Mature industries like banking, pharmaceuticals and insurance have been outsourcing for decades – even before the term became popular. These verticals have standardized processes in their industries which enable them to easily scale – based on the economy and market conditions.

Because outsourcing has become available to small business owners and online professionals, you can now expect the same level of scalability, efficiency and cost savings that exists in other well-managed businesses that leverage outsourcing.

According to a report titled “Global Sourcing Trends in 2009” by U.S.-based law firm Morrison and Foerster:  Most outsourcing transactions intend to produce immediate improvements to the bottom line for businesses. While this is a common reason to outsource, with fluctuating economic times like we have been experiencing lately, the flexibility to scale up or scale down (based on the business’s needs) has been the determining factor to outsource.

Smart executives are using outsourcing to build flexibility and scalability into their businesses—and to gain access to a global pool of skills at competitive cost.

The recent economic downturn led many companies, especially those who don’t have existing outsourcing contracts, to consider outsourcing. But companies who already have outsourcing agreements are re-evaluating their outsourcing decisions to find providers that offer more business continuity and integration.

In an environment where Fortune 500 companies have disappeared overnight, a successfully executed outsourcing partnership could make the difference in a company’s ability to ride out these challenging times. The flexibility to bring on needed help and expertise in times of growth – without committing to a project contract or adding people to the payroll, has been an invaluable solution to the small business owner and online professional. In addition to providing scalability, this also allows the owner to focus on core competencies of the business.

Outsourcing provides businesses with instant scalability and service flexibility, as well as reducing overhead costs.  One of the major advantages of outsourcing is that companies can now get the best from new developments without the expense.

In terms of new technologies, new processes and new ways of doing things, you don’t have to invest to do that in-house.  Outsourcing is also particularly beneficial for new businesses, or those looking to expand their operation. This includes those who do not necessarily know what hardware or software they will need.

Outsourcing providers with more experience should be able to advise companies about where to spend their money, so that they do not waste time and resources.

Any hesitation to outsource may be affecting your company’s chances to effectively scale for growth in this highly competitive business environment. As a small business owner or online professional, carefully consider your outsourcing partner when looking to expand your business and make it globally competitive.  When considering a company for outsourcing, make certain that they are equipped to handle the ebb and flow needs of your business when scaling up, and when scaling down!

The value of having a Plan B should be familiar to most small business owners. However it seems that the concept of contingency planning is overlooked all too often with regard to commercial loans and working capital strategies.

One of the most entertaining and effective depictions of contingency planning can be witnessed in a movie called “Rare Birds”. This movie stars William Hurt and includes a particularly relevant line, “Always have a Plan B”, that is repeated several times. The movie should be seen by any business owner who doubts the importance of contingency plans.

The usefulness of a Plan B mentality is likely to be beneficial to many aspects of running a successful business. For various reasons, however, contingency planning appears to be under-utilized when business owners are seeking new working capital via business financing strategies such as commercial mortgages and business cash advances.

Contingency planning might be under-utilized when business owners are seeking commercial financing simply because business borrowers assume that there are not effective alternatives to the working capital financing they are seeking. As a result, many business owners might believe that it would not make sense to explore a contingency financing plan. A practical benefit of viewing the recommended movie is that it will become second nature to realize at times like this that businesses should “Always have a Plan B”.

Plan B contingency business financing can be viewed as insurance to protect a business owner in the event that something goes wrong with their working capital management. A few examples are provided below.

First, many small businesses have commercial loans that contain recall provisions that permit the lender to review the financing each year. With such terms, the lender can continue a business financing role for some borrowers and selectively eliminate what they consider to be marginal loans by exercising the recall clause. If they do, the borrower will need to pay off the entire loan or refinance within a limited period of time. The best solution for avoiding this possibility is to review current business loans and explore Plan B refinancing options if recall terms are included.

Second, a number of local banks throughout the United States have recently decided to pull the plug on future business financing. When they do so, very little advance notice has been provided in most instances. If a business has commercial loans or commercial mortgages with a regional or local lender, a Plan B should be developed for the contingency that alternative business loan arrangements could be needed in the near future.

Third, many providers for business cash advances are notorious for making unrealistic promises regarding the timing and terms for their financing. To prepare for this increasingly-common possibility, business owners should engage in thorough discussions with a working capital advance advisor before proceeding. Unlike the first two examples, in this case the Plan B approach must occur before financial arrangements are completed.

Fourth, many lenders for SBA financing, commercial mortgages and business opportunity loans are equally guilty of over-promising and under-delivering. This seems to occur disproportionately with local banks. Similar to the recommended business cash advance approach, commercial borrowers should pursue Plan B contingency financing. The ideal timing for discussing alternative commercial financing options is before committing to a specific lender.

“Always have a Plan B” is the connecting theme for the examples described above as well as other circumstances in which contingency planning is appropriate for business financing. The presence of a Plan B mentality is likely to contribute to many aspects of running a successful small business in addition to improving commercial loans.