In entrepreneurial, startup and small business circles, there’s often a lot of talk about bootstrapping, doing it yourself and keeping your costs as low as possible.
It’s a no brainer that when you’re not generating a ton of income, you need to keep your running costs and expenses as low as possible.
We’ve shared a lot of resources to help you bootstrap, set up a streamlined, minimal cost business using tools that are – often more than – good enough but there (hopefully) comes a time in your business when it’s time to take the next step up. This next step could mean:
- Outsourcing some of your tasks
- Hiring other people
- Using (and paying for) the best tools for the job
Unfortunately, many businesses are stuck in a pattern of never quite knowing or being able to guarantee their income from one month to the next so it becomes hard to know when exactly is the right time to take that next step up and invest in your growth.
Here are a few pointers to help you decide – gleaned from painful experience and the benefit of hindsight…
When to Outsource
Outsourcing is a good place to start because there are so many affordable, flexible options available these days. Whether you plan to outsource personal or business tasks, there’s bound to be a service available to fit your budget so how do you know when to outsource and what to outsource?
Here is a useful litmus test for any type of situation…Ask yourself:
Is this worth the time it takes me to do it or can I be earning more/doing more/benefitting more from doing something else?
If the answer is “Yes”, outsource it. If the answer is “No”, don’t. If completing a task is going to take more away from you (time, energy, focus, attention) than it will give, pay someone else to do it for you. It’s very simple, don’t think too much about it, just outsource it.
And then use that time to generate twice what it cost you to outsource it. That’s the best way to justify your decision, if ever there was one.
When to Hire
Hiring is obviously a much bigger commitment and it may not be right for you. In the past few years, we’ve hired a number of people in different part time positions across our businesses. At one point, we had 8-10 part-time people on our team.
What this experience revealed to us however, is that we don’t want to run and grow our business in that way – by growing in personnel – we’re happy keeping it in the family and keeping it small; but we do want to grow the revenue, influence and impact.
Understanding this obviously has implications on our strategy and the approach we need to take to achieve our growth plans but at least we now have this clarity. So the first thing to ask yourself is this:
Do you want to become a manager of other people?
It requires a good, honest look at yourself and the answer may surprise you. When you’ve answered that, then try this question next:
Am I in it for the long term?
Hiring people is not a short term strategy; if you want people to invest in you and your business, you’re going to need to invest in them too. This is most definitely a long term approach, not a short term fix to being over-worked and in need of some support.
If the answer to both is affirmative, hiring may well be the right approach for you. It then becomes a question of finances.
If you can’t guarantee being able to pay staff right now, consider drafting up a more flexible work agreement or some sort of performance incentive scheme where salary is tied to income generated or performance delivered.
When to Invest in the Right Tools
You can start your online business for less than $200 or more than $2,000. We have certainly always used the most affordable tools that do the core things we need to do. Part of running a streamlined business means NOT using tools which have extra bells and whistles that you pay for but don’t need and never use.
There comes a point however at which you realise that investing in the right tools not only saves you time and hassle, it makes you more money.
A good example for us recently has been investing in a Vimeo Pro account & a monthly GoToWebinar subscription. Until now, we’ve made do with YouTube, a Vimeo Plus account and a range of other services, cobbled together to provide a video hosting & online webinar/collaboration platform.
For Startup Training School, the video tutorials & webinars are a core offering. Investing in the right tools saves us time, stress and hassle which means we can focus more on marketing and filling the classes and growing the school instead of fighting to make the cheaper tools work for us. It’s a no brainer.
If figuring out how to make the tools work for you takes an inordinate amount of time out of your regular schedule, then that’s a good sign it’s time to upgrade.
The bottom line is that it all comes down to time: What is an hour of your time worth?
Is it really worth saving a $50 per month subscription, when you end up spending 4-5 hours every month fighting with less-than-ideal tools just to make them work? In those 4-5 hours you could make 4-5 times more than the $50 you’d have spent on the subscription.
Could you be spending that time earning the money to pay for the support and more? Could you spend that time with your family? Could you be spend that time on creating something new? Or some time out for yourself?
Are those savings you’re making really savings? Or is it time you and your business took the next step up?
