You wear many hats. But are they all a perfect fit? I bet there’s a responsibility or two someone could do a little — or a lot — better than you.
“Outsourcing, coincidentally, is also one of the top ways to help your business focus on what you do best,” says Peter Martin, finance and growth consultant with K·Coe Isom.
Why Focus Pays
Not only does outsourcing align tasks with skill sets, but it also provides expense control and improved cash flow. How? Essentially you transition fixed costs to variable costs.
Variable costs, such as hourly labor, fuel and seed, can change per your wishes and are often tied to production output. Outsourcing has a long history in agriculture, Martin explains. Spraying, harvesting and other tasks have been outsourced for decades.
“But, driven by economics and the skills of outside sources, it will become increasingly common in nontraditional areas,” he says.
Think about the tasks or duties where you and your team don’t necessarily excel. An example might be human resources. “Few farms have HR departments, but you’re all dealing with HR issues,” Martin says. “Outsourcing this fixed cost will not only get you the HR expertise you need but keep you from being saddled with the fixed cost of HR personnel. Some HR services cost just $40 to $50 a month.”
Other examples could be record keeping, financial analysis or data management.
Don’t just outsource something you don’t want to do. Instead, look for tasks that fall into these general categories:
- Executive-level expertise.
- Highly repetitive tasks.
- Specialized knowledge or tools.
Offload and Outperform
Regardless of your farm’s size or type, I’m sure you can find a way to shift responsibilities to a more efficient approach. Depending on the task, you may even be able to employ a family member who lives in a different city or that great small business on Main Street.
“Moving fixed costs to variable costs isn’t a new concept,” Martin says. “But it’s a smart one for both good times and bad. It’s about looking at your operation, figuring out your weaknesses and finding ways to offload the costs and activities that keep you from being the best producer and the business you want to be.”
