Outsourcing in the top 5 start-up companies in Republic of Croatia

Abstract

All business entities, including start-up companies seek ways to enhance their financial performance, primarily through reducing expenditure. One of the ways is to use outsourcing services, especially for activities outside their main business activity, such as consulting, accounting, legal services and the like. It is generally ore financially beneficial to pay for these services upon necessity than to invest in the development of their own resources. Therefore, with the purpose of achieving a greater efficacy of their business and improve their competitiveness, they expand the concept of the horizontal coordination and cooperation outside their borders. Research results thus far show that including external partners into a company’s business results in transforming a part of fixed expenses into variable ones that depend solely on their activity. This achieves reduction of total business expenditure, which may result in greater profits for these companies. The aim of this paper is to research the application, representativeness and impact of outsourcing on the success rate of startup businesses through movements of economic efficiency and their activity. The efficiency rate used by the observed start-up companies for its assets in business processes aimed at achieving revenue is observed through total asset turnover ratio, fixed asset turnover ratio and current asset turnover ratio of the companies in the period from 2015 to 2019. Through literary background research we established theoretic basis describing the issues dealt with in this paper. research methodology is based on a questionnaire (Appendix 1), financial reports analysis and notes accompanying financial reports through the selected financial indicators.

Keywords

• start-up companies
• outsourcing
• business economic efficiency