Hands up if you sat back and reflected that business was so much easier when you were much smaller! How many times have you seen your friends and colleagues run a profitable solopreneur business only to find their profits dropped when they grow their business? And when your own business grew, you found yourself working crazy hours just to pay for all those back-office costs – the receptionist, bookkeeper, filing clerk, etc. You want to grow your business not your back-office!

In my previous article on How To Grow Your Business, I said that you had to get your strategies right in 4 key areas of business – sales and marketing, operations, administration and leadership. Herein lies the problem. Administration is something that MUST be done. Yet it is often done poorly or not at all. Administration is an area that can just take over your business if you’re not careful. We’ve all seen the well-oiled public service office where administration is everything and very little else seems to get done. You do not want to go there for your business. You want to grow your business, not your back-office!

As you go through the Struggle Zone, you come to this realisation that there’s A LOT of work that has to be done if you want to grow your business.grow your business not your back-office

As a business owner, you KNOW

  • You have to have a social media presence. You know you’re supposed to post interesting content and connect with your audience on your FB page. You know you have to get online.
  • You have to keep proper records
  • You have to look after your customers
  • You have to put in place a referral system or you will end up with the dreaded feast and famine cycle that so many entrepreneurs suffer from.

Basically, just where do you think you will find the time to do all this ON TOP of doing the productive work and managing your team (if you have one). You know you can’t do it all by yourself. You also know you want to grow your business not your back-office. You will have to invest in your back-office before burnout happens.

THE TIME TAKERS

Most businesses view administration as an “overhead” they do not want to pay for. Yet, do it badly, and you will suffer the consequences. However, it doesn’t have to be that way. You can grow your business without growing your back-office. None of the administration tasks are difficult. It just takes an inordinate amount of time and seem to yield little fruit.  There is an answer to this.

The answer is to implement systems by:

  • Using online tools where possible
  • Outsourcing the work that can be outsourced

Implemented correctly, these two alone will help your grow your business, not your back-office!

1. Online Tools

You’ll be surprised how much of the mundane back-office work today can be automated by making use of online tools. Today, automation takes care of most of my back office. What used to require a person to sit in front of a computer can now be done automatically with software – with a lot less mistakes! Even referral systems can be automated with templated letters sent out on your behalf without much need for your intervention and your valuable time. Do it once and forget about it.  You can grow your business, not your back-office.outsourcing bookkeeping

I am a great believer that everyone should use the free tools we can get on the internet. However, it is not always going to be possible to get everything free. Many products do not give you access to all their features in the free version and you have to pay to access the “extras”. If paying the extra $10 or $20 saves me an hour of my day every day, then in my books, it’s worth the investment.  Most people would not have the time to waste to browse on the internet and test all the products available to see if it is suitable for them to use.

If you have to pay for a product or service, you want to make sure that you invest wisely. There are many products for sale – many promises their product will be THE solution you’ve been looking for. Many that are new to the online business world get sucked into paying for products which often do not even get unpacked or used after they have downloaded it. I should know – because I’ve bought enough of them in my early days.  Usually, those products would only have cost me $27 or maybe, just $7 (although as the industry matures, $10,000 for a program is no longer unusual). But as we all know, if we pay for enough of those “cheap” software, we could be out of pocket by several thousand dollars after a while.

I had so many clients ask me about what I use that I ended up writing a book on it. You can grab your FREE COPY (of course, it’s in exchange for your email address.)

I have been very selective in the products that I actually recommend in the guide BUT I have included some products that I have not personally tested – only because I have no need for such a product. However, they would appear to be very useful to some businesses and have been included in other entrepreneurs’ “I can’t survive without this app” list. I call these the Raving Fan Club products. These should, therefore, be investigated if you operate in an industry that can be served by using those particular products.

For me to include it in my guide to online business tools, I decided that if I was going to put my name to it, it had to meet the following criteria:

  • VFM (Value for Money) or FREE.  VFM is good but FREE is better – provided of course, the benefits are not compromised. You will, therefore, find that I do recommend some products be upgraded to the paid version even though you can get a free version.
  • My clients, my close business colleagues and I are using or have used it – unless it falls into the Raving Fan Club in category 4 below.
  • I am happy with the service or support provided by the provider.  Having great software or program isn’t worth much if you can’t get hold of the provider or developer when you’re stuck. Having said that, I do sometimes use a product that does not have the best support simply because the product is one that I felt I should use even though their support is not great.
  • If I have never used the product myself, they have to have a Raving Fan Club

My guide to online business tools does not include the “common” apps that most people already use e.g. Facetime, Whatsapp, Google Docs, iMessage, etc. Nor have I included the well-known Social Media apps such as Facebook, Instagram, Linkedin, YouTube, etc.

