You know the mantra “A penny saved is a penny earned”? In most cases, that is absolutely true. You don’t have to earn what you don’t spend (or put another way, the more you spend the MORE you have to earn). So the more you trim your monthly business expenses, the less you have to make to stay in the red.
There is, however, one exception to the rule and that exception has to do with your time. We all have the same number of hours available to us. Doing certain tasks yourself to save that penny actually costs you more than you save. It costs you in lost opportunities to maximize your earnings.
For example, if your prospecting and lead generating activities suffer because you are too busy doing administrative tasks, saving money on hiring an assistant is costing you. If you can’t take on additional work or clients because your schedule is overloaded, if you are the reason your company can’t expand to meet additional demand, if new ideas and projects sit on your to-do list and never get done, not hiring an assistant is costing you.
A simple exercise to determine whether or not you should hire additional help in your business is to track your daily activities by task and attach a dollar amount to each category. So, for example, attach what you would have to pay someone to handle administrative tasks, like scheduling social media or organizing your books for the accountant, to the hours you spend doing those tasks yourself.
To calculate your value as the entrepreneur, the fire-maker of the business, track the hours spent generating leads and divide by the revenue derived from those activities. Here too it may make sense to hire a sales rep to do the day-to-day sales tasks and you step in only when required to close. The key is that the numbers will tell you when it makes sense (and cents), but it will also tell you what it costs you if you neglect these tasks for lesser ones.
5 Smart Spends That Increase Your Earning Potential
#1: Outsourcing Administrative Tasks to a Virtual Assistant — Hand those administrative tasks off to someone else to handle for you so you can focus on higher value activities. Common tasks that are outsourced to a VA include managing social media accounts, preparing company newsletters, and scheduling meetings.
#2: Hiring Professional Help When You Lack Knowledge — Seek professional advice and help for tasks that you either can’t do or lack the skill to do efficiently. So, for example, even though you can build your own web site, it may cost you too much in learning time to do it.
#3: Investing an Automated Lead Generation — Build a sales funnel that doesn’t always require you be present to keep it going. So in addition to the networking and sales activities that you participate in, build an online sales funnel, spend on advertising that brings in new business and/or establish strategic partnerships to expand your opportunities.
#4: Expanding Your Capacity to Meet Growing Demand — Start leveraging your time! This one applies more to solopreneurs than small businesses that already have a team. If you are so in demand that you can’t keep up, hire another one of you to handle the simpler tasks and focus on the more complex stuff that really requires your talent.
#5: Purchasing Time-Saving Tools — Seek out tech solutions to streamline systems and processes that are becoming increasingly time intensive. Look for industry-specific software solutions that help you manage the day-to-day work flow, which will become increasingly important as your business grows and you lose the ability to manage everything directly.