When you start your business you have grand plans. More often than not, you went into business to make the most of your particular area of expertise to offer services or sell a product.
As soon as you make the decision to take the plunge, it’s “just you” and you end up doing everything. *Sigh*… that’s not much fun when you have to be the admin person, bookkeeper, receptionist, cleaner, customer service officer etc! That’s on top of actually providing the service or producing the product and marketing it. It all sounds awfully tiring to me, and guess what, it is!
On the other hand, as start up business owners, it’s a good idea to tackle all these areas at first to appreciate our strengths and weaknesses, and understand what it takes to keep the business running smoothly. However, it’s important to understand when to let go of certain tasks rather than hanging onto them to try to save money.
Consider the true cost of doing everything yourself
It’s all well and good to keep as much money in your pocket as possible, but at what cost? Take the example of doing your own bookkeeping. You’re probably doing it half heartedly, not giving it the attention it deserves. You’re also being distracted from your main area of brilliance and you have less time to spend on marketing and growing your business.
Consider your professional hourly rate or charge out rate. Your time may be worth $100 per hour. You’d pay a bookkeeper perhaps $40 per hour. Therefore, each hour that you spend doing your own bookkeeping, you’re in effect “wasting” $60 per hour. The more time you spend on tasks that are of lower dollar value to your charge out rate, the more you’re holding your business back. If you want to grow your business, you need to outsource peripheral tasks.
What should you concentrate on?
So, what tasks should you be concentrating on? Revenue generating activity and client work are the only things you should be working on. Revenue generating tasks include marketing the business, and developing new products/services that will deliver revenue in the future. By concentrating on these activities, you’re making sure that your business will continue to grow beyond the boundaries of where it currently operates. If this area is neglected, the business will stagnate and will not move forward. If you think you don’t have the time to develop new products and services, please check out my article called “Leverage your time by creating packages and products”.
How do you go about outsourcing?
So how do you go about outsourcing? All too often we’re so excited that we’ve finally made the decision to outsource that we literally “throw” tasks at someone and expect them to be completed. In some cases, relying on someone else’s initiative is a great thing, but if you’re very particular about how your tasks get done, this approach may not be the best. You really need to develop systems around your tasks and then hand the systems over.
This is where I really like using virtual support as it makes you clearly define exactly what is required on paper because you can’t sit beside them and “show” them what is required. Document your processes and utilise online systems to ensure that all tasks are being completed with easy communication between parties.
You cannot afford NOT to outsource
But what about cash flow? What do you do if cash flow is an issue and you feel you can’t afford to outsource? Let’s look at a few things in relation to this question. First of all remember that you outsource any task that is not your area of brilliance. Taking the example of your bookkeeping: you complete your bookwork begrudgingly, only when you have to and only so you can get your bills paid, keep money coming in and fulfill your taxation requirements. It stresses you out each time you tackle this task and takes you a considerable amount of time.
Now imagine the alternative scenario of outsourcing your bookkeeping to someone who can really look after your needs – i.e. us! Your bills are paid on time, your cash flow is healthy, your taxation requirements are being met and you’re starting to understand the numbers of your business.
When you look at your bookkeeping costs, in pure hard cash it might seem expensive, however when looked at from the perspective of “value” you and your business enjoy as a result, it’s like gold! Not only have you recaptured the time you spend on bookkeeping, but you benefit from the peace of mind of knowing that it’s being taken care of professionally. Let’s assume that you save 10 hours a month – imagine all the revenue generating tasks you can complete in that time. The time you’ve been struggling to find for ages has just made itself available. If you look at it from this perspective, you cannot afford NOT to outsource if you want to set your business on a growth path.
Be careful though as the “busy” stuff can easily fill this time. If this is a concern, reread my article called “How to find 96 days each year to grow your business”. Although the ‘cost’ of outsourcing may appear to be greater than its perceived value initially, the tides turn as you become more effective at working on revenue generating tasks and start growing your business.
Eventually you will begin to see a direct link between outsourcing and the growth of your business and its profits.
P.S. Want to learn more about how to outsource?
And do you struggle to get things done in your day? Are you super busy keeping up with all the “busy” work in your business? And what about those projects you’ve been dying to implement but can’t find the time?
Click to read about Bizfficiency. The program that will help you take back control over your life, reduce feelings of overwhelm and finally set your business on a growth path.