Is DIY Bookkeeping Worth It? Evaluating the Opportunity Cost for Small Business Owners
Welcome to Better Business Insights. I'm Liz Jarvis and in my business, I help people to understand their financial information and make better decisions. We take the stress out of it. It shouldn't be stressful to have a look at your numbers. It should be an enjoyable, collaborative kind of experience - that's what we do here. And today, we're going to talk about, do you do it yourself? There are so many things in small business today that you could do yourself, you could do your own website using click funnels or something like that. You could do your own bookkeeping getting in there and, keeping that record yourself. You could, be the main sales-person for the business and not do it yourself on the other things. So what are you doing yourself in your business and is it actually a good use of your time? I think marketing, bookkeeping, cleaning - all those kinds of things that are attempting to do yourself - it’s important to have a look at - what are the benefits if I have someone else do it? Now we want our businesses to be profitable. And sometimes we make the mistake of thinking “If I do that myself, I'm saving money”. I heard one speaker say that a business owner's time is worth a thousand dollars an hour, and that might sound ridiculous. Or if you're in a big business, it makes perfect sense. But think about it. What is the opportunity cost? We call it opportunity cost in accounting and economics. It's that invisible cost of - what else could be done with the time you're spending on the task. The opportunity cost of say doing your own marketing, is that you spend time on it, you spend money on it. You're not really sure what you’re doing because you haven't got the background in marketing that would smooth the way for you to show you what your plan is, what your market segments are, how you're targeting them. And so on. Bookkeeping is another area that every business owner has to deal with, that also can get quite wrong. Now, if you're cutting costs in the bookkeeping area, by doing it yourself or using very cheap software and we're not spending time to integrate systems, then the opportunity cost of that is again, wasted time, potentially frustration, potentially embarrassment when you realise that you don't really understand it as much as you could. I think sometimes we've got to slow down to make money, to make more money. Slow down and think about what if you were selling your product instead of sitting behind the laptop, doing the bookkeeping or building a funnel. What is your real worth in the business, if you're working on the things that you love the most. And try to find the time and money to get others to do those things for you, it's worth the investment of borrowing a little to get things done. I've made the same mistakes. If you follow me, you'll see all sorts of mistakes I made as I iterated my business using click funnels and all sorts of things. But the truth is I should be face-to-face with you guys. That is where my value is. My value is sitting with my clients, not doing my bookkeeping or building my funnels and trying to work out how to market. That’s their jobs for the experts. On the other hand, you might be spending way too much, because you still haven't communicated well enough to the experts exactly what your business is. So, I hope those two examples, marketing and bookkeeping, give you some insight into thinking a little bit differently about what you do yourself in your business. Have a great day, reach out if you've got any questions and have a look at another episode of Better Business Insights. Thanks.
There are many areas of business that are tempting to do your self. Consider the opportunity cost of doing the things you are not expert at I share some examples in this video. Reach for a free strategy session and I can look over it with you.
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