It is occasionally necessary to work a twelve-hour day and very rarely a sixty-hour week, but if these hours are necessary to sustain your business, then you have easily reached the point when you should consider paying for extra manpower. Not only will this free up time for you to increase profits by working on the business, but your quality of life will also vastly improve as a consequence.
Delegating administrative tasks is an important component of working smarter not harder, consequently you should outsource all tasks that are not core to the business that can be bought in for less than the hourly rate at which you value your time, this is especially important when the hours you spend on your business regularly amount to forty or more hours each week. Typical of the tasks that should be outsourced are bookkeeping, cleaning and database maintenance. There are many small companies that will be local to you that can undertake these tasks more efficiently than you at very affordable rates. Use them, they are a bargain, and you will get the job done and have more time to spend on the essentials of your business. Doing your VAT return should never be an excuse for not spending time with your customers or developing your services or products!
Employing staff, as an alternative to outsourcing, should be considered when you are outsourcing 20 hours or more per week as it may be more cost effective. However don’t forget to allow for taxes, pensions, holidays and the administration overhead when calculating their costs and also bear in mind that staff need supervision, become sick and there are volumes of legislation concerning their employment.
Before you employ staff think carefully about the tasks you need them to fulfil and then rate these tasks according to skill level.
If you employ a person to fulfil all the required tasks their rate of pay will reflect the highest skill level they need. There are two ways of delegating work, either by task or by project.
Delegating by task (e.g. cleaning, opening post)enables you to delegate the lowest skill and cost levels of work. Delegating by project (i.e. processing certain categories of customer, services or products) require paying for the highest skill level needed. However as projects are dealt with as a whole process there may be savings time savings as the project progresses from one skill level to another.
Please contact me if you are at the stage of thinking about employing or outsourcing and would like some help in understanding all the issues involved.