The Blog Of TL Wall Accounting

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Archive for August, 2016

Figuring Out When To Pay Someone Else For Work You Can Do

A common event with many business owners is when something either goes wrong or needs fixing and, instead of hiring out, they decide to take care of it themselves. Even if they can take care of the issue, one has to ask themselves if it’s always the wisest choice at the time.

~Cookiecat at Computer~
~Sage~ via Compfight

If income is a problem then there’s no question that if something needs to be taken care of and you can do the work that you should do it. However, even here, sometimes it might pay off to have someone else do at least a portion of it.

For instance, let’s say that part of your marketing campaign is to send out 50 letters a week for a month. You have a standard letter already set up and all you have to do is fill out the envelopes. The thing is, even if you’ve already printed out the letters, folding, sealing and putting stamps on those letters could take you 3 hours to do. If your hourly billable rate is $100 an hour, you just lost the opportunity to make $300.

In this case someone like a virtual assistant might have been the way to go. Many VA’s cost less than $20 an hour, and whether you supply them with the paper, envelopes and stamps beforehand, those are things you’d have had to purchase yourself. This means that not only would your costs have only been $60, which you could have written off, but you might have been earning money during that same time which means you’d have made $240 off the deal.

Let’s look at something much bigger. One of my clients recently realized that a few of his websites were losing traffic because he hadn’t upgraded them to the new Google standards of mobile speed capability. The cost for hiring this work out would have cost at least $2,000, which is a hefty sum.

Since he had the technical capability to do it himself, he decided to take that task on. The thing is, even though he knew a lot, things had changed over the years so he had to do a lot of research and testing. In the end, he put in at least 120 hours on those websites, and though he got things taken care of, since his billable hourly rate is $125, if he’d had a client or been working towards a client he could have possibly made $15,000. At the very least he could have been marketing his business and attained a new client.

It’s hard to decide when to let things go that you can do, but sometimes it’s worth taking another look at your projects and trying to figure out whether it’s cost effective to have someone else do it instead of doing it yourself. Always remember that you can write off all paid services that relate to your business and that might help you make a different decision if you need to.
 

How Do You Analyze Advertising Costs?

If you’re in business, no matter the business, you probably do some sort of advertising to try to get the word out on your business. Overall there’s two different types of advertising; online or offline. Within both of those there are multiple ways of reaching out to your potential customers, and each comes with its specific types of costs and benefits.

watch-clock

Let’s look at offline first. Some ways you might be able to reach others are:

* networking events
* mailers and brochures
* letters
* phone calls
* signs and billboards
* newspapers and magazines

The first consideration, the one most people don’t think about, is how much your time is going to cost if you’re trying to do it all by yourself. What you consider as your hourly rate needs to be taken into consideration before you undertake any of these endeavors to figure out if it’s worth the effort. Even if you hire someone else to do it you have to take into account how many hours they’re going to put into it based on your needs.

The second consideration is how much each item actually costs and your realistic return on investment is hoped to be. For instance, networking events aren’t usually all that expensive to go to so all you lose is time. For most people though it might take upwards of 20 events before you even get a “potential” client; no guarantees. Making phone calls are even less expensive but they can tax your mental toughness because it’s estimated that maybe one in a hundred will allow you to talk to them.

The third consideration is how fluid your business might be. For instance, if you’re changing things all the time then creating mailers or brochures might be a costly investment to undertake. As it regards magazines, you might have changed your entire business model by the time an issue has even left the shop.

The fourth consideration is the potential for longevity. Networking is the only one where you can possibly have consistent visibility with little effort and a low cost.

None of this means you shouldn’t do it; it’s just something you should consider when you’re ready to do any of it.

Now let’s look at online advertising. Here are some ways you might do it:

* website
* blog
* Pay-per-click ads
* content marketing
* video or podcasting
* social media

Here, the first consideration is branding. The reason for this is because, since you’re not directly in front of anyone, your intention is to drive them to your space, whatever that happens to be. Wherever you’re sending them, you’re going to want your brand to be explicit in telling and showing people what you do and how you can benefit them. The best thing about branding online is that if it doesn’t work well for you it can be changed relatively easy; you might not get those early visitors back but there are plenty more people to reach.

The second consideration is what your space is going to be or contain. Having a website of some type makes a lot of sense because even if you meet someone offline and you hand them a business card, if you have your website’s link on the card it might encourage them to stop by for a visit. Here you get to put whatever you want on your website to represent yourself and your business. You don’t even have to build any of these things on your own, but if you do there are templates that can help you get a start that don’t cost that much if that’s the direction you decide to go.

The third consideration is time. Just like above, if you’re trying to do it all on your own it’s going to take a lot of time to do it all. The lucky thing is that online there are automation tools that can help you along the way, but you still have to put some time into it to get it right; or…

You can go with the fourth consideration, which is cost. For instance, to get started with a website, it might cost you $10 a year for a domain name (weblink), as low as $3.99 a month for hosting that link, as low as a one time fee of $100 for a website template and you can be up and running in no time. You can add a blog to your website for free and get template themes free as well (although that can be a bit dodgy).

To create videos or podcasts you might to invest a little bit of money into buying a video camera or recording equipment but it’s relatively inexpensive. Most social media is cost free. Content marketing can be cost free if you want to do all the writing. Pay per click can cost as low as $50 a month for some sites based on your competition.

Sounds good doesn’t it? It can be… if you have some online skills and the time to put into it. If not, then you’re going to have to pay people do handle some of it for you, and in some cases, if you’re looking to do it right, it’s going to be a costly investment, though some of it is a one time fee and the bulk of it is still less than offline costs.

This is an area where looking at your hourly rate comes into play. It might cost you $1,000 to advertise in a newspaper or magazine for 3 months, but you can be earning money while it’s going on.

If you’re handling your own social media the hours you put into it can end up costing you more long term. It might cost you $1,500 to $5,000 for a good website but usually those deals come with at least a one year maintenance plan, which means you can change things up as much as you want without an additional cost. That ends up comparing well with creating mailers and brochures, which you might need to change within a few months.

Overall, your biggest concern is the group you’re marketing to based on what your business is all about. Blogs work for everyone because they show people your expertise and help you build a web presence on search engines. If you plow snow having a website still works, but you’re not going to want to spend a lot of money doing it and, except on stormy days, you’re going to have little use for social media.

If you provide services such as accounting or legal work, it’s best to push the flesh when you can because most of the people you work with are going to be local, and consumers like working with people they get to know. This is where signs and billboards can bring your business great benefits because your local clientele is more important for you to reach visually than people online.

This article is in no way as detailed as it could have been but it should give you an idea of the types of things you should consider no matter which direction you decide to go; you can even do all of it, which could work wonders for your business. The best thing about all of it is you get to write it off on your taxes; that’s why we accountants are here to help you on the back end. 🙂