Should your Small Business Outsource its Product Development?
When you start a new business venture, one of the biggest decisions you must make is deciding whether to build your product in-house or use outsourced services. There are pros and cons to each option. Below are a few questions to ask yourself in determining whether in-house or outsourcing is the best option for you:
What is your goal?
When it comes to developing your product, you must have a clear idea of what your ultimate goal is for your business. Are you building something novel, or are you improving on a product that already exists? When your product idea is unproven or still uncertain, it typically makes more sense to outsource it to lessen the risk imposed by hiring an in-house team.
Will you share company equity with others?
If you want to avoid equity dilution, then outsourcing a portion of your business makes sense. This is particularly true when you are first getting started. Once you have hit certain benchmarks with your product, then it might make sense to hire a team to build the product in-house.
What is your timeline?
If you are in a time crunch for getting your product to market, outsourcing is the clear option for you. Putting together an in-house team takes a significant amount of time – time that could be used by an outsourced company to get you to market sooner.
What can you afford?
One of the biggest concerns for start-up companies is the cost of outsourcing verses building the product in-house. In many cases, it is more affordable to outsource, particularly with the initial version of your product.
No two businesses are identical, so you must determine what your start-up company is trying to accomplish and how you can affordably do it. Contact a knowledgeable business attorney at Nielsen Law Group for advice on whether to outsource services, how to start a new business, or business formation matters. You can schedule your initial consultation by calling (480) 888-7111 or submitting a web request here.