Table Of Contents
3 Questions To Ask Before Outsourcing Roles In Your New Startup
Last Updated on: September 5th, 2025
Let’s be honest, launching a new startup is not easy. You only need to look at historical trends to get the picture.
The U.S. Bureau of Labor Statistics points out that only 34.7% of businesses born in 2013 were still operational in 2023. To put it simply, only one-third of businesses survive a decade.
There are many reasons for this, but as you can imagine, the complexity of starting a business is more than some people expect. To make things easier, many entrepreneurs turn to outsourcing for startups.
It certainly looks like the go-to solution to spread out the responsibilities of an operation, but, unfortunately, successful outsourcing isn’t without its challenges.
Before you begin hiring people across the world, there are a few important questions you need to answer. Let’s look at three of them today.
Outsourcing For Startups: Questions To Ask
If you are thinking of outsourcing for startups, there are a few questions you should ask, and a few things you need to consider.
1. Which Roles Should Actually Be Outsourced?
Many new entrepreneurs fail to understand that some roles are deeply connected to the core of the startup.
As Remote, a global HR and payroll platform, explains, BPO or business process outsourcing works for almost every operation. It would work for a Fortune 500 firm and also for your local mom-and-pop business.
Customer support tends to be one of the biggest focuses when it comes to outsourcing, but you really need to consider your position first.
While it may be a good move for an established business, as a new startup, customers are still testing the waters. If they have trouble with your product and no one from your in-house team can help, it’s not the best look.
Outsourcing customer support has many benefits, but many people expect new businesses to be hands-on with help. At least in the early stages, outsourcing may be more suitable for backend or non-client-facing work.
2. What Risks Are You Willing To Share With Your Outsourced Team?
While there’s no denying that outsourcing is very attractive for entrepreneurs, the benefits also come with some risks. For instance, many startups work on products that have high intellectual property value. Are you willing to risk the possibility of IP theft by outsourcing?
Some countries, like China, appear to have a less-than-stellar reputation when it comes to respecting IP laws. One report published by The National Interest speculates that AI models like DeepSeek might have developed rapidly due to stolen IP and banned Nvidia chips.
They highlight that the country’s 2016 cybersecurity law states that all data within its borders belongs to the government, which makes IP security particularly challenging.
If that’s a concern you’re worried about, you could consider outsourcing to another country like India. However, the risk of IP theft will always exist to some degree.
Thus, you may need to use an India Employer of Record (EOR) service to help create some form of legal framework beforehand.
Remote explains that an EOR takes on the legal and compliance obligations, which also include protecting your IP from theft or misuse.
This is typically done by creating watertight contracts. That said, the cost savings tend to make some entrepreneurs less hung up on the risks. Let’s consider that aspect next.
3. Will Outsourcing Really Save You Money All The Time?
On the surface, the cost savings do exist. However, improper outsourcing can also incur hidden costs in the form of management overhead. Moreover, even with good coordination efforts, there might still be some general productivity lapses here and there.
Sometimes, outsourcing to a firm that bungles a project could mean starting over from scratch, which happens more often than you think. Such incidents can end up offsetting any savings you make with outsourcing.
This is why it’s critical that you investigate each firm or contractor that you intend to outsource to. You might need to pay them a little more than the lowest bidder, but it just might save your operation more money in the long run.
It might also be a good idea to keep an eye on AI for even more cost savings. Axios highlights findings from the recent State of AI in Business by MIT.
It turns out that AI is predominantly replacing outsourced offshore workers. Currently, the replacement rate is 3%, but in the long term, it could reach as high as 27%.
Benefits Of Outsourcing For Startups:
Outsourcing is a powerful strategy if you are aiming to grow efficiently and stay afloat in the competitive, fast-paced market.
Here are some of the key benefits of outsourcing:
- Cost-saving workforce: Outsourcing lets you take advantage of lower labor costs. Moreover, it allows you to reallocate funds towards growth and strategic initiatives.
- Enhanced efficiency and agility: It allows you to allocate the right kind of skills at the right time. Moreover, it allows you to maintain focus on core competencies and improve operational efficiency.
- Removes recruitment roadblocks: You tap into a talent pool and access specialized skills and expertise that you might find difficult to look for locally. It improves the capabilities of your team without the challenges of recruitment.
- Elevates service delivery: Outsourcing lets you deliver high-quality services consistently, improves customer satisfaction, and enhances the reputation of your brand.
- Builds a high-performance workforce: You get a high-performing team through outsourcing and can build a cross-functional, dynamic team.
Make A Sound Decision…
All things considered, if you’re thinking about outsourcing for startups, it’s still a great way to cut costs.
However, as we’ve learned today, you’ll need to plan ahead a little more than entrepreneurs did in the past. The best way to go about things would be to remind yourself that outsourcing is but a tool.
What really matters are the needs of your new startup. Try your best to ensure that outsourcing actually meets your needs and isn’t something you do because everyone else does it.
Read Also:
