The Essentials: What You Need To Know About Outsourcing To Scale Your Business
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Managing a growing business is a total whirlwind… To say the least! As a six or seven-figure business owner, we know you’ve been in and out of this whirlwind navigating the crazy ups and downs that come with scaling your business over and over again. Between balancing the books, handling contracts, maintaining clients, and staying compliant it can all get a bit… Overwhelming, yeah? Especially when your business transitions from a lifestyle venture to a mission-driven powerhouse, but this is a key turning point along the journey.
In this week's blog, we cover:
Being a lifestyle vs. mission-driven business
Taking business advice
Why hiring a bookkeeper is essential
The importance and impact of outsourcing
The Evolution From A Lifestyle to Mission-Driven Business
Starting a business often begins with the dream of freedom—whether that's financial independence, the ability to travel, or simply paying the bills without stress. Your version of freedom is unique to you, but it’s likely a big part of what drove you to take the entrepreneurial route. Initially, it's all about survival and making enough money to support your lifestyle. When you are at this stage, this is what I like to call a lifestyle-driven business. But as your business grows, you evolve as a person, you hit your stride, and a shift occurs.
Suddenly, your business isn't just about you and your life anymore. It transforms into a mission-driven entity, supporting not just your lifestyle but also a team and a broader mission. Your business will evolve from being a personal endeavor to becoming a mission-driven business, supporting team members and focusing on a long-term vision beyond just paying the bills. This shift is crucial, and recognizing when it happens can guide your decisions on outsourcing.
What Got You Here Won’t Get You There
Do you remember the early days of your business? It was all you could think about, and you probably spent countless hours wondering where your next client might come from—or if you’d ever find one. It’s exhausting to be in that season of business, constantly fueled by your "why." For many, their "why" is their fuel, driving them to keep going despite the bumps along the way.
In those early stages, it’s all about generating enough income to validate your decision to start your business. But once you reach your income goals, you probably notice you’ve hit a ceiling on how much you can actually do on your own. When your business starts paying for your life, you have more energy to focus on other things.
The Critical Role of Outsourcing
Once your business reaches a certain level of growth, it's time to start thinking about outsourcing. If you are scaling, you have to outsource at some point. You’ve likely already outsourced at least a few things in your business, and are already reaping some of these benefits, but knowing what and when to outsource is a key component of any scaling business.
Capacity Overload: When you’re juggling multiple roles and tasks, it’s easy for bookkeeping and other critical functions to slip through the cracks. If you find yourself overwhelmed and not able to get things done, it might be time to outsource.
Specialized Expertise: Certain roles, like bookkeeping, legal work, marketing, etc. require specialized knowledge. Outsourcing these tasks ensures they are handled by experts, in tunr reducing the risk of errors and increasing operational efficiency.
Focus on Growth: Outsourcing these tasks frees up your time to focus on strategic activities that drive growth. This shift allows you to work on your business, not just in it.
You’ve probably heard a biz guru or two saying something things like…
“Outsource as soon as you hit $X in revenue!”
“Stay in your zone of genius and delegate the rest!”
“You need a team before you hit a ceiling on income potential!”
While this advice is helpful, it’s essential to take it with a grain of salt. You already know that almost nothing in business is a one-size-fits-all, and that applies with outsourcing too. Here’s the reality of outsourcing to take a look at:
Outsource Tasks at Your Pace: You can outsource tasks whenever you want to—there’s no hard and fast rule about how much you have to make first. You just want to ensure you have the revenue to pay for it!
Stay in Your Zone of Genius: Yes, it’s crucial to focus on your strengths. However, when you’re ready to hire your first contractor or employee, the role you need to fill might be different from what you think it is. Let yourself do what you know and are good at, and lean on experts for the other tasks that you don’t love doing or don’t feel super confident in.
Building the Right Team Takes Time: Finding, hiring, and training the right team takes time, but it will free you from having everything on your plate which will help you make more money, and allow you to step away from the day-to-day operations.
NOW you’ve shifted from a lifestyle-driven to a mission-driven business! When you outsource things in your business, it becomes so much bigger than you. The revenue is not only going to support you, but you now have other people who you are paying and supporting their lives too.
Why Hiring a Bookkeeper is a Game-Changer
Everything gets more complex as your business scales including your finances. As the numbers grow so does the financial responsibility, and it can become a lot to manage in a hurry. The thing is that you want to have the right bookkeeper in your corner before it becomes too much to handle on your own. Here’s why hiring a bookkeeper should be a top priority:
Accurate Financial Tracking: A professional bookkeeper ensures your finances are accurately tracked and categorized, providing a clear picture of your business’s financial health.
Regular Financial Reviews: Good bookkeepers meet with you regularly to review financial reports, helping you understand where your money is going and how to make informed decisions.
Compliance and Savings: Proper bookkeeping helps you stay compliant with tax regulations and can identify potential savings, ensuring you’re not overpaying on taxes or missing out on deductions.
For many business owners, bookkeeping is one of, if not the FIRST thing they outsource. We hear all the time, “I wish I would have hired the right bookkeeper sooner.” But we never hear, “I hired a bookkeeper TOO soon.”
Legal Considerations: Protecting Your Growing Business
Along with the financial complexities, other things come into play as your business grows. legal protections become increasingly important as well as compliance and there’s a lot to be taken into consideration as you scale. This is an area of business that is always a good idea to outsource to have peace of mind in knowing it’s all done right and you are protected. Hiring a lawyer to review your contracts and terms can protect you from potential legal issues and even if you don’t need a full-time lawyer, having legal advice available can help navigate complex situations and safeguard your business. You can’t put a price on knowing that you and your business are protected and secure legally!
Embracing the Shift: It’s Okay to Let Go
Letting go of control and outsourcing can be challenging, but it's a necessary step for growth. You’ve already had to make plenty of tough decisions along your business journey, and we can guarantee you that they aren’t over yet. Outsourcing tasks and bringing someone new into your business is never an easy choice, but it is essential if you are scaling. Here’s how you can do it effectively and hopefully ease the decision-making process!
Assess Your Budget: Ensure your business can financially support outsourcing. Consulting with financial advisors can help determine if you’re ready to outsource or hit, and what you can afford to pay someone.
Identify Key Roles: Determine which roles are best outsourced based on your business needs and capacity, and what you know and enjoy doing the most. What are the revenue generating activities and what other tasks need to get done to support them?
Trust the Process: Lean on professionals for their expertise. Trusting others with parts of your business is hard, but it will lead to more efficient operations and long-term growth.
Advisory Services: Your Secret Weapon
At Magnetic Bookkeeping & Consulting, we’re not just about crunching numbers. We offer consulting and advisory services to help you make informed decisions around things like outsourcing and hiring. Once you realize your business is moving into a mission-driven position, hiring is going to be a complete game-changer. We’re here to help you analyze your books, understand your income and profit, and provide you with the data you need to make informed decisions that lead to your inevitable success.
We can help you:
Assess Financial Readiness: Determine if your business is financially ready to outsource and understand what you can afford.
Identify Key Hires: Understand which roles will provide the most value.
Plan for Growth: Use your financial data to create a sustainable growth strategy.
Running a thriving business is a wild ride, and we’re ready to support you and see your mission-driven business thrive! All it takes is one 30-minute call to learn what smart money moves can do for your business. Ready to shatter the ceiling and make strategic hiring plans for your business? Book a consult party with us here, and let’s get this party started!
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