How to Start a Business Process Outsourcing Company
Business Process Outsourcing Companies are hired by companies to help them take some burdens off them. Many organizations leave business process outsourcing companies to do the “dirty job” they don’t want to do, and many BPOs have built multimillion-dollar empires through it. Business process outsourcing companies get jobs for other people, and starting a BPO is not very difficult, depending on your area of specialization.
The business process outsourcing industry is relatively new, and it has reached even greater heights since the advent of the internet. This article will discuss the advantages and limits, your responsibilities, and how to start a business process outsourcing company.
Advantages of starting a business process outsourcing company
A BPO’s services aren’t only beneficial for them but also for the company they are outsourcing. These are a few reasons why this business favors all parties involved:
Companies spend less
What every company wants to do is make more money- that’s the first thing on their minds. Whether they are making huge profits on the sales of products or services they provide, they want more. And if “more” means spending less money to run the company, then that’s what they will do. The quest to achieve this goal is why organizations hire the services of business process outsourcing companies. Starting a business process outsourcing company is beneficial to both you and your clients in that you both make a profit. The moment your company is awarded a contract by a firm to be in charge of a portion of their business, they leave the rest to you. For example, if you were to be awarded an outsourcing contract by a telecommunications company to handle the cleaning of the premises, it’s now your problem. You will provide the janitors, and no matter how much it cost you to get them ready for the job, it would all be from your purse. Even though your company would not be affected, your clients would have spent less compared to if the janitors were core staff members.
It means the companies share responsibility
Just as making money whatever means necessary (legally, though) appeals to organizations, handing over some responsibility comes next to it. The willingness of these companies to share some of the burdens that come with handling their businesses make hiring BPOs like you a grand idea. When a company permits you to take charge of an aspect or division of their business, they typically close that chapter and focus on other things. It might seem a bit careless for a firm to give a BPO an important contract and not keep both eyes on them, but that’s why they’re hiring you. For this reason, companies make sure they hire the best BPOs in the industry so that they can sleep with both eyes closed. For instance, if a company is outsourcing the customer service unit of their business, the salary of the customer service reps will not be their problem. Providing welfare packages, organizing training and workshops, attending to labor union issues will not be their responsibility either.
Limits of starting a BPO
Dependence on third parties
While splitting responsibilities between your company and an external company sounds like a great idea, it also comes with its limitations. Most firms don’t outsource main sections of their business to third-parties, which is why people deem those departments less critical. The fact is that every unit of a company plays its role to ensure its success, and by letting an external body take charge means that the company will be losing its self-dependency. Not being able to depend totally on themselves and their resources means that they are putting their life in some other company’s hands. If something goes wrong from their end, regardless of whether they could have managed it better or not, it will affect their business. In cases where a company outsources outside the shores of the country it’s sited; they would be sweating over the state of affairs in the region. Conflicts, riots, government restrictions, among other things, can affect their productivity which would be felt by the company.
When companies outsource, they relinquish control in the process. As far as the sector they are outsourcing is concerned, there will be very little control over what goes on in there. The members of staff might not even know the actual company they work for- all they know is the BPO. Even though these companies are paying you to handle an aspect of their business, they would also have to admit that they are surrendering control to an outsider.
The risk of re-shoring
There are quite a number of terminologies in this business that are simpler to understand than they sound. Re-shoring is when a company outsources a portion of its duties to a firm outside the country but, for some reason, has to bring the business back home. Re-shoring is nothing any company would wish for because who would go through that much trouble overseas if they weren’t serious? And also, there’s hardly anyone that would want to start a business overseas without being sure it would be worth it. Some factors make companies re-shore like political unrest in the overseas region, a reduction in productivity, and higher cost of production. The moment when outsourcing overseas no longer serves its purpose, they get re-sourced somewhere close to home. There is always uncertainty when it comes to dealing with companies outside of your own, and this could lead to re-shoring.
Your responsibilities
The intermediary
The core companies would rarely have direct contact with the staff you bring in; to reach out to them, they’ll contact you. Sometimes, the terms of the agreement your company and the company you’re outsourcing for warrants that they aren’t supposed to “meddle”. Only in rare cases will there be direct contact from them to your staff. If changes need to be made, they’ll tell you and not them. You will be the middle-man between both your team and the company. If they are unhappy with the turnovers, you will hear it. And if they are pleased with the efforts of your group, they’ll let you know.
