When you work for yourself, it can be tempting to do all the business related tasks yourself to save money. But is this cost effective? Could you actually be wasting time and valuable money on things that are cheaper to outsource?
A high proportion of our customers are entrepreneurs and by virtue of this fact, many of them work pretty much alone. Whether from a rented office or the spare room in the house, a lot of people these days are contractors, consultants or some other type of “skill for hire” who trade their talents for money.
However, even as a “solopreneur”, you have to keep records, balance the books and make every effort to get your accounts done in time. You’re essentially a business and as such, you need to do all those things that the government expects of you.
Many small firms will attempt to keep costs low, though, by doing all this themselves, and this is the same for the solo worker. For much of the time this is fine, if you only have a few customers or the work is repetitive and constant, it’s probably quite easy to keep track. When it gets complicated is when you have to start tracking receipts, expenses and other costs.
I’ve known many a small business owner who, once work has finished for the day, will then begin on their tax return or some other bookkeeping task that sees them working unto the early hours. Again, that’s fine, some people have a knack of being able to work late, but sometimes it encroaches into the working day, and that’s where it gets tricky.
We bill customers, why not ourselves?
When you’re working on a project for a client, there’s every chance you’ll start a timer, like the one in ProProfs Project. A timer gives you a record of how much effort you’ve put into that customer’s work, and you can then bill them for that time. Seems OK, but do you do this for yourself?
Many people don’t. To many, the dull work of accounts, or filing records or even reconciling the bank is an unfortunate part of the job which just has to be done. This is obviously true; it has to be done, but do YOU have to do it?
The key time that you HAVE to protect is the time you bill for your clients. Every minute spent working on a client’s project is money in the bank. Every minute spent working on your own accounts when you could be working for a client then has to be analysed. And you need to be honest with yourself. We don’t bill ourselves, but we should, and you might then find that it’s cheaper to get someone else on the job.
Time the work, wake up to the waste
It’s easy enough to do. In ProProfs Project, simply set up a project for yourself, call it “Paperwork and books” for example. Then, add all the tasks you need to get done that week. Now, whenever you’re working on the company essentials, click the timer.
At the end of the week, work out how much money you just lost because you weren’t working on a client’s project!
But I do it out of hours anyway!
That’s fine, but when you’re not getting any sleep, you’re not as effective a worker. Your client’s projects will suffer so you have to make a call – is it OK to be sub-par when working on the stuff I’m good at, or should I get an expert in?
And of course, you don’t have to hire someone permanently, you can outsource a lot of the work. Let’s face it, your customers have outsourced to you.
Very often, for example, a bookkeeper can get all the work done quicker than you ever could, and they’re probably cheaper.
Many company owners I’ve spoken to have said that the most cost-effective business investment they ever made was to outsource the dull admin work. When doing it, they freed up valuable time, got more rest and felt good that they’d handed it over to an expert.
In fact, the majority of business people I’ve spoken to will admit that by letting go of the drudgery gave them more time to acquire new customers, resulting in a much better cash-flow and a better business life all round.
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