Two years ago, I was starting a new venture, in the IT sector. Nothing was more exciting. My team and I were developing the first version of our product. And as we were receiving our first orders, everyone was in high spirits.
But quickly, the situation started to deteriorate for an unexpected reason: administrative paperwork! The sheets were suddenly piling up: time sheets, purchase orders, bills and invoices. At some point, I found myself spending a big chunk of my time dealing with those. A couple of months later, as our business picked up steam, past-due invoices started to build up and I had to reconcile bank statements on weekends. The situation had become frustrating! Those tasks were not only tedious, but also non-strategic. I would have rather use this time developing our business, defining strategy, or improving products.
Does that sound familiar?
As most freelance professionals or business owners, you are best placed to know that time is the most precious asset. Optimizing it is a legitimate concern. An independent study conducted by the small & independent business organization NFIB pointed out that administrative tasks and accounting is one of the biggest time-wasters for small business owners. The latter also spend less than 15 hours a week on actual business services.
So, is there an adequate remedy? Of course, but first, let’s try to understand what’s wrong with the way we manage our time.
How to overcome our time allocation biases?
Many entrepreneurs I’ve met over the years tend to avoid outsourcing because of the cost incurred. Hiring external professionals or automated solutions are perceived as a cost center. This cost-based approach often takes a toll on their business’ financial performance. Because too much energy is focused on non-strategic tasks. They overlook the very concept of “cost of opportunity”.
Cost of opportunity means your time is valuable! Let’s assume the post-tax value of one hour of your time is $50 after tax. Then, working 10 hours on a non-core task for $100 makes the value of your time drop by 80%, to $10/hour. Simply put, you may think you’re avoiding costs, but in fact you’re missing an opportunity to earn 5 times as much money.
Also, spending too much time on non-core activities does not help you develop the skills you would rather hone to become a better professional in your field.
So here’s the thing. Cheap and efficient solutions exist and can help you outsource tasks or automate your processes. And most of the time, they outshine us.
What to outsource and how?
1. Automate your tedious and repetitive processes
There is no valid reason to not set a thorough process in your organization. Workflow automation, finance, accounting & payments, HR, customer service, data management: many business process automation (BPA) solutions are out there to help you streamline your activities and save time, money, overheads while giving you peace of mind and greater control over your operations. The main issues they can tackle include:
– endless paperwork
– poor task execution
– employee dissatisfaction
– lower productivity
Here are some examples of areas of focus and players to be considered when you want to streamline your processes:
– Workflow Automation: Trello, Asana, Zoho, Insightly
– Finance, accounting and payments (E-Invoicing, Accounts receivable, Account payable and Procurement, payment gateways, collection)
– HR (Payroll, Timesheets & Attendance tracking, Employee leave requests)
– Customer service (Sale orders, Helpdesk support and Call center processes)
– Data (Data aggregation and migration, backup and restoration)
Most of those automation solutions are offered in a Service as a Software (SaaS) approach.
As for any investment, the expected return on investment (ROI) is your #1 criterion when it comes to hire a service. When you consider all the direct and direct costs that can be cut when some of those SaaS solutions are approved, some solutions literally pay for themselves.
Thanks to the ever-growing number of freelancers and the ever-increasing success of marketplace platforms (such as Fiverr or Elance), you can easily reach out to plenty of skilled and dedicated professionals, specializing in services they provide every day, for a very decent price. Very often, there have strict specifications and the quality of their work is rated by hundreds of clients, so you have a good overview of what you can expect when you hire them.
Designers, artists, marketers, social media experts, web traffic specialists: from college freelancers to experienced experts, many options are available, depending on your requirements.
3. Accountants, lawyers, financial and tax advisors
This one might seem obvious but way too many entrepreneurs are reluctant to consult with their lawyers and advisors, due to the potentially high fees incurred.
We never say it too often: the quality of your interactions with your accountant, lawyer and financial advisor are key. The more you tell them, the more they help you assess your risks and opportunities. Even if you’re a highly trained professional and know a lot about your industry, you don’t want to skimp on business, financial and legal advice, because the environment in those fields is ever-changing. Also, there’s always something you’ll overlook in a contract, a tax filing or any strategic business decision. And ultimately, the consequences are too big, not only for your business but also for yourself.
Then, your advisors should be considered as your best friends. When you share with them the full picture of your activities and five-year plans, they are able to provide you with insights that will spare you a lot of money, time and a lot of trouble down the road.
Word of mouth from trusted (and independent!) sources is still one of the best ways to find an advisor. But some dedicated services may be best suited to help you find the counsel you need such as the Law Society Referral Services.
Happy to cross this one off the list.
In a nutshell, make sure you focus on your area of expertise. This is where you know how make a difference. And although cost optimization is healthy, letting yourself distracted with non-core activities will hold you back, when it comes to become a state-of-the-art professional. Start delegating today!