Running and managing a business, not only takes up time but, it also costs money. This is particularly more prevalent in businesses that provide a service. Your time is what brings in the money.
For service and trade-based industries, vital administration usually falls to the wayside. All those little jobs that don’t seem important at the time suddenly becomes a mammoth job at the end of the month. When mammoth jobs appear, we mentally block it off as a daunting task.
Take your business expenses as an example, Hands up and be honest, Who has a bag of receipts from the last month? or a stack of supplier invoices that haven’t been touched for ages? Ask yourself how long this is going to take to sort out. An hour? A day? More?
I am also in a serviced based industry. My product is my time. While I am working on the administration for my clients, I earn money. When I work on my own administration, I don’t earn money.
There are 2 solutions to help sort this out. One is paid (hey! Even I have to make a living) and the other is completely free of charge (I am lying. Nothing is free. It costs Time and Time = Money).
Doing It On Your Own
There is absolutely nothing wrong with wanting to do everything yourself. Often, we can become overwhelmed with trying to fit everything in to make sure our business runs smoothly.
Categorise Your Work
Make a list of everything you personally do for your business. And I mean EVERYTHING. Then break that list down into 2.
- Jobs that bring in the money – e.g. your products/services
- Jobs that manage and run the business
More often than not, the first list is usually the smallest and takes care of itself. These are your billable hours.
The second list can be broken down further into 3 categories based on priority. The most commonly used are Daily, Weekly, Monthly.
|Daily||Email management, Invoicing|
|Weekly||Expenses, Credit control|
|Monthly||Reports, Taxes, Expenses, Credit control|
Work Out How Long Admin Tasks Take To Do
Some of your admin will be on the job, such as taking payments, invoicing customers. However, the bulk of the administration will be bigger and will require dedicated amounts of time to sort. This is everything from sorting your expenses, catching up on emails, customer bookings and queries etc.
Spend a week listing what you are doing and how long it’s taken you to sort. You will soon start seeing a pattern of blocks of repetitive work that can be added to your diary as a non-billable hour.
The processes we follow to carry out administrative tasks have a huge impact on the time spent carrying them out. Nowadays, there are so many different apps to choose from to help most of the administration. For example, accounting software allows you to upload receipts directly to their servers and will pull the vital information off it. All that’s left to do is to click a button to reconcile it. The beauty of systems like this is that it can be done in a few seconds on the go and therefore reduces the amount of time you have to spend uploading and analysing.
2 hours of expense tracking is now a 20-minute job checking the transactions match, which can be done on a weekly basis.
Determine Your Working & Billable Hours
The beauty of working for yourself is that you can work when you want. What we shouldn’t be doing is working all the time without downtime and breaks. Ideally, we should be setting aside time to work for and on the business.
Decide when you want to work and set the working hours. These should be the times where you are at your most productive. It doesn’t have to be 9-5 pm.
In my case, I am productive 9-3 pm while my son is at school, and 8 pm-12 am.
As a single parent, I am limited to 9-3 pm, giving me 6 hours each business day in which to work. If each of those hours is billable at £25 an hour, I would bring £750.00 a week into my business. (Goodbye benefits).
Ask yourself the question: Can my working hours accommodate both billable and non-billable time? If the answer is no, go back and work out where the process can be tweaked, if your pricing strategy can be changed, or if you can extend those working hours.
If then you still can’t fit it all in, it’s probably time to get some outsourced help.
Outsourcing Your Admin
Do any of these sentences sound familiar?
- “How will outsourcing my admin affect my bottom line?”
- “I can’t afford to outsource. They charge too much”
- “I don’t trust someone else to do this properly”
Let’s get the scary part out of the way. The average rate for virtual assistants in the UK is around £25 per hour. The average hourly rate for a plumber in the UK is £50-60 per hour, particularly outside of the home counties and London. So, for this section, we will assume your hourly rate is £65 all in. Currently, your business is covering expenses with the income that comes in. That includes all your administration time, travelling and associated costs such as software, registration, insurance etc. If it wasn’t covering any of that, I will be asking if the business was even viable.
Consider these scenarios for one hour of your time.
- Admin hour – you spend an hour literally doing admin = £0 earned
- Hour of paid work – out on the tools for one hour paid on completion = £65 earned
Your hour of admin helps the business, but you don’t earn anything. You can’t earn anything. It’s covered by your pricing of services, sure, but you cannot potentially earn as it’s not a billable hour.
Your hour of paid work makes you money, but you can’t admin.
Here’s the 3rd scenario.
- You work for an hour, earn £65 and your VA admins for an hour for £25 = £40 earned.
Add that to what you already do to maintain that business, and for that hour, your profit is £40.00. ADDITIONAL MONEY! Who doesn’t want additional money?
An added bonus is that virtual assistants are experts at what they do. In some extreme cases (like me) they really enjoy that busy work. As a result, they are often more productive and take on average 40-50% less time to complete administration tasks.
Putting those numbers into scenario 3, your own additional income is £52.50.
Outsourcing the administration can help increase your profitability. The one most important thing you get back by outsourcing your administration is TIME. That time can be better spent doing what you do to make money.