What is the return you earn on time invested? I’m not talking about the time your clients pay you for. I’m talking about the time you spend doing administrative tasks, creating a DIY website, or customizing a free service for your needs.
You may think, well my time is mine, right?
Yes and no.
Yes, you own all your time, and no, you don’t need to pay someone else for it. But your time is an asset and it has value, so how you spend it determines if your return is more or less than its value.
In fact, time is your most precious and irreplaceable asset.
How you spend your time will directly impact your bottom line. Unlike other assets, you can’t save it up for a rainy day. You can’t buy more time. You get 24 hours in a day like every other business owner out there. When it’s gone, it’s gone.
Nicole, this is getting a bit philosophical here. I just want to make a living. I’m not interested in the esoteric properties of time or dissecting the meaning of life.
What DIY Really Costs You
You decide that you are going to build your own website from scratch.
You will have complete control over the structure, the layout, behind the scenes SEO, and more. There’s no waiting for an outside firm to update your site. There’s no risk of looking like 50 other sites because you used a template.
Sounds great, right?
Not so fast.
You’re a smart cookie. I’m sure you are able to learn all of these things. The real question is how long will it take? Let’s assume it would take you 160 hours, or one month, to learn these things and build your own site.
When you perform work for clients, you are earning $50 net profit for every hour billed. If you were to pay yourself a fair market value, the cost would be $8,000 ($50 * 160 hours).
Before embarking on this DIY adventure, you request proposals from a couple of reputable web development firms. You learn that it would cost roughly $3,000 for someone else to create the website of your dreams.
If all of the “bids” were outside consultants, the answer is easy, hire the firm quoting $3,000!
Hold it right there Nicole.
The reality is, you don’t actually have to pay yourself. So, why spend the cash on an outside consultant?
First, and most importantly, if you do it yourself, you will miss out on the chance to earn $8,000 if you had been performing work for a paying client.
After paying an outside firm $3,000, you would still be ahead by $5,000 ($8,000-$3,000 = $5,000)
Still not convinced?
More reasons why you should consider outsourcing:
“So, if the math makes sense, should I always outsource?”
That’s not a cop-out. It’s the reality of doing business.
There are certain circumstances in which you may still wish to build it yourself. You may just be starting out and simply don’t have the capital available. You may not be established enough to use that time serving profitable customers. Each business is unique.
That is fine, just recognize that you are in essence paying yourself less than market, and ramp-up time to profitability will be longer.
Always remember, your time has value.
Take a minute to calculate how much your so-called free resources and services are costing you. If your time was an asset you could record in your financial statements, would you be embarrassed by how it is being spent? Do you still think free is free? Please share in the comments below!