Now may be the best time to start a new business in some time. What? In the midst of the non-recovery in the wake of the Great Recession, with unemployment numbers at their prolonged highest levels in over 70 years, with consumer confidence dragging belly, you are touting a business startup? As outlandish as that sounds, in the business-to-business market, it may make more sense now than it has in years. As businesses try to rebound from the last three down years, they will be looking to outsource work before they hire new employees. The small business in the B to B market that positions itself well should be in a great spot to get those contracts.

What is the near future of outsourcing? Companies are looking for a safe way to be productive. Before they hire back permanent employees, they are going to look for a flexible workforce. That is not news that comes with a rose petal entrance if you have lost your job in the past couple of years. What that means in the midst of a down economy is the hiring of laborers who can get the job done, but are not tied up in labor laws that force the company to pay benefits, payroll taxes, unemployment insurance, etc. That means companies will be outsourcing the hiring of workers to temporary agencies, sending jobs overseas, or outsourcing their business production to small companies who will work on contract. Let’s take a look at these three options.

Temporary agencies have a great gig as slow economies begin to make a comeback. They take on all the H.R. functions such as screening employees, taking on the employment taxes and benefits, etc. This gives a company great flexibility as the economy slowly warms up. Companies have the ability to buy out the contract of a temp worker and bring them on as a permanent worker when things turn around. Sending jobs off-shore likewise has its benefits. Typically a company can hire cheaper labor overseas. The problem with both temp-agency hiring and outsourcing to another country is that business knowledge is typically lacking. That is where the need for Knowledge Process Outsourcing (KPO) steps in. There is a need for small businesses that bring a lot of business know-how to the table. If you have a niche in business that can bring a high level of value to a company, the time might be ripe for you to start a new business.

There is a large shift that is happening right now in the workforce and the Great Recession has accelerated its impact. The most knowledgeable of our workforce are retiring. (See our article New Year, New Business Changes.) Those who were about to retire jumped ship (or were given a swift push overboard) the past two years as corporations looked to reduce the size of their workforce. The problem with that is a lot of knowledge on how to do business walked off the job permanently. At the point that companies begin to hire again, they will have huge gaps in experience among their employees. This is where outsourcing, particularly KPO will make its impact. Small businesses that can fill in those gaps will be in good position to get work.

So where would you begin if you wanted to start a business in this economy? (Take a look at our article The Marketing Starter Kit.) Banks aren’t tripping over themselves to loan start up capital like they were a few years ago. First, if you have been let go from your old employer, see if there is any benefit to them if you were able to be an outsource vendor. Talk about doing your old job on contract. If you are able to pull this off, you now have a client with a signed contract. Banks are more likely to loan you money if you come to them with real clients instead of a wish list of customers. If the old employer is not a viable option, widen the circle a bit. Start to network with business groups. There are a number of these types of groups (and many online versions, such as LinkedIn) that meet together and share leads with each other. It is amazing who knows whom when you get together. Try to make appointments with C-level officers (particularly COOs.) Ask about gaining a share of their outsourced work. Ask them who they know who could use your services.

 If you can gain a contract, you are on your way. It then depends upon you to make your new business valuable enough to get past your first contract with the new client. When corporations emerge from a long recession, they typically redefine how they do business. Rarely does the workforce look the same before and after a recession. If you make your new business indispensable, you may find yourself as an outsourced part of the emerging workforce and not part of the old sunken dreams.

The five most likely outsourcing trends Thomas and Alex Financial Management Services articles http://www.thomasandalex.com

Trends in Outsourcing Emerging From the Great Recession By Diana J.P. McKenzie and Matthew C. Henderson. Technology Law Section State Bar of Georgia http://technologybar.org

Photo by Nicholas Belton