With all that has happened in the global business scene in the last few years, offshoring has become a popular solution to continue operations. But even with that, you might still hesitate to use it for your startup company. So, let’s look at this one closer and answer all the important questions you might want to ask before driving into it.
Offshoring FAQ no. 1: How Does Offshoring Work Anyway?
As the name implies, offshoring refers to sending some of your startup company operations to overseas providers. It is a specific subset of outsourcing that aims to give your business more options.
Image from Asper Brothers.
Beyond location, offshoring has additional features that make it distinct from typical outsourcing. One is that it is intended to handle complex tasks. In general outsourcing, you can send out smaller ones. On the other hand, offshoring is better suited for sending out a complete role or even a whole department.
That has to do with the logistics of both. Since general outsourcing usually happens in the startup company’s origin country, you can readily implement it. On the other hand, sending work abroad requires a lot of preparation. Hence, you only want to do it for large-scale outsourcing to justify the cost and effort.
Offshoring FAQ no. 2: What Are The Benefits Of Offshoring For Your Startup Company?
With all the work involved, you might wonder whether it is worth the effort to offshore. Several benefits would make it a more suitable option than regular outsourcing.
Access To The Global Talent Pool
Image from LinkedIn.
Sometimes, the available local workforce might not be suitable for your needs. That can be due to things like lack of qualifications or size limitations. Through offshoring, you can access a much larger talent pool. With that, you have a higher chance of getting the right people.
Greater Involvement With Hiring Process
One of the strengths of local outsourcing is that the provider can handle the entire hiring process for you. However, it can also be a problem if you want to get very specific talents. With offshoring, there is greater involvement in the hiring process on your part. You can interview potential hires and get to know them before they deploy to your team.
More Favorable Regulatory Policies
Image from LinkedIn.
Sometimes, you might also find your host country’s current regulatory practices restricting your startup business. Through global offshoring, you can send the work to another country with favorable regulations. That gives you a better chance of accomplishing tasks as intended.
Round The Clock Operations
To be clear, general outsourcing also does allow for round-the-clock operations. However, opting to offshore gives you more flexibility here. You can outsource to countries that match the time zones you need to operate in.
Offshoring FAQ no. 3: What Are The Risks Your Startup Company Will Face When Offshoring?
Like any other outsourcing method, offshoring has certain risks you need to consider. These include the following.
- Data security: With a team located in a different country, you might have less oversight on how they handle and protect company data.
- Loss of business knowledge: Having an overseas team handle your processes might result in your proprietary processes getting exposed.
- Scope creep: The increase in prices for incremental scope changes might be a lot higher than when those for local outsourcing.
- Culture: You should expect cultural variability when working overseas teams. That can affect their ability to work with your internal team.
- Slower knowledge transfer: It will take more time to transfer knowledge from an overseas provider in case of contract end or switching to another provider.
These risks are not insurmountable. But you should thoroughly prepare for them to ensure your startup company can overcome their effects.
Offshoring FAQ no. 4: Is Location Important?
Arguably, yes. The country you choose to offshore to will play a significant role in the effort’s success. Many factors will help you determine the best options for you. Some of these factors include:
- Financial feasibility: Consider how much it will cost to send tasks to different locations.
- Political and economic stability: Your best bet would be a country with a relatively stable political and economic scene to ensure operability.
- Tax implications and treaties: Some countries offer various tax perks and incentives that make them more desirable for business.
Beyond these general criteria, you should account for the ones specific to your industry and business. That will help you select a country that would best accommodate your business.
With all that criteria accounted for, the Philippines is one of the popular offshore destinations. The country boasts a highly skilled workforce that can readily team up with your crew. You can also take advantage of the various tax incentives that make transferring your operations into the country easier.
Offshoring FAQ no. 5: How Long Does It Take To Get Started?
Starting to offshore your operations can take anywhere from a few weeks to a few months. The setup speed depends on the ease of business in your preferred host country. Your chosen provider can make it easier for you by facilitating some of the paperwork before the contract begins.
Image from Celoxis.
Also decide on how long your initial offshoring contract would be. Here, remember that some providers might have a minimum service term. That can be anywhere from three months to two years. Thus, gauge first whether your outsourcing needs fit into that minimum term.
Offshoring FAQ no. 6: Will Youe Startup Company Get Dedicated Staff?
A big challenge when outsourcing is getting the right team. Here, one concern you might have is whether you will get a dedicated team. Luckily, that is very much the case with offshoring.
When your startup company signs up with Virtua Solutions, we will immediately assign a specific team to you. These agents will work with you from the start to finish of your contract. That ensures that they can focus on the work that you send over.
And if you need changes in the team, we can quickly implement that for you. We will handle the hiring process for new members of your team. But you can interview these candidates to get an idea of them before hiring.
Boost Your Startup Company With Offshoring
Hopefully, these answers will give you a clearer picture of what offshoring can provide your startup company. And if you are looking to grab the opportunity, you need the right team by your side. Contact us today and we will show you what Virtua Solutions offers.