Differentiate Business from Hobby

There is a thin line differentiating a hobby from a business. Some times it is difficult to label the activities which you undertake. It is important that you must know the difference between the two, so that you can give them the importance they deserve. Whether you don’t know in which category your activities fall, yet they still take time of your life and you are spending a bit of money on them as well. In this peace of writing we shall discuss some of the major factors which help in classifying your activities as business or hobby.

Is there a Monetary Value Attached? The obvious difference between a hobby and a business is the monetary value attached. If you incur a certain amount of cost and expect to have some return over it, then most probably you are running a business. And if you invest and don’t give a dime about the return; then the activity can be classified as a hobby. And it is solely an activity you do in your leisure time.

Is there some Objective to the activity? You have to ask yourself that what is the objective of the activity you are performing? Is it just for pleasure or there is some commercial aspect attached to it? Take the example of blogging, if you are blogging just for the purpose of sharing your feelings and communicating with other people then it can be considered as a hobby. But if a friend asks you to share your feelings and experiences for his web site, then there is a whole new commercial aspect attached to your blogging hobby. So now it can be considered as a business, because by the end it generates or assists in generating profit for your friend’s website.

Do you frequently perform the Activity? The other thing you need to observe is that how frequently you are performing the activity? Whether you have a specific time assigned to it, or you do it on daily basis and sometimes you just perform it abruptly? If you undertake some activity and do it any time of the day and have no specific hours devoted to it; and perform it when ever you wish of doing so, then this activity can be your hobby. Because you are not committed to it; and perform it just for the sake of pleasure. While on the other hand when you perform the activity in specific hour of the day and perform it frequently without any postponement then this activity has the prospects of a business.

Do you put emphasis on the way Activity should be carried on? Another way to differentiate between a hobby and a business is the emphasis you put on its management functions like planning and organizing. If you properly plan and organize an activity, like the time its going to consume, the resources required, distribution and prioritizing of tasks involved in the activity, in what manner the resources will be utilized and how presentable your activity should look; then the chances are the activity you are under taking is surely a business. While on the other hand you neither plan nor organize any of the factors affecting your activity then it must be considered as a hobby.

If your answer to any to two of the above factor is YES then it would be realistic to presume that you are running a business. And if the answer is NO, then it is merely an activity to amuse you in your leisure time.

General Characteristics of a Successful Entrepreneur

When it comes to business the world, the word ‘entrepreneur’ needs no introduction. The word has a French origin meaning “go-getter”. In recent times many myths have surrounded the whole concept of entrepreneurship and the factors involved in its success. A successful entrepreneur is not the one who comes up with a break through idea or has a unique personality trait. But it mainly is subjected to perfect execution of the idea and persistent hard work. The main traits and characteristics required for an entrepreneur to be successful are discussed under:

Passion and a sense of achievement: An entrepreneur must comprise the crucial characteristics of passion and sense of achievement. Passion is what makes an entrepreneur superior to all other fellows. You must be willing to sacrifice a large part of your daily life to your objective; and never let a specific sense of achievement diminish in your attitude. A passionate entrepreneur is the kind of leader that inspires the whole team and once the team is passionate the ultimate result is a satisfied and loyal customer.

Agility: An entrepreneur must be agile. You must be flexible and adaptable. If you are agile then it is just a matter of time that you get hold of an idea, which is overlooked by other mainly due to their fragility. You must be always observing and always open to the changes taking place. As change is the only constant and if you don’t keep up with it your venture can never be successful.

A Leader: An entrepreneur must possess great leader ship qualities. Because you can come up with an idea or frame work of it; but you need a team to execute it. And a team always looks to a leader for inspiration. You must be a great convincer so that team could believe on the prospects of the venture and be inspired to achieve it.

Perseverance: An entrepreneur needs to be persistent both in terms of dedication and hard work. No entrepreneurial success is overnight, instead it involves days and days of hard work. So you must keep your eye on the goal and never loose hope, and continue your journey with utmost hard work and dedication no matter come what may.

Focus: No matter you have a unique idea, but if it is not executed successfully its another waste of time and resources. An Entrepreneur should never leave focus. You should keep the ground realities in front of you and then try to develop strategies accordingly rather then merely relying on the exclusiveness of your idea.

