“I can do that myself. I don’t need to hire someone else to do it.”
How often have you heard the above statement? Someone is capable of doing a task themselves, so they don’t want the “unnecessary” expense of hiring someone else to do it for them.
And in some situations, that’s perfectly reasonable. For instance, if you are an employee earning a set wage, reducing expenses is one of the best ways to increase your wealth. You have a finite amount of income coming in, so short of getting a second job, becoming more frugal is the only way to increase your savings. So yeah, mowing your own lawn or painting the bathroom yourself might not be the worst idea.
Applying the same logic to our businesses can be tempting, especially since businesses have so many truly unavoidable expenses. A lot of entrepreneurs reason that if there is anything they can do themselves, they should.
Have you ever heard the old expression “If you want something done right, do it yourself?” No…no…no. Wrong.
The issue is that it ignores one of the most basic tenets of business economics: specialization. Through specialization we gain efficiency, which increases our overall productivity and output.
We don’t build our own houses, grow our own food, or sew our own clothes. We recognize that there are people who can do those things better and faster than we can – because they specialize in them. We hire them, which frees up our time to do something we specialize in, with the overall output being much greater than if we tried to do everything ourselves.
That’s how all societies function. None of us question that.
But somehow, we still have a tendency to ignore that basic truth with our businesses. I can’t count the number of times I’ve had this discussion with clients. And it always has to be stressed that it is not a question of capability. I’m sure you are capable of doing the task. (Or maybe you’re not – a lot of people think that they can handle specialized business functions themselves, when perhaps they really don’t have the expertise to do so. But that’s another discussion for another day.) But even if you are able to do it, can you do it as quickly and as well as someone else? And what else could you be doing with that time?
It’s not (always) a question of can, it’s a question of should.
And if you are spending your time doing anything that you could have outsourced to someone else at a lower effective cost, you are costing yourself money. Don’t get it backwards: you aren’t “saving” anything by trying to do everything yourself.
For every hour that you are spending not working on tasks that only you can accomplish, you’re costing yourself money. This is true of any business, but especially if you are in a profession where you are able to command a premium rate on your time. But despite this, some entrepreneurs who charge hundreds (sometimes thousands) of dollars per hour refuse to let go of jobs they could get someone else to do for $15/hr.
Don’t be shortsighted. Your time is your greatest commodity. And you have a finite amount of it. Make sure you use it wisely.
This is especially true for those of you in the online space. Whether it’s consulting or product sales, your time is worth much more than most. The scalability your business has is something most businesses only dream of. Obviously, it has more difficult challenges, but it has the rewards to match. Don’t waste your time on the mundane. Focus on the most important aspects of your business and find other people to do the rest.
Any accounting, business, or tax advice contained in this communication, including attachments and enclosures, is not intended as a thorough, in-depth analysis of specific issues, nor a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties.