As any small-business owner knows, it can be easy to get bogged down by dozens of small tasks that end up consuming an entire day. In fact, a recent survey by The Alternative Board revealed that most entrepreneurs spend nearly 70% of their time on mundane back-office tasks, such as bookkeeping, HR and administrative duties.
Compelled by a “do it all yourself” mentality, small-business owners are often hesitant to delegate tasks and try to maintain control over every aspect of the business – but this rarely, if ever, works out for the best. Not only does it stall a company’s growth over the long run, it also leaves little time to focus their energy and talent on the core job functions that matter most.
“Small-business owners get to a point where they think, ‘Why aren’t we outsourcing more? Why haven’t we been doing this faster and more efficiently?’” explains Brendan Anderson, co-founder and managing partner at Evolution Capital Partners.
Outsourcing tasks can have a powerful impact on the growth, productivity and bottom line of a business by allowing entrepreneurs to focus less on busy work and more on the big picture.
“By engaging outsourced services, small-business owners gain back their two most valuable resources – time and money,” says Anderson.
Although many entrepreneurs worry about the cost, outsourcing tasks actually ends up being far less expensive than hiring a full-time employee or trying to tackle it all as a one-man shop. It also eliminates the need for more office space or resources to support a growing in-house team.
But before handing over the reins, small-business owners should first take a look at the purpose and core competencies of their company. Which tasks are central to the business? In what areas does the business struggle most? This will help pinpoint tasks that are best to outsource.
In addition, they will also need to vet the service providers and establish an internal point of contact that can help oversee and manage those outsourced services on a day-to-day basis.
No matter the industry or profession, there are five key tasks that small-business owners can easily outsource to help drive the growth, revenue and value of their business:
It goes without saying that accurate, up-to-date financial records play a critical role in the success of a company. However, it can be difficult for small-business owners to effectively juggle and maintain the mountain of daily financial tasks, which often end up falling to the bottom of their lengthy to-do list and becoming a burden.
And, sometimes, it is even never addressed. In fact, 40% of business owners admit to either having an ineffective operating budget, or no budget in place at all.
Using a financial consultant or team, such as Crabtree, Rowe & Berger, entrepreneurs can easily outsource nearly every aspect of the accounting process, from bookkeeping and managing accounts payable/receivable, to budgeting and financial planning.
A huge benefit of this is getting the expertise of a skilled financial team at a low cost, which allows an entrepreneur to instead focus on the overall financial plan. It also relieves the burden of having to navigate the long list of tax laws and reporting requirements associated with managing the finances of a company – ultimately avoiding costly mistakes.
As a business grows, the management of HR becomes increasingly complex. No two businesses face the exact same challenges, which can make it difficult to stay on top of the latest changes in laws, regulations and trends.
Outsourcing this area allows small-business owners to streamline and more easily manage HR administrative functions. With the help of dedicated HR experts, a plan can be customized to meet the specific needs of a growing company.
Payroll, in particular, can be a huge undertaking for a small business. It goes well beyond simply calculating hours and salary payouts for employees. Some of the more involved tasks include having to adjust payroll taxes at the correct rates, cut and distribute checks, file tax returns on time, and keep up with changing wage and hour laws. And a single mistake can trigger a tax audit and cost a company thousands of dollars!
“Given the complexity of HR, it’s best to outsource this function to companies, like Zuman, whose job it is to stay up to date on, navigate and comply with laws and regulations at the local, state and federal levels,” says Anderson.
It also allows small-business owners to streamline the hiring and onboarding process, more easily track employee time and attendance, and better manage their group health insurance, retirement plan and other employee benefits.
In today’s ever-evolving marketing landscape, more demand is being placed on companies than ever before. However, most small businesses lack the capital and resources for a marketing team to handle all of the moving parts of a solid marketing strategy – from branding and a website, to content and social media.
Not surprisingly, this often falls on the plate of a small-business owner, who just simply doesn’t have the time it takes to consistently and effectively produce valuable content that will resonate with their target audience and generate leads.
By outsourcing marketing and PR to an outside agency or freelance writer, small-business owners can remain competitive in their industry by leaving those tasks to experts whose job it is to stay informed on the latest marketing trends and tactics that will grow their business.
Ultimately, this helps entrepreneurs save money, free up their time for larger projects and build better relationships with customers – resulting in more success over the long run.
Although there are many proven processes for how to effectively operate a small business, most entrepreneurs still try to do it intuitively, which can be very inefficient and add significant amounts of time to their plate – particularly as the business grows.
“Most entrepreneurs are flying by the seat of their pants, and over time it becomes increasingly difficult to keep everyone aligned and on the same page with how to run the business and what goals they’re working to achieve,” says Anderson. “The fact of the matter is, there are very inexpensive processes that can be used for a smooth business operation.”
There are several options to choose from, so small-business owners will need to take the time to identify which operating process best fits the needs of their growing business.
One example is the Entrepreneurial Operating System® (EOS), which integrates a holistic business model aimed to align and synchronize all the moving parts of a business to produce desired results. It helps to guide small-business owners on how to effectively make decisions, grow and ultimately transform their business using tangible data instead of a “gut” feeling.
An important element of Evolution’s guiding principles The 5 Pillars of Business Freedom, the EOS model outlines six key components that a small-business owner must manage and enhance to build a successful business: vision, data, process, traction, issues and people. A major aspect of this process is making sure the right people are in the right seats.
Ultimately, having a defined process in place for how to operate a small business will help flush out any inefficiencies and provide a jump start on growing its team, revenue and profit.
Although it plays an important role in generating revenue for a growing business, managing the sales pipeline is not intuitive to most entrepreneurs.
“A small-business owner or employee might be great at bringing in large contracts, but not very good at managing the salesforce, generating leads, keeping track of where all of the sales prospects are in the purchasing process and then closing the deal,” explains Anderson.
Managing this sales process can easily end up consuming a large part of an entrepreneur’s time and energy, without many real results to show for it. Instead, small-business owners can easily outsource this task to an automation technology service or agency who can set up a CRM system, manage the sales pipeline, optimize conversions and run sales projections.
In fact, companies using automation technology generate 2x as many leads. Further, 67% of marketers saw at least a 10% increase in sales opportunities through lead nurturing, while 15% had opportunities increase by 30% or more.
Depending on the business model and margins, even a small increase in the conversion rate can add thousands of dollars to a company’s revenue – making it well worth the investment.
Ultimately, the benefits of outsourcing far exceed any challenges when it comes to operating and growing a small business. By freeing up valuable time, outsourcing back-office tasks allows small-business owners to focus their time, energy and resources on what really matters – cultivating their true unique, developing a solid strategy and taking the business to the next level of its growth stage.
Contact Evolution Capital Partners at (216) 593-0402 or use our online contact form.
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