In-house vs outsource: what’s best for your trade business?

Making the decision to keep certain jobs in-house vs outsourced is not always straightforward.

Trying to figure out the best option for your business is not easy. And there is no ‘one-size-fits-all’ solution.

So, in this article, we’ll explore the pros and cons of each. That should help you make an informed decision about what’s best for your trade business.

It’ll also help you find the work/life balance that’s right for you.

Choosing between outsourcing or in-house

Let’s first outline the meaning of in-house and outsourcing:

• In-house refers to an activity or operation that’s performed within a business using its own employees and time
• Outsourcing is when a business hires the services of someone outside of their business to undertake tasks or complete business activities

Outsourcing allows you to spread the load by working with outside experts, for as long as you wish. In contrast, in-house requires you to commit to a long-term hire with fixed costs related to salaries and benefits.

Either way, you want to be sure you’re managing your time effectively.

In-house vs outsourcing examples

As a professional tradesperson, your evenings and weekends are precious. They can so easily become swamped with admin and paperwork.

It can also be challenging to balance getting your current job done. That may be answering new customer enquiries and lining up the next job.

Then there are the jobs critical to your business that you dread or they consume too much of your time. These include bookkeeping and accounting.

If this sounds familiar, you have two options to help you manage the juggle:

• Keep it in-house: employ someone (either part-time or full-time)
• Think about outsourcing: For everything from call handling, email enquiries, appointment booking and paperwork to bookkeeping and accounting

Choose a virtual assistant

For simpler tasks, think about using a virtual assistant. Don’t worry, they’re not a robot but a real person.

They are your own personal assistant who works for you for a few hours only regularly. Virtual assistants can be a low-cost, time-saving alternative.

Outsourcing on larger jobs

As your trade business grows you may want to take on larger jobs. But if you lack the manpower it could be tricky.

Outsourcing to ‘staff up’ your team for bigger projects could be a good solution. Or you could outsource skills that you need to win bigger jobs.

For example, a kitchen fitter might outsource plastering work. Or a landscape gardener might outsource building a pato to a construction expert.

In-house vs outsourcing pros and cons

With more of a grip on what in-house and outsourcing mean and some of the typical tasks that can be outsourced, let’s look at the pros and cons of each option.

In-house: pros and cons

There are a number of factors to consider when bringing people on. Even if only on a short term contractor or as a subcontractor.

Pros:

• Complete control over every aspect
• Work is done to the standard you desire
• A dedicated team of employees that you can train and develop to deliver your services

Cons:

• Hiring employees can be expensive
• Recruitment costs time and money
• Other costs include providing a workspace, equipment, training, salary, and benefits
• You’ll be responsible for having the correct insurance and covering things like sickness, absence and holidays

Outsourcing: pros and cons

As a small business, you might only have the budget for a part-time assistant. However, outsourcing opens up the possibility to afford a more experienced professional – like an accountant.

On top of that, outsourcing some tasks of a project also means:

• A great way to save money and increase efficiency
• A very quick solution that you can set up in days
• You’re outsourcing to an expert, not someone who needs to be trained

And if you’re nervous about committing to a permanent hire, outsourcing gives you the scope to enter into a more flexible arrangement. You can choose how much support you need and for how long.

Do remember though, that you will need to let go of having full control of the quality and timing of the business activities you choose to outsource.

You may also need to accept there could be challenges with communication, especially if your outsourcing provider doesn’t work the same hours as you.

When should a trade business outsource?

As we mentioned earlier, there isn’t a one-size-fits-all answer as to whether you should outsource or keep it in-house. It varies from business to business and task to task.

Here’s a selection of questions you can ask yourself to help decide:

What business activities are most time-consuming or painful for you?

As a plumber, for example, your core skillset is within plumbing-related tasks. You might not have the time, resources, or expertise to handle your bookkeeping and accounting.

Outsourcing will help to improve your efficiency, focus on your core competencies, and trust these tasks to experienced professionals.

What’s your budget?

As a small business, you may not yet have the funds to employ someone. Look at your budget and decide.

Outsourcing, however, gives you access to high-quality services in a more cost-effective way. This can help you to keep your costs under control.

Are you willing to relinquish some control?

When should an organisation choose not to outsource? Well, if you prefer to maintain a high level of control outsourcing might not be for you. Keeping tasks in-house is likely to better suit you.

What level of flexibility do you need?

Outsourcing has the great benefit of being able to scale your resourcing up and down in line with the demand for your services. As we referenced earlier, this can be done fairly quickly too.

Bring in more sales leads as your trade business grows

Whether you choose in-house or outsource for your work, you need a steady workflow. That’s where Checkatrade can help you.

Checkatrade members receive our help with finding more leads in their area. There are lots of other benefits of Checkatrade membership too.

They include:

• Dedicated membership advice team
• Work guarantee up to £1,000 (T&Cs apply)
• Access to dedicated trades app with exclusive quoting and invoicing tool
• Up to 20% off Public Liability Insurance
• Offers giving reduced cost of workwear and branding
• Savings on other business essentials such as vans, fuel and materials

FAQs

Is outsourcing better than in-house?

Outsourcing can sometimes be better than in-house due to the flexibility it offers. You can scale up your resourcing quickly using a network of skilled professionals to complete tasks for you without a long-term commitment. It really depends on your preferences.

What are examples of in-house vs outsourcing?

Doing things yourself – or getting staff to – is in-house. For example, managing your social media yourself, rather than getting an agency to run it for you. Using a bookkeeper, virtual assistant or accountant who’s independent of your business is an example of outsourcing. So is bringing in other tradespeople who don’t work directly for you to help on a job.

When should I think about outsourcing?

If a job is getting too big for you to do on your own. Or if it requires trade skills you don’t have. If there is enough budget on a job to be profitable and outsource work that saves you time. Also, if you are happy to hand over control of certain aspects of a project to an outsider.