If you own a business, you know how important it is to keep an eye on the bottom line. In fact, almost everything you do should have some consideration of how it will impact your expenses. As important as it is to save money and find ways to lower costs, you also need to pick and choose your battles. There are plenty of times when doing things yourself isn’t always the best use of your resources. Sure, you may initially save some money but in the long run what you are giving up is much more important. Before you decide to tackle your next project on your own, you need to weigh the cost/benefit. A short-term gain may not be worth the long-term consequence. Here are four reasons you should at least consider outsourcing some tasks instead of doing everything yourself.
- The value of time. It may sound like hyperbole but there is no greater resource than time. Time is the one thing that puts everybody on a level playing field. We all have the same 24 hours in a day and what we do with it makes all the difference. One simple question you should ask yourself before taking on a task is: Is this the best use of my time? You can throw money into the equation and justify how the expense is worth it, but at the end of the day you need to take advantage of your time. Sure, you may be able to paint a garage, build a website or address 500 envelopes but is that the most efficient use of time? Almost certainly the answer is no. As an investor you need to spend a bulk of your time focusing on tasks that impact your bottom line. You should either be generating new business, buttoning up existing deals or overseeing your team. Trying to do everything in your business leaves you spread thin, burnt out and not nearly as efficient as you want to me. Doing tasks yourself in the right situation makes sense, but time should be a greater factor than money.
- Loss of focus. The idea of multitasking sounds better than it actually is. The ability to handle three different tasks at once can give you the façade that you are being efficient. The reality is that spreading yourself too thin is often counterproductive. When you decide to tackle everything in your business you bounce around from task to task. Instead of putting your head down and completing one thing at a time, you often have a handful of unfinished projects. With that you are forced to prioritize what is most important, often leaving truly essential tasks left to waste. Instead of being a jack of all trades you should consider doing what you are best at. You may know how to set up your website or be willing to show a rental to a tenant but that doesn’t mean you should. When you take time out for these tasks it diverts your focus from where you are really needed. At the end of the week you will be left with a pile of work and the tasks that you did accomplish you aren’t sure you did them to the best of your ability.
- Poor quality. There is a difference between simply accomplishing a task and getting the job done right. It doesn’t do you any good putting a Band-Aid on a project if you are going to have to do it again down the road. Not only does this take even more time but it will probably end up costing you more money to have someone fix your mistakes. The reality is that you probably only have one or two things that you are excellent at. You may be great at accounting and management but only adequate at painting. As the adage goes, you get what you pay for. You can paint a living room, but is it going to be high enough quality to attract tenants, or buyers? If you get paint on the ceiling, drips on the trim or miss spots on the wall people will notice. You may not think that tenants notice quality of work, but they do. In competitive markets where there is increased demand they may decide to go in another direction.
- Big picture finances. As strange as it sounds when you are just starting out and have limited finances it is best time to outsource projects. If you really wanted to, you could probably scrape together funds to get any task accomplished. The may mean sacrificing a few nights out or eating from home for a few months, but you can do it. By outsourcing to have a Facebook campaign done by someone who knows what they are doing it may cost say $500 per month. If at the end of the month if you have leads coming in and can get a deal it is money well spent. Conversely, if you try to do everything yourself you will still spend money, just without the results. The same is the case with many of your smaller tasks. There is something to be said about paying for results. Spending money in the short term will sting and feel like a waste of capital but in the long run will be the best thing you can do for your business.
Everything in real estate should be viewed on a case by case basis. Paying to have the grass cut on a rental property five minutes away is a good example of something you can probably do yourself. However, in most cases outsourcing often makes more sense in the long run.
Blog post courtesy of CT Homes, LLC.