Ethics: You must not let go ethics out of your hand. Ethics may include but is not limited to honesty, integrity, sincerity, courtesy and trustworthiness. You can have a temporary success by adopting unethical and immoral means but the secret to long lasting success is being moral and ethical.

Experience counts: Experience though not a prerequisite but is the factors that gives great potential to your business and increases its prospects. If you or your team has some past experience it surely will come handy at one point or another.

Be Rewarding: And last but not the least be rewarding because at the end it’s a team effort. You need to share the fruit of your success with those who have contributed in its becoming a reality. This sense of sharing keeps the team motivated and more involved in the whole effort. If you are not being sharing; the ultimate result would be the team loosing its interest, subsequently serving as a hindrance in future success.

Summarizing above we can conclude that a successful entrepreneur must posses the qualities of a great leader along with constant determination and a never flinching faith on his/her venture and team.

The Right Time to Start Business

Most people having a unique idea wait there whole life for the right time to implement it. When speaking to most of the successful entrepreneurs you will get to know that any time is the right time to start a business. If you keep on waiting for the right moment to pop up in front of you; you may never come across it. The reason being when you are waiting for the moment, some one else is already exploring it and finds it before it reaches your doorstep. There are two aspects which you need to consider before stepping into a business. Firstly you have to analyze that whether you are a business person yourself or not. And secondly you need to analyze the economic environment and business trends.

First comes your own personality. No one knows you better then yourself. You have to analyze whether you have the kind of personality that can manage and run a business. You must be agile so that you are able to adapt to changes. Be a keen observer so that you are able to identify problems instantly and rectify them. Have some good negotiation skill because business is all about how good a negotiator you are; whether it be your employees or clients. You must also be a good leader, a leader that can motivate and inspire his team. And above all you need to be a good manager, who can bridge up the gap between cost and profit, one who understands the processes involved from production till sales. All in all you have to decide whether you have what it takes or not? Because no one can judge you better then you.

Second thing that predicts the right time for a business is the economic conditions. You have to analyze the business trends and economic environment before stepping into the business world. In recent times of economic depression, when people are jobless; and willing to work on low wages it would be a good time to enter business world. Similarly if you want to enter construction business and there is depression in the industry then don’t enter. Because no matter the labor will be cheap but what is the use of it when at the end no one buys your construction and you fail to sell it. The other growing trend which you have to keep an eye on is the trend of outsourcing. When it comes to outsourcing you need to observe and asses the economic trends of whole world. You need to identify from where you can access low cost professionals and intellectuals if you are in services business. On contrary if you are in production business, you need to identify locations across the globe where you can find cheap labor, where the prices of raw material are cheap and from where you can minimize all the supply chain cost.

All in all in an abstract manner there is no specific right time to start a business, any time is the right time. But if scientifically analyzed, the right time is when you can harmonize your personal traits with the economic environment. So when you are sure that the economic conditions suit your kind of business and you are in right health to manage it, that would be the right time to take your shot and hope for success.

Different Legal Structures for your Business

Many of the entrepreneurs face the dilemma of what legal structure to adopt for their business. All the legal structures like S corporation, C corporation and LLC. come with different advantages. But it is for sure that these advantages depend on the nature of business you want to establish. So before adopting any legal structure you have to make sure that it suits your business and facilitates its growth.

An S corp. structure under the US federal law is the one that provides the benefit of partnership taxation and along with that protects the owner by providing limited liability from creditors. The income of S corp. owners is taxed only once by the state, and they don’t have to pay the personal income tax on profit as is the case with LLC. An S corporation are separate legal bodies and the state provides the share holders with liability protection as in a C corp. But the con of an S corporation is that it has a restriction of 75owners/shareholders to the maximum. And the additional constraint with in is that; none of the owner can be a non resident, because an S corp. is established under state law. The managers or directors are the ones that manage an S corp.The other compulsion in an S corp. business structure is the equal distribution of profit among owners. An S corp. offers no flexibility in the process of profit sharing; the profit has to be shared equally no matter if the owners think otherwise.

A C corporation shares some what same characteristics as an S corp., but there are certain procedures in which it differs from an S corp. Firstly a C corporation can have as much number of shareholders as it can; and with out the constraint of them being domestic or foreign. The second difference between the two is in the step of profit sharing. Unlike S corp. ,a C corporation can share the profit among their share holders as they will to do so; without any constraint of equal distribution. Their are other tax deductions involved such as 10% income tax deduction which is applicable to charitable contribution deductions, and also a C corp. is subjected to dividend received deduction.

