful to a degree, imagine if your brand directly solved this problem. 

We live in the digital age, so you could feasibly build your own lending platform instead of letting your customers fend for themselves. 

However, DIYing a business lending program would take months on the low end, spreading your resources thin and not offering you speed to market.

Loanspark makes your business lending products available almost right away, giving your customers what they need when they need it. Plus, everything happens under your banner, so your brand is the one who's solved your client’s cash-flow problem instead of a third-party loan agent. 

Is Outsourcing Risky for Your Company?

Factors such as timing, budget, big-picture vision, strengths, and weaknesses all dictate how a company outsources. It’s a delicate balancing act. 

There’s some operational risk involved, such as:

  • Loss of control
  • Loss of innovation
  • Loss of organizational trust
  • Transaction costs being higher than expected

These risks can be minimized, though. Proper due diligence and research ensure outsourcing makes sense for your company’s present and future needs. Specifically, it must be affordable in the present and profitable in the future. 

Can Lacking Expertise Be a Problem When Outsourcing?

Needing work done that veers far outside your comfort zone is a primary motivator to outsource. This line of logic, while entirely sound, potentially creates stumbling blocks.

A knowledge gap makes it challenging to know what to seek in an ideal outsourcing partner. Whether we’re talking web development, data analytics, or even a Google ad campaign, for instance, what are the signs that you’ve hired a winner to get the job done?

Filling the necessary knowledge gaps is a massive undertaking, especially as the outsourced task grows more intensive and intricate. 

There’s always trial and error when finding the right fit. You can learn as you go. Still, it’s best to limit these “teachable moments” for the sake of your company’s forward momentum.

Outside of Hiring an In-House Team, Are There Alternatives to Outsourcing?

Is there a way to garner the benefits of outsourcing part of your buyer’s journey without removing clients and prospects from your brand’s ecosystem?

If we’re talking about adding B2B Loans to your product line, the answer to the above question is a resounding yes.

With Loanspark’s Co-Branding solutions, your company’s only concern is marketing our B2B loans.

We’re more like outsourcing v2.0 at Loanspark, an evolved form of a decades-old business strategy. Operational risk, lack of brand harmony, and knowledge gaps are offset because we handle everything under your name.

Image by Loanspark

Embracing the Loanspark Solution

Adding business lending to your product list is a sound business decision.

Statistics dictate that offering B2B loans to your clients will boost the average transaction size by 15% and increase overall revenue by 25%. You also grow brand loyalty, and the loans themselves are an additional revenue stream.

However, DIYing these business loans could put a strain on you and your team. You’ll have to build a backend, find suitable lending partners, and keep up with continually in-flux compliance. 

Yes–you could refer your clients to an off-brand, third-party business lender, but that disrupts brand continuity. 

Then there’s Loanspark. We keep everything on-brand while offering you our vast product list of business loans, along with our unparalleled expertise. 

At Loanspark, Your Brand is Our Brand

With any Co-Brand or White-Label solution, be it a physical piece of merchandise, software, food, etc., you’re getting a completed product to sell under your brand.

As a Co-Brand business-lending solution, Loanspark gives you just that.

We offer a diverse, fleshed-out, proven B2B product for you to sell with your branding. Better yet, business loans are a highly desired product for your target market, with 48% of small businesses not having their financial needs met. 

Even then, we aren’t your traditional co-brand company. A differentiating factor separates our product from White-Label shirts or chocolate bars. Namely, your branding extends across our entire spectrum of services. 

When you partner with us, we build your microsite under your brand. 

We construct your business lending call center, supplying you with sales and support employees that play for your team. They learn the ins and outs of your company culture, talk the talk, walk the walk, and serve your clients accordingly.

Additionally, since we function in lockstep with your company’s branding, your clients benefit from a cohesive, turnkey experience. In one place, they can access all your B2B services, on top of a vast list of business financing options. 

Loanspark also gives clients one more reason to stay within your branded ecosystem. Once a prospect clicks on a link or calls our toll-free number, they’re still interacting with your company. We convey your messaging and immerse them in your buyer’s journey, ensuring your brand remains top of mind.

In a sense, you are outsourcing to us, but we go above and beyond a standard third-party vendor. We’re there for you, 100%, every step of the way. 

Loanspark Does All the Heavy-Lifting for You

After partnering with Loanspark, the only work you have to do is marketing the new service to your customers. Even then, our team of account executives will offer their expertise in selling our BLaaS solutions

Our marketing whizzes help conceptualize advertising campaigns, building interest and recognition for your Loanspark-powered small business loans. We also provide you with marketing collateral such as:

  • Research tools
  • Live chat
  • Affordability calculators
  • More vital product information

Besides being hands-on in ensuring you get the marketing aspects right, we also manage compliance and licensing (we are licensed in 47 states). Additionally, we handle all the funding on your behalf, thanks to our marketplace of business lending partners. 

Loanspark: Where the Present Meets the Future

We’re just on the tail-end of a pandemic. As a B2B business, you’re probably just re-establishing your footing. Reducing operational costs and increasing revenue to compensate for the damage done by COVID-19 are likely your top priorities.

At Loanspark, we respect the present-day, COVID and economy related challenges your business faces. 

Thus, it only takes up to 14 days to make your co-brand lending products available to the masses. You’ll have an additional revenue stream that immediately impacts your bottom line. 

There’s no sitting around and waiting for results. 

However, we’re also keeping tomorrow top of mind.  

Banks have left small businesses who need financing out in the cold, which will not change in the future. Alternative options like our B2B loans will only become more prevalent as the years go by.

As much as Loanspark’s co-brand BLaaS solution will give you an immediate boost, it’ll help you BLaaSt off into the future. Contact our team today, and begin the partnership that sets your business growth into perpetual, unstoppable motion from this day forward. 

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