Should My Small Business Outsource Our Admin Work?
Most business owners have thought about outsourcing and then talked themselves out of it. Usually the hesitation is control. You built this thing, and handing off pieces of it feels like letting go of the wheel and not being sure what the outcome will be.
That's fair - but there's a simple way to know whether a given task is worth keeping, and it comes down to one number.
But it's hard to know if it makes sense for you.
The Boutique COO has a super simple, easy-to-use rule of thumb to use to decide if outsourcing any given service makes sense for your business.
Curious to know what it is? Read on!
The Rule of Thumb: Understanding Your “Time-Value”
Outsourcing isn't a new idea. The only question that matters is whether it pencils out for you specifically, and that's easy to calculate.
All you need to do to know if outsourcing is a good path for you, is to compare the price of your own time to the cost of outsourcing.
The rule of thumb: If you can spend a given hour of your week charging a customer for your time or producing a product that can be sold, instead of doing whatever it is you’re considering outsourcing, you’ll make more money for your business.
Examples of Running This Calculation
Situation 1: Professional Services and Time-Valuation
Say you’re an electrician and can charge $200 per hour for your services. You could spend your Monday morning from 9-10am charging a client $200/ hr for servicing their property, or you could spend that hour answering your emails. Imagine a virtual assistant who can execute these at a $35 hourly rate.
Does it make sense to delegate? Yes, because, for every $200 customer-facing hour you reclaim, you're yielding a net benefit of $165 after outsourcing costs.Situation 2: Strategic Scaling through Task Outsourcing
Or, consider an interior designer considering taking on a project for a client, for a total of $25,000. The problem is that this interior designer doesn’t currently have any more bandwidth to use to put towards this new project. If the interior designer can outsource 10 hrs of work per week for the month, or a total of 40 hrs per month @ $35/ hr, that’s a total of $1,400 paid to the virtual assistant, while making the $25,000 on the project. In other words, the interior designer makes $23,600 that they wouldn’t have made otherwise.
This is exactly the type of work that our admin and office support team takes on: the inbox, the scheduling, the data entry, the follow-up. The tasks that are worth $35 an hour to hand off and far more than that to keep doing yourself.
Does it make sense to delegate? Yes, this strategic manoeuver not only delivers the agreed output but also expands capacity for future projects.Calculating Your “Time Value”
Pricing your own time is a big part of this.
Once you know what an hour of your work is actually worth, the decision really just comes down to math.
If handing off a task frees you to do the work only you can do, and that work is worth more than $35 an hour, you delegate it.
Need help running the calculation? Download our free playbook on auditing your business operations costs here.
Does Admin Outsourcing Make Sense for Your Business?
Run the number on the tasks eating your week.
The ones worth less per hour than your own time are the ones to hand off first.
And remember - think about it as deciding where your hours actually belong, rather than giving up control. And that decision is is the most in-control thing an owner can do.
Need help running this calculation, or ready to hand the admin off? See our admin and office support services, or book a free strategy chat and we'll do the math with you.