An LLC. is a blend of corporation, partnership and sole proprietorship. It is a flexible structure with very minimum constraints. Though LLC. is a business entity but it is not a corporate rather it’s an unincorporated association. The principal feature which an LLC. shares with a C corporation is that it provides its owners with limited liability. And the feature shared between an LLC. and partnership is the characteristic of pass through income taxation. It offers more flexibility compared to a C corp. and is more accommodating to the business with single owner.

So if you are a running business and are considering changing your legal structure, you must thoroughly familiarize yourself with the advantages and drawbacks of the respective legal structure. On the other hand if you are an entrepreneur and are about to establish your business, you must have a deep background research on the type of legal structure that suits your unique business.

When to Outsource

You are a business owner who works around the clock to complete all tasks, but no matter how hard you work you still find yourself lagging behind on your goals. This is the time when you think that it would have been nice to have a helping hand. Who shared the same passion and dedication as you do! So this is the time when you should seriously consider outsourcing. Besides not achieving your goal there are many other factors that trigger the process of outsourcing. Some of them will be briefly discussed in this writing.

Too much to do: When you are putting all of your efforts and you still find the business falling short of its goals. Then is the time you should outsource certain processes of your business. The processes you should outsource can be like telemarketing, book keeping, and online marketing. Outsourcing these processes will help you focus more on the core processes of the business. So when you think that trivial matters are taking up most of the time and you are unable to focus on the major aspects that would be the right time to outsource.

Increasing Cost: When the business is in the long run cost is most definitely to increase. You have to hire work force, spend on marketing, setup additional work space, this in other words means an increase in your cost. Which you can’t do because of limited budget. This is the time you should consider outsourcing. Because usually outsourcing is done to under developed countries; where all aspects of business establishment, and running are cheap. So when your cost is increasing outsourcing will help in reducing that cost and ultimately increasing profit in long run.

Growing Human Resource requirement: When a business is to grow it is most definite to have an ever increasing requirement of human resource. But you are a small business and can’t afford to have additional workforce as a contingency plan, because that would be a liability. So when ever you require additional human resource in growth process of your business you should give a thought to outsourcing. Because when you outsource you hire professionals and managing them does not end being a headache to you.

Establish a Rating System: I order to identify the right time to outsource, the best technique would to establish a rating system. The system should be establish on the basis of task priority. Supposing if a task does not measure up to 7 on your rating scale you should outsource it. It gives you the space to identify and focus on the processes that are crucial in your business success.

When you require expertise: Let’s suppose that you start of as a small business without any intentions of expanding. But suddenly you realize that there is an opportunity waiting to be explored. But in order to capitalize on that opportunity you require some specific expertise. This is the time when you must give outsourcing a shot. Due to the fact that hiring new individuals is a time consuming process and you are never sure of the selection. So here outsourcing comes in because they have the professional expertise you require, you just have to select the right one. And from there on its their responsibility and you get a skilled workforce without even going through the whole recruitment process.

The right time to outsource varies from business to business. But what all the successful business person and entrepreneur advise is to do it in the beginning .Because when  initially you have distributed work process then you wont over work yourself and additionally it gives you time to focus on future.

General Reasons for an Entrepreneur’s Failure

Every now and then you hear of an entrepreneurial venture breaking through like a revolution. But what most of the people don’t see is that the rate of entrepreneurial success is far low compared to the rate of failure. There are many who have a unique idea but a few who see the idea to its successful completion. It is not only the uniqueness of the idea that makes an entrepreneurial venture success full, there is a whole bunch of other factors involved. In this writing we shall discuss the common mistakes which an entrepreneur makes or in other words, certain factors which an entrepreneur fails to grasp that eventually result in the failure of a venture.

Insufficient Research: One of the immediate causes of the failure of an entrepreneurial venture is the lack of research. Many of the entrepreneurs are so overwhelmed with the exclusiveness of their idea that they just ignore the importance of research. Whether it is the research of market; or an analysis of demographics of their intended audience. You must have prior knowledge of the market before you plan on entering it. You must be familiar with the trends of the market, demand of the customer and how your unique product or service is going to influence the behavior of present market and persuade them to be inclined towards your exclusive idea.

Lack of Capital: What most entrepreneurs fail to realize is that they have to be in business for a long run but they have the capital for short run purposes only. They rely on the success of their venture and assume that the sales would generate revenue for the business in long run. But this is not the case; sales usually come gradually and after a substantial period of time. So you need to have sufficient capital at hand to make the business running till the venture is established enough that it can generate sales and take care of itself.

An Understanding of Business: As many of the entrepreneurs manage their business themselves, so not having sufficient knowledge of the business processes is one the many reasons why an entrepreneurial venture fails. You must have a little know how of how the business processes work, what laws and legislation can effect your project and what loop holes you need to cover to ensure the smooth flow or business processes. If an entrepreneur fails to grasp the fundamentals of a business, then the venture is doomed to fail.

The Right Team: Success of an entrepreneurial venture is not a sole effort rather team work. You may have a unique idea, you may also have some know how of business essentials but if you don’t have the right team to execute your idea then the result will be a break down. Most of the ventures fail solely due to the incompetent work force. So in order to execute your idea successfully you have to have right people at the right place.

Marketing Strategy: The most common and the major reason of the failure of an entrepreneurial venture is the incompatible marketing strategy. Most of the entrepreneurs fail to devise a suitable marketing strategy that suits both the target market and the product. So before developing a marketing strategy you should have a clear picture of what you want to target and how do you want to go about it. Because no matter how great your product is but if it does not reach to the target market and does not convey it specifications properly it is bound to fail.

All in all we can say that in order to be a successful entrepreneur you have to be agile and adaptive to the changes taking place. You must keenly observe the trends of the market and last but not least have the back ground research before stepping into the venture.

Challenges Confronted by SMB

Small businesses are usually found in the form of sole proprietorship, partnership and privately owned corporate. Over the passage of time SMB have seen a boom as compared to larger businesses. But as simple as it would seem this boom does not come with such an ease; there is a long sequence of hindrances which a SMB has to overcome in order to be successful. In a competitive environment of now days if a single aspect of business is over looked or ignored the whole venture can end up in a failure. In the lines under we shall discuss about the general problems faced by Small & Medium Businesses:

Limited Capital: The first and most important concern of a SMB is either non availability or shortage of funding. As said earlier many of the small businesses are privately owned or a partnership. So capital is the nucleus around which the success or failure of a small business mainly revolves. If you have sufficient capital to initiate a business but have overlooked the hidden costs involved in running the business your project would be under-capitalized. And once a business is under-capitalized from there on it’s a down hill ride. So before starting a small business you must take all the hidden and evident parts into consideration so that you don’t run short of capital.

Lack of Human Resource: Lack of human resource is also one of the major hurdles which SMB face in their progress. SMB run under a very strict budget so having an over sized human capital as a contingency plan is totally out of question. With human resource the main problem starts with firstly finding the right individuals, secondly to motivate those individual to work at their optimal ability and capability. And finally is the issue of retaining the trained Human Resource. Because training an individual means incurring additional training cost and additional cost is one of the luxuries which an SMB can’t afford.

Myth regarding Management: The myth surrounding SMB is that a person having some specific technical expertise would be good in running that kind of business as well. Which is totally wrong; having technical expertise makes you the master of that specific field. On the other hand in order to run a business efficiently you have to be jack of all trades not just master of one. Supposing if a person has expertise in IT, then it is not a guarantee that that person would turn out to be a good Business manager in IT. Because besides IT, it is a Business as well and business have its own tricks of trade. Which having prior knowledge of IT can assist in mastering but is not mandatory to do so. So SMB face this dilemma of finding the right person to monitor and run their operations.

Large Corporation predicting the success of SMB: Though small businesses have their own market to compete with, but it is mainly the large enterprises that predict their success or to the least the magnitude of it. The reason how small businesses survive is by offering low cost alternative to the product or services offered by large corporate. But what if the product offered by large business has no alternate? Or if it does have one; it exceeds the cost limit of the small business. This is how the role of large corporate becomes crucial in predicting the success of a small business.

Marketing Strategy: Devising an effective strategy is also another aspect where small business face difficulty in order to penetrate the target market. The mass advertising medium like TV is too much expensive for a small business. So they have to rely on other cheaper mediums such as radio, banners, billboards and word of mouth. All these medium though effective; but have a very limited market. So this is another dilemma which a small business has to go through before building a marketing strategy.