Bear in mind, the guide to online business tools will not teach you HOW to use the various tools but rather to tell you which ones have proven useful to us in running our own businesses. The HOW-TO is better done by the vendor themselves. In this business guide, I have simply provided you with a brief description of the tool, what it can do for you and provide you with the relevant links. I have avoided putting prices in this business guide as I would never be able to keep abreast of every price change.

The nature of the content is such that the tools referred to in business guides will keep changing. What worked yesterday will often be superseded by a newer cheaper better tool within a short period. I will therefore only publish this guide in soft copy format to make it easier to keep it updated.

calculating machineThe bottom line is, as an entrepreneur, learn to use whatever tools you have available to you. I never had the advantage of these online business tools when I first started a business in 1978 – the internet didn’t exist then. Everything had to be done the “slow” way with those clunky add-listing machines and incredible secretaries typing reports in triplicate using carbon paper. In fact, Excel didn’t even exist until 1985, with Word appearing just 2 years before in 1983. (Yes, I grew up in the age of the dinosaurs!) Today, we take Word and Excel for granted.

The same will hold true for these online business tools. What is “difficult to use” will be taken for granted by the next generation. It has taken me many hours of research and browsing to find these tools that are now used by the Equipped 4 Success team.  Unless you are a technology fan like me and you enjoy doing the browsing and research, save yourself the time and don’t try to reinvent the wheel.  I will update this business guide at regular intervals as new tools come on the market. New updated versions are announced in our Public Facebook Group so do please join the group if you would like to be kept informed of any updates.

2. Work That Can Be Outsourced

If you want to grow your business, not your back-office you MUST look at outsourcing. The two biggest time “wasters” that MUST be done for your business are digital marketing and bookkeeping.

Digital Marketing

Anybody can get online and do some posting on their Facebook or Linkedin or Instagram. Anybody can set up a website. But not everybody will get it right. When I first started on this, I got it totally wrong. Nothing I did got me any traction. Sure, you might say, what would a 65-year-old Chinese lady know about the internet. I have, on and off, been followed online marketing since 2006. In internet terms, I’m probably an ANTIQUE 🙂!

When online marketing started years ago, people were just randomly creating posts on their websites with certain keywords to get a top rank in Google. Marketing gurus were offering to teach you how to get to the top of Google within 24 hours. Techies were coming out with software that would spam for backlinks. Online marketing was easy and didn’t need much effort on your part. However, the industry has now matured. Google and Facebook came out with new algorithms that punished those who used bots to do their work. They want to see “real” people online. That means they want you to do the work, not bots.

Today, content is king and it takes time to create content. The fact is content has always been king. It’s just that Google is now a lot fussier about what constitutes good content. SEO is still important, but it is no longer done the way it was done in 2006. Today, the WAY it should be done matters. The old “get to the top of Google in 24 hours” just doesn’t really work anymore. It’s not just about putting up some random posts. Online marketing now needs your time.online tools

Bookkeeping

A good bookkeeper is not cheap. Cheap bookkeepers fall into the penny wise, pound foolish category. There is almost always an inverse relationship between the rate you pay for your bookkeeper and your end of year accounting fee.

I once had a client once who absolutely refused to pay for experienced bookkeeper – so he didn’t. All his bookkeepers were Uni students who didn’t really know bookkeeping. He paid dearly for this – there was one year when we found an $80,000 cash shortfall that he didn’t even know about. The bookkeeper was not trained to recognise such problems and by the time we got to his books, it was a whole year later. He couldn’t understand why he was really busy and yet he was always short of cash! The stupid thing was that he ended up paying us nearly $15,000 to find that error (We obviously charged qualified professional qualified accountants’ rates, not bookkeeper rates). So, the question is whether he saved any money by having cheap bookkeepers. I think you would have to agree with me – the answer is NO.

What are your options for bookkeeping?

