Three legs provide support for a stable platform. It will not rock. On the other hand, if any leg fails, the platform will fall over. This is a proven model for a successful business organization. One leg is “sales;” another is “production;” and the third is “administration.” Each has a different purpose, and all are necessary.
The function of “sales” is to make promises for a business. The function of “production” is to keep those promises. The functions of “administration” are to enable the leaders of a business to operate within the bounds of regulation and perform in an economically sensible manner. A large business with hundreds or even thousands of employees hires specialists for each function. What does a small business with fewer than 100 employees do?
The secret to success, I think, is alliances with strategic partners. It has long been a business axiom that professional services provided by bankers, lawyers, accountants, insurance agents, etc. Even large businesses usually don’t engage their most trusted advisors as employees. The model is well established and proven by years centuries of practice. Outsourcing is OK. By the way, your business should realize that its customers are outsourcing the production of goods or services you sell. It’s hard to be completely self-sufficient. Without someone else outsourcing, you don’t have a business.
The significant question is what to outsource. Accountants call this analysis, “buy or make.” The issues are quality, reliability, cost and availability. Quality and reliability define the characteristics and features that all suppliers must meet. The tie-breakers are cost and availability. If it’s still a tie, I choose my friends.
When there is enough work to be done every day, an employee is a good choice. When requirements fluctuate or where special skills are needed only occasionally, outsourcing is usually a better choice.