Other Costs: Compared to under developed or developing countries SMB face a whole different scenario in terms of laws and legislation in developed countries. In developed countries there are other costs such in the form of insurance and taxes enforced by legal regulatory authorities. These are the additional cons which an investor has to face before starting a small business or even to keep it running in long run.

Summarizing all above we can say that a small business has to face a lot of hindrances in order to establish itself and once established it has to be on its toes to tackle and cope up with all these obstacles in order to insure its survival.

Seven Primary Benefits of Outsourcing

When it comes to business, outsourcing is one of the most growing and booming phenomenon. Outsourcing entered into the business dictionary since the world has become a global market. Outsourcing comes with a lot of benefits, the chief of which will be discussed in lines under:

1. Reduced Cost: One of the major benefits of outsourcing is the minimal cost of labor. The ultimate objective of a business is to increase profit, and one of the means of doing so would be by reducing cost. Usually business processes are outsourced to the under developed or developing countries which have low per capita income hence the cost of labor out there is cheap. So whether it is a manufacturing or services process that is to be outsourced, the cost of labor will be definitely low as compared to the more prosperous nations.

2. Focus on Core business: The business processes usually outsourced are not the one that are core processes of the business. Processes like Call centers, book keeping and online marketing are most common to be outsourced. Which though crucial but are not the core parts of a corporate or business. So once these processes are outsourced the business can focus all its energy towards more important matters of strategic importance such as strategic planning, corporate brand management and development of new products and services.

3. Time factor and Customer Satisfaction: When a process is handed to the firms that deal in outsourcing, they make sure that the delivery of the projects is timely and without any delay because the offshore firm can easily loose their business their core business for being sluggish. The delivery of product and services made timely onshore results in providing better product and services to the customer. Hence increasing the level of customer satisfaction.

4. Competitive Advantage: Outsourcing serves as a mean to increase both efficiency and effectiveness. The processes are outsourced to organizations that possess the professional expertise. And on contrary to the parent company these firms take the processes as their core business. The focus of a BPO is on increasing their effectiveness and efficiency which ultimately gives the competitive edge to the parent company in its domestic environment.

5. Professional Expertise: One of the reasons why organizations outsource is that they can’t bear the load of their work force either in monetary or workspace terms. Outsourcing helps in filling this gap by providing better human resource. The firms involved in handling outsource process possess the necessary skills and intellect in terms of workforce. So once there are low cost professionals involved, their can be no doubt about the quality of the work.

6. Minimal Risk Factor: Every business is subjected to risk factor. Government policies, market situation, technological changes, financial systems all change very quickly. Outsourcing providers manage this risk factor on their own without influencing the primary business onshore. This allows the Parent company to have one less thing to worry about and stay focused on the main business.

7. Small Business playing ‘big’: The reason why small business lags behind to major corporate is the non availability of all the above mentioned factors. A small business can also act “big” by outsourcing offshore and have the same grounds available which a big corporate possesses onshore.

In a nutshell, Outsourcing entails revolutionary benefits for a business. It serves the business in both qualitative and monetary terms. Qualitative in a way as by increasing efficiency and effectiveness and the later by reducing cost. Hence helping a business to prosper and reach new horizons.

 

