Sage Blog

Welcome to our business blog


Outsourcing for home business owners

Posted in: Controlling costs
1,172 comment

When thinking about controlling costs in your business, paying someone to do some of your work for you might not be the first thing that comes to mind. However often outsourcing can save you time and therefore money, by allowing you to focus on what you do best and love most. Sage Business Expert Debbie O’Connor gives her tips on outsourcing for when running a business from home

When things start to get busy, you will get to a point where you just can’t do it all. Hopefully by that stage you will have a certain amount of money coming into your new business venture and you will be able to afford to pay some other people to help you with things, freeing up some time for yourself.  But how on earth do you choose what to delegate and what to keep for yourself?

When you get to this point in your business then you have hit a limiting factor – and that limiting factor is your time.  So one good way to decide what to delegate is to figure out how much your time is worth, and delegate jobs where you can pay somebody less than your hourly rate.

home workstation

What is your time worth?

If you work providing a service, then deciding your hourly rate is easy – because you probably charge yourself out on an hourly basis. However if you have a craft business, or if you run a distributorship business selling products for others, it can be bit trickier to establish an hourly rate.

Your hourly rate should reflect the profit that you generate during those hours that you are doing the productive end of your business. So for the craft worker – if you can spend an hour making products that you can sell for a profit of £20 (after the cost of the raw materials) then your hourly rate is £20.  For the party plan business – if you have a party or a stall and you can make average sales of £300 in three hours (including travel) and replace the products sold for £150 – then you can make profit of £50/hour in your productive time.

Which jobs should you delegate?

For me there are three answers to this question:

  • Delegate the jobs for which you can pay somebody less than your hourly productive rate
  • Delegate the jobs that you don’t feel qualified to do, or feel that you don’t do well
  • Delegate the jobs that you hate

For me the first thing that I delegated when I started my business was the house cleaning, followed in quick succession by the laundry and the ironing. These are not what you would at first think of as ‘business’ things to delegate – but delegating them certainly enabled me to run my business more efficiently.  While somebody cleans my house I can be sitting at my computer productively, earning more than I am paying them.  Therefore it makes more sense for me to be at my computer for the extra six hours than for me to do the cleaning and the laundry.

In addition to that cleaning fits into the other two categories above for me as well – I don’t do it well and I hate it.  Now my house is cleaner than ever before and all the washing is done on time, folded and delivered to the correct bedroom AND I am earning more money than I was before.

If you are not working from home then maybe you are only looking at ‘business things’ to delegate.  In which case I would look first at the following items, which are easy enough to separate from your main business and delegate to somebody else:

  • Some administrative services – website updates for example
  • Social media marketing
  • Bookkeeping, accounts, payroll and tax
  • Website design and maintenance
  • Design of logos, stationery etc.

I started with hiring a Virtual Assistant.  Their hourly rate sounds quite high but as I keep telling myself – mine is higher.  They load stuff onto the website and also do a fair bit of copywriting for me, which is just not my forte. Things have been a lot better since I got them on board.  My next big step will be to look for a bookkeeper. Although I am a qualified accountant and perfectly able to do my own books, I still find myself constantly procrastinating…

If there’s anything on the above list that answers your three questions – get it outsourced and spend your time on more exciting and more productive stuff!

It’s always hard to take the first steps towards outsourcing.  We always feel that we know best and that somehow we should be able to cope with all aspects of our business.  However you need to take a step back and accept that outsourcing certain jobs to others actually frees you up more time to do the thing in your business that you enjoy most and that actually makes money. That has to be beneficial for everybody.

Debbie O’Connor left her Finance Director position when her daughter was born in 2003. Since that time she has worked from home, starting and running various businesses.  She now runs two websites, Motivating Mum and Mum’s the Boss, which provide support and inspiration for mums running businesses from home. She mentors mums who are either going back to work or starting businesses after a break for children, and also runs networking events and workshops for mums.

Posted in: Controlling costs
1,172 comment

Comments

We may use the information you provide to get in touch with you about your business needs. If you’d like to find out more about how we use your details please visit our privacy policy here.