Automate, Delegate or Outsource

In our last blog, we outlined an approach you can take to streamline your business processes, so you can start freeing up your time.

Let’s now imagine that you have managed to streamline some of your processes and cut out some of the things that do not add any value to your customers or your business. You have freed up some of your time and are now working a little smarter and a little less harder.

But one question is still in the back of your mind… How do I free up even more time, so I can start figuring out the best way to grow my business?

Let’s discuss the different options.

 

Automate

To install automatic procedures, as for manufacturing or servicing; follow or utilize the principles of automation – dictionary.com

Automation is heavily reliant on the use of technology and it is the best option. The more you can automate your business the more you can scale whilst minimising the need to hire new staff or outsource your work.

Automation is ideal for back-office processes where heavy judgement is not really required, such as:

  • Sending a text or email to your clients at 8:30am to remind them that they have an appointment with you today
  • Sending an email to your customers as soon as they have signed up to your mailing list to welcome them
  • Sending your customer an invoice via email once the job is logged as complete within your booking system

Some processes will be easy to automate whilst some will be difficult. We highly recommend that you streamline the process before you get started with automation as you don’t want to automate a bad process.

If you decide to go with automation, picking the right apps for your business is going to be important because you will need to make sure they are going to play nicely with your processes.

Once you find the right apps, you will need to set them up and integrate them with your existing apps.

With so many apps out there it can be hard to find the perfect one that suits your needs and budget. Plus the setup process can be quite daunting unless you are tech-savvy. Despite these challenges, the long-term gains from automation are worth it, because it can make your business highly scalable.

 

Delegate

To send or appoint (a person) as deputy or representative – dictionary.com

This is where you delegate your responsibilities to somebody else within your business. It is ideal for processes that cannot be automated because they require human judgement or interaction with customers, such as:

  • Business development (cold calling to find new leads)
  • Inspecting a rental property (if you’re a property management company)
  • Accounts payable / receivable

Delegation involves identifying or hiring a staff member who is capable, training them until they become proficient at the process and letting them “own” it.

Be mindful that it can take time for the person who you delegate your process to, to become as proficient as you. Don’t start thinking that it’s faster for you to just do it yourself, as over time, your time adds up (think weeks, months and years).

Imagine the opportunity cost for your business!

To make it easier to visualise, let’s imagine the following scenario:

  • Your business operates on an 8 hour day, Monday to Friday week
  • Your staff member is paid $25 an hour ($4400 monthly)
  • You pay yourself $100 an hour ($17600 monthly)
  • You’re responsible for the business development (let’s assume it results in a generous 10% revenue growth per month and your pay is tied to this!)
  • You’re not doing any business development at the moment because you don’t have enough time

What does this look like over a 12 month period?

graph

Wouldn’t it be better if you just paid your staff member an extra $5-10 an hour so you could spend more time on business development?

If you’re an owner-operated business and don’t have any staff, delegation is still worth thinking about if you’re planning to hire someone in the future in order to help you cope with the demand.

Before you start delegating, we recommend you streamline the processes and document them so they can be easily picked up. Also, encourage those you delegate the process to, to keep your process document up-to-date.

This future proofs your business, especially if the person you delegated your task to decides, or if you decide to, go with the outsourcing option.

 

Outsource

To contract out (jobs, services, etc.) – dictionary.com

This option is suitable when you require the skills and the expertise your business doesn’t have, and hiring staff with those skills and expertise doesn’t make sense from a financial standpoint.

Examples of processes or tasks that are typically outsourced:

  • Admin/data entry – Virtual assistants
  • Financial and tax reviews – Accountant
  • Reviewing of commercial agreement with your new supplier – Lawyer
  • Implementing and configuring a new system or a website – IT consultants
  • Running of traditional and digital marketing campaigns – Marketing consultants
  • Building your website – Website Designers

The possibilities are endless. However, outsourcing of admin/data entry work is probably the most common, as there are many people willing to work on a casual basis, cheaply and remotely.

Try putting up a Facebook post on one of the community pages, you will likely get multiple responses for work!

virtual-assistant

Courtesy of Virtual Angel

With outsourcing, you can also go offshore, which involves having freelancers or virtual assistants from different countries working remotely around the clock for you, and sometimes at a cheaper cost (depending on the task and the country the person is from). As with anything, there are pro’s and con’s associated with this.

 

Key takeaways

  • Start by streamlining some of your processes, the more streamlined they are the easier to automate, delegate or outsource
  • Automate your processes as much as possible before pursuing the delegation and outsourcing as an option (the more automated your business is the more scalable you become)
  • Document the process you want to delegate or outsource to ensure smooth transition
  • Admin/data entry tasks are ideal for outsourcing, especially if you’re an owner-operated business and hiring doesn’t make financial sense
  • Don’t try and do everything yourself even though it’s quicker to do – think of the opportunity cost!

 

We hope we have given you some valuable insights that enable you to take action. If you know any other business owners who could benefit from this insight then don’t hesitate to share this article.

Stay tuned for our next blog, where will be taking you through the process required to come up with a “lean” strategic plan for growing your business.

Are you a business owner who has managed to apply the above principles and freed up your time as a result? We’re keen to hear about what you have to say about your experience and any of the learnings that could potentially help others.