I usually quote fixed fees, so I don’t get this question often. However, in this post I turn the question around to illustrate an important point.
Many business owners that I’ve talked to think they need to personally do every task in their business, or do a task themselves to save some money, but that’s actually a waste of time and money.
I’ll use an electrician as an example.
The last time I needed an electrician, it was a simple 15 minute job, so they only charged $50. Add in some extra time for travel and we’ll say it took 30 minutes. This results in a potential hourly rate of $100 for the electrician.
I don’t have the tools, expertise, time or desire to do the work, so I paid happily.
On average, the electrician spends 5 hours per week doing their own bookkeeping and dealing with all the other things that the government makes businesses do.
The electrician hates every minute of it.
In those five hours, every week, the electrician could have earned $500 doing client work. Or more, for complicated jobs. And every happy customer is a potential source of referrals, until he has so many leads that he can grow his team and/or raise his rates. Or he could spend the time doing a Quick Profit Hunt and potentially ‘earn’ thousands for less than an hour’s work.
Here’s the important bit: a good bookkeeper is much faster and will charge much less than $500 per week to do the bookkeeping work.
The electrician would be happier and wealthier focusing on their customers while someone else takes care of the bookkeeping.
This principle works for the other ‘administrative’ hats that a business owner initially wears, for example payroll, tax and IT.
As you may have guessed, it also works for household tasks, such as a bookkeeper’s electrical work!
I recommend spending some time at least once every month thinking about the low-level tasks you’re doing, and how you could earn more money by outsourcing them.
