Outsource non-core activities

So you've just started you business and things are going great. A lot of customer-to-customer referrals (the best kind of advertising), and customer numbers are growing at a steady rate. But then your work PC crashes, the receipt shoe-box overflows and you realise that your 3-line ad in the local paper hasn't delivered any new customers. You could spend the next week rebuilding your PC, cataloging the shoe-box and reading a few marketing books... but I suggest that this would be a complete waste of your time. Your core business is what you should devote 100% of your time on.

Although it may appear 'economical' to spend time sorting out these problems yourself (I know, I've said to myself "I'll just do it after hours, and it's free!"), the reality is that unless your core business is PC repair, book-keeping or marketing, you're going to spend a lot more time (= more money) than a professional would to resolve the issues.

Any time you have decided to allocate to your business should be spent on the core products and services of your business. You don't need the distractions (or frustration) of non-core aspects of your business that aren't an area of specialisation for you. Remember, the whole reason why you're in business is to do something you're good at (eg. efficient, effective, economical, etc.) for someone else who is either not skilled in this area, or would simply want it done more quickly or economical than doing it themselves. So you are basically asking your potential customers to outsource something to you. It therefore makes sense that you extend this logic and become a customer yourself by outsourcing whenever it is appropriate.

I'm not saying outsource strategic planning and quarterly financial reviews, and I'm definitely not saying that you should outsource customer feedback activities (see Actively seek customer feedback). I'm suggesting that someone whose bread-and-butter is solving a particular problem for other businesses, is probably going to be good at it, efficient and economical (as your customers expect of you). My current rule of thumb is, if it isn't my core business and I don't think I can do/solve it in less 4 hours (10% of a normal [hah!] work week), I'm going to spend 15 minutes in my contacts/suppliers list, the local paper or yellow pages and find a supplier who can do it for me. Chances are you will have a similar problem again, so you can also evaluate them for future use (or avoidance).

My 'top 3' picks for things all SMEs should outsource immediately are as follows:

1. Website development
Ok I'll admit it, I know little to nothing about marketing. I looked at getting someone to build a website for my company, but the costs were crazy. $2,000 for a single page(!), $10,000 for a complete site with several products/services pages, a forum, feedback area and blog. Are these people crazy? I'll do it myself I said. The end-result of perhaps 100 hours of my time looking at other sites, reading up on HTML, reading small business marketing books and publishing 5 pages of content was a set of totally ugly, boring and static web pages. If you're in a professional services business (as I am), and are charging say $100/hr (conservatively) to your customers, that equates to a minimum $10,000(!) spent developing a crap website. Perhaps you don't have $10,000 for the complete package, but I strongly suggest you save up the $2,000 and get a professional to create your initial 'web presence' for you. They will probably offer add-ons at a reasonable rate so you can extend your web-site as money becomes available (and as the return-on-investment of the site increases). A lot of the larger web-hosting firms also offer monthly payments that include the hosting charges and the site development costs as a package. Fantastic for us SMEs!

2. PC support
I love PC problems. especially when I'm procrastinating; avoiding working on an assignment or finishing off a painful project. It can literally take days to solve a problem. Great! If you have a few PCs, you can get really carried away with installing updates and new software, upgrading the hardware, configuring printers... the list goes on. No, I'm not qualified or have any professional experience/skills, I just enjoy it. I once looked into getting someone to come in and do this work for me, but the costs were a little scary ie. $50-75/hour and I wasn't sure if they'd take me for a ride. However, my logic was wrong. I'm actually losing money here. I should be focusing on billable hours. If it takes me 2 hours to find a problem and fix it, that's potentially $200 lost income and only $50 saved (logically assuming the outsourced provider can solve the problem in a lot less time). Ok, you may not have any billable work, but you definitely have more important things to do. So outsource your PC support. If you've grown to a size that justifies a server and a collaboration tool, you'll definitely need someone to help set it up and maintain it.

3. Book-Keeping
Back to the 'shoe-box'. Another thing I just don't get is accounting (I know, the list is building!). I can understand our Profit-and-Loss statement and acknowledge the importance of positive cash-flow, but ask me to record our invoices and purchase receipts in a debit or credit column and I'm stumped. If it wasn't for my wife, I'm sure I would have been audited by the Tax Office and closed down long ago! Book-keeping is big business (there are thousands of book-keepers out there and quite a few franchises), but it's also good business sense. You can literally hand them your shoe-box and bank account on a monthly/quarterly basis and they'll make sense of it all, balance your bank account and get it all ready for your Accountant to process or even prepare your Tax Office submissions for you. You could always use your Accountant as a book-keeper, but the costs would be quite high - unless they offer a specific book-keeping service. As you grow, they can suggest an accounting software package, can set it up for you, enter all your data and give you training in how to do simple data entry and reporting. Fantastic service and, with the large number of providers, quite economical ($40-75/hour - 1/3 to 1/2 the cost of an Accountant).

Related posts:

• 2009-04-12 - Just found this complimentary blog post on SME outsourcing of IT: http://www.evolveit.com.au/blogs/claytonm/2009/02/give-time-back-to-your-it-guy.html
• 2009-04-22 - Another complimentary blog post on Virtual Assistants: http://www.sme-blog.com/small-business/virtual-assistants/outsourcing-options-for-small-business
• 2015-04-16 - Another interesting article on the possible demise of book-keepers and accountants: http://www.smartcompany.com.au/technology/46462-are-the-days-of-bookkeepers-and-accountants-numbered.html