What areas of my work should I be outsourcing?
We all know that there is plenty of our workload that could, and probably should be done by somebody else. But is it really as easy as just finding a VA or other service provider outsourcing it all? If you haven’t tried outsourcing before it can be hard to know where to start.
It isn’t unusual to feel a little overwhelmed when considering outsourcing. Especially when your business is still growing or for those of us who might feel the need to keep hold of everything. Let me talk you through how outsourcing can save you money and increase revenue. We’ll consider how much it costs your business to have you focusing on everything. All whilst trying to be the expert in all areas. Then we will look at ways to identify areas that you MUST do yourself and which areas you really MUST take off your desk to allow you to continue to grow.
It’s hard to let go, how do you get started?
We can easily to see how small business owners and early career entrepreneurs find themselves doing everything. It is equally easy to understand how we convince ourselves that we are saving our business money by doing so. Few businesses can afford to appoint a whole team of support from the outset. Suddenly we find ourselves working 60, 80, 100 hour weeks buried in our business. Its easy to see how so many entrepreneurs find themselves burned out or with clients beginning to feel neglected.
Before we go any further into how to start outsourcing ask yourself two questions.
- do you know your value?
- What is your hour or day rate?
If you don’t know your numbers, then you are at risk of continuing to believe that it is cheaper and more cost effective doing it all by yourself. Once you value yourself and know what that value looks like in monetary terms then you can see the true value of outsourcing. You will see clearly how not doing the work will save your business money and free up your time to focus on building the business. The extra time will allow you to increase the revenue building activity that you can undertake.
If you don’t know your numbers yet then you really need to fix that. We have a guest blog coming soon with an excellent accountancy friend of mine who will help you to start to work this out. Check back soon or subscribe to our newsletter to see the article as soon as it is published.
So you know your numbers, what next?
Now you understand and respect your value and you are clear on what your hourly and/or day rate is. It’s time to think about how much time you spend on tasks that don’t require your specialist knowledge. Be modest and honest about this. How much time do you ‘spend’ each day on emails, social media, or any other areas. You might like to add in to that customer onboarding, customer care and complaints. It is likely that this is several hours or more every single day. Is it any wonder you feel like you never see the end of your to do list? Remember to include that quick check of your emails in front of the TV. Interruptions to family time over the weekend, the habits that have crept into life so you find that you are never really switching off from work.
The number of hours you are losing to these tasks is likely to be significant. Don’t be too concerned though, as Michael Gerber outlined in his book the E-Myth many ‘would be’ entrepreneurs fall into this pattern in the adolescence of their business. You have most likely become what Gerber refers to as a Technician. You have likely walked away from a career, left behind the benefits and security of a job looking for flexibility. I’m sure you relish the challenges and greater freedom but on reflection you may find that you have created your very own JOB only this one probably has less security and benefits than the one you walked away from.
Time to reflect.
Step back and identify the areas of your business that require you to undertake them. Now you can begin outsourcing everything else, you can get back to being an entrepreneur, build your business and see the revenue streams increase. Still thinking that this sounds too expensive or your business can’t afford the added expense? then let’s go back to the numbers. If your business were to pay you, at your hourly rate, for those hours being spent on administration and other non specialist activity what would it cost each month? That’s a pretty big number right? A big cost to your business that is most likely stopping you from earning any money whilst you do it. Which might also be preventing you from pursuing other lucrative income streams because there simply are not enough hours in the day.
Now work out how much more work or how many more clients you could take on if you had those ‘admin’ hours back. If you could invest your time differently? That’s also likely to be a pretty big number. If we consider that the average hourly rate across the VA sector is around £25-30 per hour, they are often charging less per hour than you charge your own clients. Now it isn’t as simple as just multiplying the hours you are currently spending on admin by £25. You must also consider that bringing in an administrative expert means that the tasks will be completed in the most efficient way possible. So you are likely to find the tasks take considerably less time and quickly start to happen behind the scenes with no involvement from you.
Example of how outsourcing reduces costs:
If you are spending 1 day per week, 8 hours on administrative tasks and other areas that do not specifically require your input and your hourly rate is £50. Your involvement in these tasks is costing your business £400 a week/£1600 a month that’s almost £20k per year. Its also an entire day a week or up to 52 days a year when you are not focused on revenue generation, client contact or business growth.
Even if we assume that you find yourself outsourcing a full day of work every week at £30 an hour that’s a saving of £160 per week/£640 per month and almost £8.5k every year. So, whilst it is still costing your business money you suddenly have an extra day per week to work with clients and generate money. Suddenly you have the potential to earn an extra £400 every week if you invest the time well.
Seems pretty obvious when we break it down doesn’t it! Let’s get down to the real business then. How do we identify what we could/should be outsourcing. With my clients I always suggest that we start with a list or two. What can I say? I’m a Virtual Assistant I love a good list. Take a blank piece of paper and begin to list all of the tasks that you do – this is everything you get involved with specialist and non-specialist duties. It is an interesting exercise to start this list in the back of your diary or in the notes on your phone and add to it periodically over time. Don’t worry if it is a huge list, you will be forgiven for wondering how you fit it all in.
Lets get back to your To Do list.
Grab a highlighter and revisit that list, clearly mark the specialist tasks with a coloured spot in the margin. We’re nearly there, back through the list again, this time I want you to highlight all of the revenue generating tasks so they stand right out at you. Brian Tracy tells us in ‘Eat that frog’ that three core tasks that you perform contain most of the value that you contribute to your business’ Not 30 or 300 just 3! You may not have it whittled down to 3 just yet but here they are, standing out front and centre on your list, the tasks that you should be focusing the most time and effort on. This is where your expertise lies and this is how you grow.
Now there will still be some areas that you marked as requiring your expertise which are not highlighted as revenue generating reconsider these for a moment and ensure they genuinely need your input and that only you can deliver on these. Not everything you do will be revenue generating, however you do want to ensure that it mostly is.
What about the non-highlighted tasks, that’s simple these make up your list of duties to be outsourced in the first instance. You might want to break them down into the tasks that are the biggest drain on your time, the areas that you are least able to undertake efficiently yourself and the areas that you enjoy the least. However, you might be ready to hand everything over.
You are ready to start outsourcing.
Let’s recap, if you are working harder than ever and not reaping the benefits you need to ensure that you know your value and you know your hour/day rate. Then you must reflect on what you are doing each day and ensure that as much of your time as possible is spent on income generation rather than mundane, essential yet non-specialist tasks. If you don’t have a clear list of the tasks you only you can undertake and another list of tasks that need to happen but don’t need your knowledge and expertise, then I suggest you start one soon.
If you are ready to start outsourcing or are curious to consider the opportunity of outsourcing in more detail then I would love to speak to you. Here at Freedom from Tedium we have a team of expert and professional administrators ready to make life easier for you. Book your free initial consultation now: Call Anita 07912 625369 or email me using firstname.lastname@example.org. We look forward to doing business with you.
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