  1. You can do it yourself

Is that what you want to do? Many new business owners feel that they do not have a choice. They feel that it would be wasteful to spend money paying someone else to do what they can do themselves especially with the choice of accounting software which makes this really easy. My question to you is how much can you earn an hour doing what you love? How much would you have to pay a bookkeeper to do it for you? If you can earn more, then I would suggest that you pay someone else to do it ESPECIALLY if you dislike bookkeeping! I can do bookkeeping in my sleep and I outsource mine! I want to grow my business, not the back office!

  1. You can have your spouse or partner do it for you

Of course, if your spouse or partner loves bookkeeping, then there’s no need for further consideration on this. However, if your spouse or partner already have their own business to run AND already have 101 things on his or her plate, then the same rational above applies. You don’t want to ruin a good relationship by forcing bookkeeping on them!

  1. You can hire your tax accountants to do it for you

Many accounting firms now offer bookkeeping services to their clients. It makes sense to do so. Your records will be up to date and you would expect that an in-house bookkeeper that works closely with the partner handling your tax work will understand exactly what is required. It should mean that the records are right at all times and the end of year tax year is then greatly reduced. It means that your tax accountants have access to your up-to-date financials when they are asked to provide business advice to you.

However, many have found that to not be the case. The end of year tax work may be just as expensive. The bookkeeping work may even not be as accurate as you would expect given that it’s being done “in-house” by professional accountants. There are reasons why that happens. It’s likely that the bookkeeping work has been pushed down the line to the newest recruit straight out of University. The big disadvantage to using the accountant’s in-house bookkeepers is the cost. They are generally more expensive than what you would expect to pay a local freelancer.

  1. You can hire a bookkeeping service agency

Unless these bookkeeping agencies are very reasonably priced (compared to your accountants), it would appear that this is not really a great option. By the time you’re paying an agency, you may as well pay your accountants. The advantages you get from having it done “in-house” with your accountants will not exist.

  1. You can hire a freelancer locally and pay direct

Freelancers working on their own (from home) can be extremely cost effective. By and large, these freelancers (depending on how experienced they are) charge anything from $45 to $70 an hour. They can be brilliant or they can be pretty average. If you have a brilliant one that doesn’t charge you an arm and a leg, you may want to hang on to them. They are worth their weight in gold.

  1. You can hire a freelancer overseas

This is where you start to see some real savings. Overseas rates are a fraction of the cost you would pay in developed countries. However, there are many reasons why business owners do not outsource overseas even though they can save money.

How can you tell if the bookkeeper is any good? Quite simple. Just ask your tax accountants. If they are having to charge you an arm and a leg to fix the bookkeeping mistakes, then its time you terminate the bookkeeper’s services. Hiring the cheapest bookkeeper is a false economy. You end up paying in the end … to your tax accountant!

Reasons Why Many Will Not Outsource

Those who stand to lose your work or lose their job will sow F.U.D. (Fear Uncertainty and Doubt). They will give you the 101 reasons why you should not outsource your work overseas. However, Covid-19 has just proven that not everything needs a face-to-face meeting. stress overwork

If you get down to basics, it comes down to just 4 reasons:

  1. You fear the loss of control.
  2. You can’t trust your records to someone you have never met
  3. You believe it’s too hard to do this
  4. You want to support the local economy

The first 3 are just F.U.Ds. So, let me address those three.

1. Loss of Control

Let’s face it – you never really had “control” even with your local bookkeeper or digital marketer that you meet up with. You hand over your work and they return it to you. Did you stand over them and watch them do it? I would be surprised if you did.

Think about this. You “hand over our books” to the accountant each year. Unless you also have a relationship with the bookkeeper or the junior staff, you don’t really know who then works on your records. Having operated an accounting practice, I can tell you that bookkeeping work is passed down the line to either the bookkeeping division (if there is one) or the most junior accountant. That is sensible. You do not want to be paying for bookkeeping to be done by a Senior Accountant or the Partner. You can’t afford that – not at the $250 – $450 an hour charged for their time.

Do you know that many accounting firms now outsource their bookkeeping work to India and the Philippines? In some firms, the cost saving they make are not passed back to you and the extra profit goes straight to the practice bottom line. Other firms do and you would have noticed a drop in their charge out rates for bookkeeping work. In today’s global economy, the progressive firms are outsourcing more and more of their work. There are whole industries in India and the Philippines set up to handle only outsourced work by accounting firms. It makes sense to do so.

Control is a key reason for some especially those who are control freaks. In fact, control freaks need to learn to let go. It is very difficult to grow your business, not your back office when you have to micro manage everything.

