What’s your hourly rate?
While this is a question business owners ask contractors or agencies before we engage with them, it’s question you should ask of yourself. As an entrepreneur, you should know exactly what your time is worth.
Bill Gates’ time, Business Insider estimated, is worth $1300 per second! That’s right, it is a waste of Mr. Gates’ time to stoop over and pick up a $100 bill. Reflecting on this helped me put into perspective how I spend my time.
This was a difficult shift for me to make at first. Secure Records Solutions began as a small, scrappy company with a culture of thrift. Every dollar we recognized as revenue had to be carefully watched until it fell to the bottom line. We relied on ourselves to do most things, and often went without in an effort to save. I have done every single job at the company over the past decade, from running the shredder, answering the phones, loading boxes, replacing lightbulbs, and sweeping the floor. Often I held these jobs simultaneously, like the little Dutch boy plugging the dike. I was our chief sales guy, chief marketer, head of operations, and head of HR, just waiting on the next leak to form. As we continued to grow and engage in more complex relationships beyond shredding and storage, the entire team started to feel the friction of our frugality. I was a ‘jack of all trades, master of none,’ and the one to blame for our slowing growth.
Tying up my team, and myself, in work that isn’t central to our purpose as a company was reducing top line growth by more than it saved in reduced expense. It put a ceiling on our revenue per employee key performance indicator.
I cautiously dipped my toe into the water of outsourcing, first with the role that has developed into our Chief of Staff. The responsibilities I handed off to Rainey transformed the way I saw my role, and ultimately my strategy for growing our team, producing a higher quality product and the ability to scale up resources as our strategy evolved. Since shifting to this model, we have developed a strong internal team that relies on outside strategic partners who charge us by the hour for their expertise, creating tremendous workforce leverage.
If you are stuck in a mindset of doing it all but none of it well, here are six tips to get started on the journey of outsourcing.
1. Start with the activity that you least enjoy. As business owners, there are always more things to accomplish in a day than hours to complete them. Identify your least favorite job and hand that off first. Chances are, if you didn’t enjoy it, you weren’t very good at it. There’s no need, for example, for me to muddle my way around Google Adwords trying to figure out a strategy when I can outsource to a professional who lives on the platform every day. In the end, I get a better result with much less frustration and can focus on what I like doing. This reminds me of a favorite quote I first heard from my friend and pastor, Tim Filston: “Allow others to do things they can do better so that you can do what only you can.”
2. Figure out what activities have the lowest return on their investment. As I mentioned above, in the early days, you could find me running the shredder or driving a forklift in the warehouse. And to be clear, I can still do those things and would in a minute, if needed. Being an entrepreneur doesn’t mean I’m above doing anything. But I am responsible for managing our companies’ resources, and if I can close a business deal in the time it would take me to cover someone’s lunch break, then the entire company is counting on me to choose the more valuable task.
3. Outsourcing does not mean handing off. When I talk to other business owners, one hesitancy I hear – and have experienced – is the worry that no one will do it like you do or care as much. After all, it’s not their business, its yours! But outsourcing does not mean disengaging from the process or activity. Even though many of our marketing functions are outsourced, I am still involved in oversight and strategy on a weekly basis. I simply review and offer opinions on different functions rather than carrying the water. It’s a more efficient use of my time and yields a better result.
4. One size doesn’t fit all. A point of contention in handing off duties is the cost of overhead, which is a fair argument. But growing your team doesn’t mean hiring full-time employees. As we scaled our business, we have used a combination of new full-time employees, part-time employees, contract employees, agencies and services. This has allowed us to right size solutions to our changing needs and attract a wide variety of talent. We can hire expertise that we could not afford on a full-time basis. Some contract employees have become full time, growing with the company’s needs. Likewise, when an employee leaves the company, don’t immediately race to backfill his/her responsibilities. Evaluate whether a full-time role is necessary to replace them or ways you can get creative with a contract employee or agency.
5. Work on your business instead of simply in it. Before, I found myself pulled in multiple directions throughout the day – putting out fires and handling employee or client issues as they arose. Instead of being strategic, I was reactive. It wasn’t just a lack of time; it was also a lack of mental space to think broadly and creatively. Now, I have a team in place to handle the day-to-day, so I can focus on solving client problems and develop new paths to growth for our businesses.
6. Apply this principle to your home life. I used to cut my own lawn, until I did the math. When I realized my time behind a lawn mower was worth about $4/hour, I called an expert. Now my wife is much happier with the end result, and I’ve achieved leverage that allows me to spend time with my family. It’s made for better balance, straighter hedges, and a happier family!
Ultimately, time is our scarcest resource, both our own and the teams we manage. That’s never been more important than now, when workforce is the number one issue for every business leader I interact with. While I’m an advocate for limiting investment until an idea is proven, at some point, refusing to outsource will restrict your growth. I know from experience. My perspective has evolved from trying to be as efficient as possible with a small budget to using leverage to scale. The results speak for themselves, and we punch above our weight class because we have a well-rounded team that focuses on the highest and best use of their time.
So, what’s your time worth?