Small Business

Evaluating an Outsourcing Partner


Evaluating a prospective outsourcing partner, starting a retail store, determining what a search engine finds on your Web site, and more

Evaluating a Prospective Outsourcing Partner

When outsourcing, hold a mirror up to prospective partners. In other words, seek outsourcing firms with an entrepreneurial mindset, advises Tony Aiuto, an engineering manager at Integrated Computer Solutions, a small Bedford (Mass.), software development company. More often than not, this means avoiding large outsourcing firms in India and other countries.

Based on having outsourced many small-scale R&D projects to India, the Ukraine, and former Soviet republics, Aiuto says, "We deal with individuals who have enough entrepreneurial spirit to want to work" with ICS. "That [helps us find] people who appropriately question our requirements and end up acting as partners in design. The large Indian firms tend to bury us in paper. They produce gigantic specifications about how they will build what we asked for, and they will work to the letter to produce what is in the document—even if it's useless because of a requirements oversight."

Other suggestions Aiuto offers:

Be sure to distinguish between the outsourcing of operations and R&D. The latter requires smaller, more flexible teams than the former.

Build in time to get up to speed with your outsourcer. According to Aiuto, it typically takes six months for U.S. managers to get in sync with the overseas team.

Maintain realistic leveraging expectations. Don't expect individual U.S. managers to be able to work with overseas teams larger than 10 people.

Plan on face time. "I just came back from [the Ukraine] and learned more in two days of face-to-face than I would have in six months of e-mail."

Starting a Retail Store

If you're thinking of going it alone in starting a retail store, you may want to reconsider finding a partner. "A crucial problem for family-run independent (retailers) is overdependence on the owner," say Barry Berman and Joel R. Evans in the latest edition of their textbook, Retail Management: A Strategic Approach, and reported by the newsletter of the Small Business Advancement National Center (for information, e-mail: donb@uca.edu).

"Often, all decisions are made by that person, and there is no management continuity when the owner/boss is ill, on vacation, or retires. Long-run success and employee morale can be affected by this."

Determining What a Search Engine Finds on Your Web Site

See your Web site through a search engine's prism (see BusinessWeek.com, 7/6/06, "How SEO Upped the Revenues").

Have the software at tools.seobook.com instantly (and at no charge) analyze your site for frequency of key words, metatags, links, and other criteria important to search engines. "If your home page has lots of bells and whistles, you may be surprised at how very little of it a search engine spider actually sees," says Larry Chase, an expert in online marketing, who recommends the software in his latest newsletter, wdfm.com.

"Unlocking" a Cell Phone

There is a way to get a new cell phone to "unlock." If you've ever purchased a new cell phone at a special discount from eBay (EBAY), only to find it's coded to a wireless provider you don't subscribe to or want to subscribe to, don't give up, even if your preferred provider is unable to find a way around the impasse.

Take a look at The Travel Insider. Its software has had excellent success unlocking phones. One entrepreneur I know reports that after spending hours with various technicians at Cingular trying to get a Nokia (NOK) phone locked by AT&T (T) unlocked for Cingular, he "spent two minutes and $5 requesting a code. Within 24 hours I received an e-mail and my phone was unlocked in the next 60 seconds."

Can Big Government Destroy Your Small Business?

If the government decides it doesn't like your small business, it can destroy you, as it did Linda Faillace's Vermont sheep farm. In her new book, Mad Sheep: The True Story of the USDA's War on a Family Farm, Faillace dramatically recounts how the U.S. Agriculture Dept. came after the business she had meticulously planned, and eventually destroyed her imported Belgian sheep, based on suspicion they might harbor a type of mad cow disease.

The only flaw in the government's thinking was that mad cow has apparently never been found in sheep. This is a riveting and upsetting story of big-government excess and bureaucratic myopia.

David E. Gumpert covers business/health issues and also writes the biweekly What Entrepreneurs Need to Know column.

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