Assess candidates
Every candidate or worker that would be coming from your firm must be qualified, and that’s your job. Since the parent company has given your firm the go-ahead to run the affairs of a sector, you will determine who’s fit for the job. The criteria for ascertaining how qualified a candidate is will be sorted out by your company. The company that you are outsourcing for has no business with assessing any worker under you; they trust you to bring in the best men and women. If there will be a written or oral test, you will be both examiner and supervisor of the process.
Recruitment
After you must have finished assessing the candidates according to the standards set by you, the ones you are satisfied with get employed. The employment of each worker in your unit depends on you. The company that’s given you leeway to outsource has no business employing anyone under you. The offer letter, all the necessary information pertaining to the candidate’s history, and the salary structure will be communicated by you. The one who employs can also send one packing, and even if you do sack a member of your staff, your client won’t object.
Train candidates
The firm that has hired you knows all the stress bringing new faces in can cause. They know you will spend money, and they know you might have a hard time discussing paychecks with new employees. To avoid all that unnecessary trouble was why they called you. Training new entrants cost money and time. In most cases, professionals in specialized fields are invited (and paid) to train candidates on how to perform better. For this, you would need to figure out what areas they need to develop and what skills they need to improve before hiring suitable professionals to give lectures.
Give employee benefits
Just like any other corporate organization, your workers deserve to have benefits that come with working in this sector. Since the company you’re representing is paying core staff as well as granting them loans, paid leaves of absence, among others, you should do the same for yours too. Some outsourcing companies, especially in developing countries, have a bad reputation in this regard. Some deny and withhold every benefit from their workers because they know that their clients will not interfere. Running a successful business of this magnitude requires fairness.
Provide a work environment
It is rare for the company that has given you an outsourcing contract to also provide an office for you. You have to give the office where work will be carried out. Other vital resources you will need will also be provided by you. The office space, the physical resources, and every other resource are to be put in place for your workers to function properly. With this, you are inclined to brand the office building your way. The security of lives and property at the office will be your concern. You will make sure to site your office where it is safe for everyone involved.
Man management
The human resources in your branch will answer to you; good or bad, they are yours to deal with. Running a BPO is a lot of responsibility as you will cater to the needs of your workforce and get the best out of them. It is up to you to find the best principles to have your workers delivering. If there is a crisis that’s probably from the company that hired you, your workers will demand answers from you. Managing the situation no matter whose fault it is will be your concern. Conflict resolution and keeping the peace will be yours to handle as well.
Organize job interviews
Hiring workers is a process. There must be an event where you will be able to bring a potential workforce together and assess their skills. The method of evaluating a candidate for the job will occur on the job interview day. Job interviews can be advertised or posted across job platforms and other websites; few companies these days advertise in papers. Then a venue is picked for screening the candidates. Planning the interview questions, summoning a panel of interviewers, fixing a date for the event, getting a venue, and placing adverts for the interview will be yours to take care of.
Negotiate salary
You’re responsible for paying workers their wages based on what you will be receiving from your client. The moment you start employing competent people into your system, you would be letting them in on how much they are set to earn. All the company you are representing can do is perhaps advise you and supply you with the funds to pay staff as agreed. You must see to it that whatever you are offering is feasible, and there won’t be any hiccups from your end.
Pay workers
Seeing that most (if not all) the important aspects of running that part of the company are done by your firm, paying staff will not be left out. Besides bringing the recruits in, training them, and getting them settled in, their pay will also be sanctioned by you. At the end of the month, week, or day, workers from under your jurisdiction receive their wages directly from you. The paycheck will have your name written on it. It is as if you own a separate company, and people work for you, so everything about their work has your company’s name inscribed on it. Apart from a pay structure, payment methods, VAT or tax withdrawal or addition according to the law, will be done by you. In case of trouble with paying workers, your client’s hands are tied because it’s probably part of your agreement for them not to interfere. If there is trouble with paying staff and it’s your fault or someone from your firm, you’ll be the person to sue.
How to start a business process outsourcing company
Register your BPO
Having a registered business brings peace of mind; it means you’re doing something right. A company will not be registered if it doesn’t meet government requirements, and that’s what your goal should be. The first thing to do is to have a plan for your company. A business plan could be what eventually saves your business in the end. It’s the rule book, the company’s blueprint, and the image you want the world to see when they look at your company. A business plan containing records of all the functions, projections, objectives, financial obligations, needs, and other vital information about the company is necessary. Your business plan could be requested to register your business. The bank details of your company could also be needed for registration. Once registered, you can open your office. Most top organizations will never hire an unregistered BOP.
Know about the industry
One of the best things about being a business process outsourcing company is that you can start with little to no experience. Running the business will come with its challenges, but you can grow into the business. Even if you have never outsourced for a company, at least know about the field. If you are outsourcing for a medical laboratory, for instance, then you should at least know your way around the medical area. That way, if the ones you hire to do the job err, you will know and possibly correct it.
Start small
Launching your own company, you should start from the bottom. The experiences you gather during your time of learning the ropes will get you prepared for the future. If a loan is not necessary, don’t get it. Sometimes, a small company is what you need because you must figure out the business for yourself first before bringing people in. Let your office be small or set it up from home, and only take on small projects you can handle. Ignore tasks for a group of workers and focus on individual projects, at least for the first few months. If you get projects or contracts that require a handful of workers, make yourself part of the team. Soak up all the knowledge and save more money.
Be a specialist
Selecting a niche to focus on will give you a sense of direction and purpose on this path. One thing you should never do in business is to compare your startup with the giants. If they have a thousand workers, they earn a lot, but they spend a lot too. The top outsourcing firms can afford to hire professionals in almost every field, but for a starter, it’s best to stick to a niche or two. The most important thing is about knowing the lot you choose to outsource well so that you can troubleshoot quickly. Instead of going for any contract you see, select an area you’re good at and focus on getting clients in that sector. Your experience, academic background, qualifications, and even connections will be what you look at before choosing a niche. If you’re a writer, look for opportunities in writing. If you studied human resources management, you could go after HR contracts.
Get competent workers
If you want to get into the outsourcing industry and get treated like those in the big leagues, you must have the strength in depth to earn it. The bigger the clients you want to target, the more gifted your business should seem. Top clients will invest millions of dollars in the outsourcing project, and they want to make sure that they are giving the contract to the best in the business. They will make sure that the people they want to work with or for them have all the necessary physical resources as well as human resources to perform.
The quality of personnel you choose will be more important than the quantity, especially when you’re just starting the company. As you begin the business, there might not be any reason to employ many. What matters the most will be the quality of your team. You and your team are different from the candidates to be outsourced to other companies, so your team’s criteria must meet your demands. They will work with you to prepare candidates for jobs, recruit them, and even promote them. Make sure the ones working with you are qualified; some clients purposely check the credentials of your business’ talents.
Secure an office
At the beginning of your career as an outsourcing agent, you might get outsourcing contracts for individuals. Not all outsourcing jobs are for a group of workers; therefore, you could do them yourself. Since you will only need one or two persons, managing them will be easy. At this stage, you can make your residence your office. As time goes on and as you start getting more prominent clients with long-term projects, you will need not only a larger workforce but also a proper office. Choose an office space that suits what you do. Make sure the office can be easily accessible and safe.
Source projects
As you start navigating through the waters of outsourcing, you will find contracts for individuals and shorts projects easier than the big ones. Both massive and small projects will not fall on your lap- you have to look for them. With the demand for freelancers on the rise, it is easier to have small projects that will only need one or two extra hands. Even though you want the big ones, the small ones will at least pay some bills. Freelance websites like Upwork and Freelancer are a great place to start looking. You can also look out for adverts online, newspapers, and other media.
Nothing brings in more profit than outsourcing for top organizations, but it is not a walk in the park, making their acquaintances. Depending on what type of BPO you want to be involved in, you must start to make plans to meet and greet. Look out for opportunities and send proposals to companies to increase your chances of getting a contract. Use your online presence to get closer to your potential clients and get more hint on how to get into business with them.
Conclusion
The business process outsourcing industry is vast; before starting a company in this industry, eradicate every notion of taking on everything you find. Your business will only thrive if you keep on marketing it. Let it begin with you; start as both boss and employee before adding any extra help to your roster.