Looking for More Profit? More Time? Outsource!
“Most entrepreneurs have great talents but many times they think they can do it all,”… “That can really stall the growth of the business. By outsourcing the day to day back-office tasks, the business owner has more time to focus on generating income.”
This quote from an excellent Entrepreneur.com article on outsourcing sums up the struggle for business owners considering how to grow their business in a way that is profitable, but also not draining to their lifestyle or available time.
Often there seems to be only two choices available to owners:
1) Work 60+ hours a week, do most things yourself and make a profit
2) Hire employees to do a good portion of the work for you, work 40 hours a week, lose money consistently.
Are profit and a normal work week mutually exclusive? Is the legend of the business owner succeeding through only their own solo efforts the map for small business success?
Thankfully no. Thanks to modern technology and a quality pool of professionals who work virtually, modern business owners can outsource tasks they don’t have time for while saving on the costs of payroll taxes and fees.
What is outsourcing? Outsourcing is the practice of hiring professionals as contractors to perform very specific tasks within a business. Whereas employees are paid on W-2 wages through payroll, contractors are not paid on payroll and therefore are paid as any other vendor.
Common examples of contractors would include bookkeeping, virtual assistants, payroll providers, graphic designers, IT support etc. Outsourcing provides the expert help owners need, taking essential tasks off of their plates, while also providing a lower cost method compared to hiring employees.
The affordability is great, but the most beautiful part of outsourcing? It allows owners to “pass on” tasks they are not skilled in, don’t enjoy, or don’t have time for (creating Facebook ads anyone?). This allows the owner to spend time on the tasks that only they can do – Creating and implementing the vision for the company, meeting with consultants, spending time training employees, building client relationships and so much more. This could even (and should) include taking some well earned time off. This process allows owners to enjoy some of the best benefits of business ownership, being able to make the final decision on what work they take on and what they would rather not do.
The question then is, “Why don’t all business owners outsource?”.
As with most questions related to small business, it revolves around cash flow. Business owners want (rightfully so) to push costs down as much as possible, especially when their business is in the beginning stages. This is a solid philosophy, when businesses initially open costs need to be as minimal as possible. But it’s also misguided because it misses one key factor. The price of lost time.
How much is the owner’s time worth? How much is each hour of their time worth? If completing the bookkeeping for their business takes 10 hours each month, how much is the 10 hours worth when it could have been used growing revenue or meeting new clients instead? The lost revenue and client connections in those 10 hours can never be made up, while the bookkeeping very much could’ve been completed by a virtual professional.
This doesn’t even add into the equation the stress and uncertainty of completing a task in a field you’re not comfortable with. (If you don’t know what this looks like, try designing a website with no prior knowledge of programming, or, try to create a successful Facebook Ads campaign with only YouTube tutorials…it’s not a fun experience.)
Outsourcing is a proven way to bring the expertise of professionals from a myriad of backgrounds directly into a small (or even micro) business. It’s affordable and best of all, allows the business owner to focus on what they’re passionate about, enjoy an improved work-life balance, and, if used correctly, enjoy a more profitable business with more revenue and increased efficiency. Not a bad deal!
If you’re a business owner, this is something worth looking into. A great first step can be mapping out your daily activities and tasks and then analyzing which are essential for YOU to complete and which can be done by someone else. You’ll likely find you’re spending most of your time doing tasks that someone else in your organization could accomplish and not enough time doing the tasks only you can do.
Next, think about which tasks you enjoy, which you loathe, and which are somewhere in the middle. After you’ve completed these lists you should have a good starting point to start considering which tasks you can begin to outsource so that you can spend more time on the tasks that only you can do.
Have a great experience with outsourcing? Unsure about the process or what the tax implications look like? Feel free to leave a comment below or message me.