2. Lack of Trust

Trust is a big issue. We have all heard stories of businesses being ripped off by overseas contractors. They charge for work they do not do. They may fabricate how much time they take to do the work. That will not be the first time it happens. And it won’t be the last. Therefore, many of the outsourcing companies use desktop monitoring software (yes, you can buy the software) to spy on their contractors.

Competency is a big question mark. Many consider that their country’s situation is unique and therefore only a local can do the work. However, as someone who has worked in England, Australia and Asia, AND I’ve worked on USA financials, I can assure you that is not the case. A butcher is a butcher. They all have income. They all have expenses. They may or may not pay sales tax or GST. The principles remain the same.

Security and privacy are perceived to be problematic. Business owners worry about documents being sent over the internet. However, your data is already “out there” because your accountants use cloud-based software too. Most cloud-based software such as Dropbox are encrypted. And the fact is that it doesn’t have to be sent overseas or “into the cloud” for a security breach to occur (Remember the newspaper report about confidential Government documents on the rubbish tip?)

3. It’s Too Hard

Covid-19 has proven that business can be done online with people working from home. Interviews can be done online. Linkedin and Facebook Groups are great places to go to for referrals – my last few referred contractors all came from Linkedin.

I always introduce my own bookkeepers to my clients. They are overseas freelancers – all highly recommended by my overseas colleagues. Why wouldn’t I? At $25 an hour, it lowers the cost for my clients. (Just think about how much you would save!)  All parties are happy – my clients have their books done at a much cheaper rate by better-qualified bookkeepers. The overseas freelancer is happy because he or she is paid more than they would get if they worked for a local business where they live. The tax agent is happy because they no longer have to suffer complaining clients which result from extra work being done because the books are not up to scratch (although he would be happier if you paid his bookkeepers, not a overseas freelancer!)

It never ceases to amaze me how some business consultants can review a business without even asking to see the books. Yes, I can ask questions. The answers I receive should then be backed up financials. Figures don’t lie – unless, of course, you have not deliberately falsified your records (which my clients never do!) Connect with me if you would like more information on this. I’m happy to do the introduction. How much longer do you want to keep running around like a headless chook. Grow your business, don’t grow your back office!

How To Find Your Outsource Contractor

The beauty with outsourcing is that you do not have to stick to just bookkeeping. You can outsource virtually any task. Covid-19 has proven that to be true.

The best part is outsourcing is that many contractors will work on a needs basis – you don’t have to have a full-time one. Trusting someone whom you’ve never physically met is the hardest to overcome but not impossible to do. Like everything, it takes time to build up trust. The key is to start small. This will allow you to grow your business, not your back-office.

You have 2 choices on how you do this:

  • Get a referral from a trusted colleague

When I needed an English-speaking Japanese accountant based in Japan for an American client (and it doesn’t get much harder than this), I reached out to my Linkedin community who introduced me to a African-born UK qualified English-speaking accountant who is a Japanese business process specialist!

Referrals are great!

  • Independent search on Linkedin

If you start your search in Linkedin, narrowed down your possibilities through the same process that you would go through for any recruitment i.e. you ask for their resume.  You interview them, get a reference and you make your assessment from there. At Equipped 4 Success, we also have them do a DISC psychometric profile assessment, we ask for a sample of their work and we set them a small test to complete. This can be something like getting them to produce a marketing strategy report for a product. You make sure you have a probation period and you monitor all their work. One of the biggest mistakes people make when appointing a VA is that they don’t go through this “recruitment” process.

You’ve heard the saying, owning your own business means you get to CHOOSE WHICH 60 hours a week you work. With outsourcing, you can CHOOSE to work fewer hours and use the time you have to focus on your own productivity and grow your business not your back-office!

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Patsy Lim FCAAbout the Author:

Patsy Lim’s business and financial background (having qualified as a Chartered Accountant in 1980), together with her entrepreneurial spirit enables her to apply a potent blend of strong financial and accounting expertise, deep practical business experience, and entrepreneurial flair and creativity to complex business problems. As an entrepreneur, she understands the issues that an entrepreneur faces. So, unlike some accountants who only know the theory of business, Patsy has had hands-on experience of what it means to be IN business, to start a business, to grow a business, and most of all, to manage a business when times inevitably get tough!

Follow Patsy, Business Mentor & Coach:  LinkedIn  |  Twitter  |  Facebook  |  Instagram
Website: www.PatsyLim.com

 

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