Outsourcing and Global Impact of Outsourcing

Outsourcing and Global Impact of Outsourcing
Outsourcing affects every part of the business whether it be Sales, supply chain, logistics, human resource development or managed print service. If outsourcing is managed effectively it can result in high profits, low cost of labor and better quality of work. But on the other hand if there is mismanagement in outsourcing the results will be devastating in the form of all workers losing their jobs, loss of investment and customer dissatisfaction.
When taking into consideration the global impact of outsourcing, it has its prose and cons. The advantages are usually enjoyed by the country to which the business processes are outsourced. A few of the pros of Global Outsourcing are as under:
• Global outsourcing can easily save cost and resultantly save the company by outsourcing the work to poor nations where the labor is inexpensive like India, Pakistan, Philippines and China.
• Secondly Global outsourcing can provide with diversity in labor both on intellectual and craftsman ship levels. India and China are a perfect example of it, the former producing 870,000 IT graduates a year and the later mastering the art of reverse engineering and producing goods at a very low cost.
• When a company outsources to an under developed or developing country it brings foreign investment into that respective country. Which helps in accelerating the economic process of the poor country by creating a multiplier effect, i.e., the money that is brought into the economy as a result of outsourcing is spent on local goods and services.
• Outsourcing also helps in increasing the living standards of the poor country. Though the labor is cheap as compared to the home country but is better in comparison to the country outsourced.
• And last but not the least is the moral impact of global outsourcing. Outsourcing helps in closing the gap between richest and the poorest nations, consequently bringing world peace and prosperity.
Global outsourcing in recent times has shown some disadvantages as well. And the country on the suffering end is mainly the one that outsources its business processes. A few of the ways in which business process outsourcing proves to be disadvantageous are as follows:
• If the process of outsourcing is not managed effectively the result would be every one losing their jobs both in parent company and in the BPO. Because an ineffective outsource would result in loss of time and money, which results in lowering of profit and consequently downsizing.
• Outsourcing can also result in misrepresentation of the parent company. If the BPO does not comply with the quality standards due to incompetent work force the whole process would serve as a detonator for parent company and demolish its brand image.
• Political risk is also one of the major cons of global outsourcing. As the countries being outsourced are mainly under developed countries like India, Pakistan, Bangladesh and Sirilanka; so there is a high risk factor of political instability. Political instability influences the quality and timely completion of projects, which if not achieved makes the whole objective of outsourcing useless.
• The greatest disadvantage of Global outsourcing is the loss of intellectual property rights. A person developing software for companies like Google, Microsoft or Apple has no intellectual right over the software he/she develops, Instead whole credit goes to the parent company. In this way the inventor or developer is deprived of the rights of his/her creation. This is complete injustice morally and sheer exploitation economically.

In a nutshell we can conclude that outsourcing impacts globally in both positive and negative manner. It all depends on the how the process is managed, if handled badly outsourcing can damage the corporate image, weaken its brand and result in low quality of goods and services. But on the other hand if the process is managed efficiently it could result in saving a corporation from sinking and making it stand again on its own feet.

Advantages of Outsourcing

Advantages of Outsourcing
Outsourcing is a process wherein business agreements with a third party service provider to provide services that might otherwise be performed by domestic employees of the business. Its purpose is to get good quality work at low cost. It has been in existence as long as work specialization has existed. Mostly, a company outsources those functions that are regarded non-core to the business or such functions which needed specialized skills unavailable in the open market.
There are many good reasons to consider outsourcing that is why demand of outsourcing is increasing day by day. Some of the most significant advantages are stated below.

Cost Savings: Probably the most familiar reason to consider outsourcing is to access cheaper labor. Workers in developing countries are paid far less than workers in developed countries due to the lower cost of living there.
Reduce Operating Costs: The operating costs of outsourced work are lower than if your company executed the operation itself. For example, an employee that is not working on site means you do not have to buy and retain a computer for him. It also means that you spend less money on electricity to power the computer. The savings can be stupendous depending upon your business operations.
Access to specialized skills: Third party service providers provide services of experts. Actually, to vanquish competition, third party service providers keep honing the skills of its employees. Also, it boosts particular skills in its area of activity. Business gets approach to such specialized skills by outsourcing to such a service provider, which may be of use in some other field of operation of the business.
Quality Services: The third party service providers transcend at the services they provide, businesses are guaranteed of better quality than a domestic employee would give. Moreover, any service provider always looks to give the best of services to get and maintain good reputation.
Capacity Management: Sometimes non-core function need more hands to meet deadlines. In such times, it becomes difficult for an in-house employee to handle the pressure. However, if the function is outsourced, the hindrance of meeting the deadline is of the service provider. Furthermore, the service providers have notably large talent pool at its disposal; it can easily assist such issues.
There are some disadvantages of outsourcing according to few reports but its benefits are much more than their disadvantage that is why outsourcing is highly recommended.
Linguistic constraints: Linguistic barriers are faced most of the time in outsourcing due to accent, phrases and if the first language of the nation is different from that nation which outsources the function.
Social Responsibility: Outsourcing reduces the employment avenues in the nation from where the function is outsourced, which is against the social ethics of the business outsourcing the process. But outsourcing results in a higher profitability for the businesses which are then tilled back into the economy. This definitely has far better impact than the negative impact of growth in unemployment. In fact the negative aspect is widely nullified by the positive impact of profit getting ploughed inside the economy.
Company knowledge: An in-house employee has a greater knowledge of the company and its business as compared to a third party but any service provider can compose the same kind of knowledge provided there is a structured knowledge transfer from the business to the service provider.