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Outsource to grow your business

I did a talk this week about how to increase the profits in your business without increasing your sales.

One of the areas I talked about was outsourcing the areas of your business that distract you from actually growing it.

A survey carried out by the FSB in 2016 concluded that UK small business owners spend an average of four days per month on internal business administration, while 55% believe the amount of admin they face is stunting the growth of their companies.

76% of small business spend more time than they feel is necessary on compliance – tax, pensions, insurance, health and safety, accounting (and now, of course, GDPR).

They concluded that the average SME small business owner spends only eight hours and 50 minutes on average per month on developing new business. That leaves a lot of time spent on all this other stuff! Does this sound about right to you?

If not now, then when to outsource?

The biggest challenge that small business owners have is when to take on additional staff and more importantly, how to afford them. A couple of my clients admitted that if they had admin support they could double their revenue. But despite this compelling argument, they were reluctant to take on someone because they were worried about the risk it involved. This is a completely understandable worry.

There’s a great video on LinkedIn by Bob Evans about this dilemma that’s worth a view

But it needn’t be this way. We have options these days. There are loads of excellent virtual assistants (VAs) who can provide administrative support and you only need to buy the number of hours you need rather than having to employ them full time. There are very reasonably priced bookkeepers out there who can do your invoicing and VAT returns for you. Outsourcing is a relatively low-risk cost and low-risk way of testing the waters before you take the big leap of employing people.

The way to look at it is to ask yourself what your hourly rate is. If, for example, you charge your clients £100 an hour and it costs £20-25 an hour to hire a VA, surely it makes much more sense to pay them the money to input your business cards into your CRM system, or post your blogs, or manage your diary? Then you can concentrate on delivering your services to your clients or working on your business development plans – both much better uses of your time. Even if your charge out rate is only £50 an hour, it’s still worth looking at. Or it might simply be that you will have got back an extra four hours a month that you can spend at home, or enjoying a hobby.

What to outsource?

If you’re not sure what you could outsource – here’s a handy checklist you can use.

Or log all your activities for a month and see how much time you are spending on non-income generating activities. A client recently did this and realised with horror that he was spending, on average over 25 hours a week on admin – invoicing, chasing invoices, buying materials, chasing quotes and so on.  As a consequence today we have had a meeting with a part-time bookkeeper and a VA to help him out.

Another client wrote a post-it note every time he did an admin activity and stuck it on his whiteboard. That exercise also showed him, not only what he was doing that could be outsourced, but how much time was spent doing it. He’s just taken on a support person.

In both cases, it’s going to make a huge difference to their business.

So, I would urge you strongly to have a look at what you’re doing and to see what you might be able to outsource. Fortune favours the brave.

 

 

2 Comments
  1. Wise words Karen.

    Our very specialised pension trustee business was designed from day one to outsource stuff that we either (a) were not good at, like IT support, or (b) poor value, like bookkeeping/admin chores. Other stuff like marketing and coaching we buy support because we recognise that we don’t have all the answers.

    All this means that we work longer on our (fee paying) clients and increase the bottom line.

    It’s hard work to find the right business partners but it is time well spent.

    • Thanks for sharing that Michael. It is hard work finding the right business partners – it’s one of the biggest challenges for small businesses who want to grow and it’s always great to hear when businesses, such as yours gets it to work for you.

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About the Author:

About Karen Espley, blogging for The Chameleon GuideKaren Espley of The Chameleon Guide works with ambitious small business owners on her Profit Accelerator Programme. She brings pragmatic and real world advice in a group setting to help her clients make a significant difference to their business through increasing profits and running a highly effective business.

Offering workshops and group profit programmes for companies wanting to reach their full potential.

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