As a small business owner that just has one employee (me), I often wonder at what point do I start outsourcing some of my work. It’s something that has to be looked at by any solo-preneur. This is not just work in our office but household work. As much as we’d like more hours we only get 24 hours in any given day.
Unfortunately, our bodies require sleep and that typically involves losing 6 to 8 hours that could be spent working. Yes, I know there are those that go with even less sleep. But, we know how unhealthy that is to our bodies in the long term. We can’t outsource anything here.
That now gives us 16 to 18 hours per day. Then we have to take away hours for personal grooming and eating; don’t forget our household responsibilities (kids, pets, yardwork, household chores, etc.). You can easily lop off four hours to take care of your responsibilities.
That could give you 10 to 12 hours to take care of your clients and do your own business responsibilities (marketing, accounting, responding to email, etc.). Yep, just like me, you need another five or more hours per day. Well, that isn’t going to happen anytime soon. Oh what to do!
Let’s take a look at how much your hourly value is and what can we do to free up more time.
First you need to determine how much a year you want to earn. Let’s choose $75,000 per year. The next step is to calculate the number of hours you work in a year. There are 220 days (after subtracting Saturday and Sunday). Multiply that by eight (number of hours in a typical work day) and you get 1760. Divide $75,000 by 1760 and you get an hourly rate of $42.00. Take this number and multiply it by 3 (the number that distinguishes between billable and non-billable hours you spend doing your marketing and accounting…1/3 productive and 2/3 productive other). The final number will be what your time is worth.
Base Earning Target $75,000.00
Divided by (220 days x 8 hours per day = 1760) 1760
work hours in a year = Base hourly number $42.00
Times productivity vs. non–productivity multiplier 3
What your time must be worth per hour $128.00
*The above formula came from the book written by Dan S. Kennedy called No B.S. Time Management for Entreprenuers: The Ultimate No Holds Barred Kick Butt Take No Prisoners ... .
So, it comes down to this. If something costs less than $128 per hour it is time to outsource that work. Do you really need to spend a couple of hours doing yard work? Depending on the size of your lawn (and where you live) you can have your lawn cut for about $30. Need marketing work done for your company you can find a company that offers managed marketing services (like KSJ Marketing Communications) that can do the work for you for about $45 per hour (depending on the number of hours in your retainer agreement and duties to be performed). Same goes for your accounting duties.
Now outsourcing some of your daily tasks can give you more time for what is important: your family. How do you put a dollar amount on the time watching your child’s baseball game or band recital? Just as Harry Chapin’s song says, “when you comin’ home Dad, I don’t know when, but we’ll get together then; You know we’ll have a good time then.”
Give this some thought. Can you afford not to do a little outsourcing for the sake of your business and your family?
Nice breakdown Kym.
Although outsourcing can lessen labor cost, a business owner should be aware of its inefficacies and should be utilized as a business strategy rather than cost-cutting method.
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