Time and time again I come across those small businesses who want to do absolutely everything themselves ‘because it is cheaper’. But when does it become un-economic to do something yourself rather than paying a professional?
Most of us undervalue our own time. So many people are under the impression that it costs nothing if you do it yourself! They are wrong. Let’s take a little look shall we?
How much do you earn per hour? Or rather, how much are you worth per hour? Think about this carefully. If you were doing what you do for a job, no admin, no travelling, just your job, how much do you charge? Minimum wage is currently £6.31 for adults (April 2014) so you have to earn at least that much per hour. But more than likely since you chose to work for yourself you are charging more than that – let’s make it easy and say £20 per hour (keep it simple as my maths is poor).
Now you have the value of your time you have to work out how long it would take you to do an admin task – that is any task you need to do to run the business that isn’t revenue earning, like building your own website. So for example if it would take you a whole week to set up your website, based on a short six hour day, you would be losing £600 (30 hours x £20) in revenue. Now does that quote of £350 seems more reasonable?
They way to approach the decision to outsource or not is to look at how much you could earn if you weren’t doing the task against how much it would cost a specialist to do it.
Some things are easier to outsource than others. You should consider what is the most economic option for your business at this point in time. New businesses are often time rich and money poor but that shouldn’t stop you considering outsourcing – successful business people recognise their strengths and outsource their weaknesses. A strong team makes a successful business – even if that team is just two of you with opposing strengths and weaknesses.
Next time we will talk about how everything fits together to make a strong base for your Marketing Plan.