If you’ve arrived here after reading Part 1 of this post, you’re probably asking yourself, “What is the most financially-productive way to spend time focusing on your business?” Let’s continue the conversation on how outsourcing your back office and business administration duties can greatly improve the success of your business.
Value of Time > Value of Money
As revered author and motivational speaker Jim Rohn once said, “Time is more valuable than money. You can get more money, but you cannot get more time.” Time is one of a small business owner’s greatest assets. There is a set amount of time available in each day. If you’re considering outsourcing, start by determining the value of the time you’re currently spending on those tasks. Get out your calculator and run a few scenarios like I did years ago.
When I was a young(er) business owner trying to balance work and life I was spread too thin.
I knew something had to give. But what would it be? Crazy as it sounds, I enjoy cleaning house. But, I began to recognize that it was hard to find the time to do it like I wanted. Consequently, it became a chore rather than a way to decompress and relieve stress. I was failing in the back office of our household.
After considering the options and going through a careful ROI analysis, I decided it made sense to outsource our housecleaning. It was going to cost me dearly, or so I thought. I essentially traded a very nice pair of new shoes each month for a consistently clean house. But it didn’t really cost me anything. The value of the precious time I was able to recoup to spend on my business paid off in multiples. Not to mention the intangible benefits I reaped by reducing those anxiety-filled, sleepless nights. Was it disappointing that I wasn’t able to pay more attention to our household’s back office, which I did enjoy taking care of? Sure.
But the task wasn’t getting done like it needed to, and not doing it at all just wasn’t an option.
This article isn’t about time management, but it’s hard not to at least touch on the subject. Especially since many business owners struggle to find enough time to tend to business operations, and plan for and growth.
There are plenty of authorities with advice on time management, but I found one article to be particularly relatable to business owners. Laura Vanderkam, author of I Know How She Does It: How Successful Women Make the Most of Their Time, says “It’s about having a good sense of value of your time …. as a small-business owner, you’re trying to grow your business and grow the revenue, and thinking of things that free up your time and free up your mental energy as investments in your business.”
Freeing up your time and energy might mean outsourcing some or all of your back office and business administration tasks or hiring a Chief Administrative Officer.
Expertise and Independence in the Back Office
A business owner deciding to outsource these responsibilities is directly re-investing in the business while setting their sights on growth. In addition to freeing up time for strategic planning and revenue-generating activities, outsourcing back office and business administration tasks offers several other advantages. For one, the people hired to do the outsourced work are experts at what they do. You’ll find the work done as accurately as possible with appropriate speed and focus.
You should also see a marked improvement in the quality of work, and process, of the completed tasks at hand.
Also, certain back office and business administration functions are better performed by someone who is objective and independent. This is especially the case with bookkeeping and other financial responsibilities where checks and balances are crucial. In addition, an outsourced provider can offer different approaches or ways of thinking about issues the business is facing. Whether they pertain to HR administration, compliance, or risk management, a fresh perspective could lead to valuable insights. This outside perspective is valuable, unbiased, and will serve the business well in the long run.
Independence and focus in the back office are achieved more easily when the person doing the work isn’t managing the business, being “managed” from within the business, or easily distracted by other tasks during the workday.
What’s Your Worst Pain?
The modern back office is not a simple, straight forward set of tasks. So, where do you start if you can’t outsource all of it? Identify and rank your pain points as a first step. If you’re in charge of managing the organization’s records and you really dislike it, begin buying back your time there. Or maybe you dread the tedious job of logging all of your organization’s vendor contracts into a database and tracking the expiration or renewal dates. Start there instead.
Knowing where to begin can be difficult, but don’t let analysis paralysis stop you. James Waters, who once served as deputy director of scheduling at the White House, said oftentimes we have to make decisions based on imperfect information. It may be uncomfortable to do that, but sometimes it just needs to happen that way. Do as much information-gathering and analysis as you can. But don’t let anything prevent you from promptly making a positive and potentially life-changing decision for you and your business.
If you delay the important decision of outsourcing your back office for too long, someone or something will suffer. It will likely be you, your business, and even your employees.
The Outsourced Back Office Under One Roof
Earlier we mentioned the overlap in issues and skills required for the performance of back office and business administration tasks. This is why we think of the two functions as one – the “modern back office.” Let’s expand on that.
We’re not suggesting that the individual in charge of corporate housekeeping should also coordinate HR and employee benefits. However, these two areas – and other areas in the modern back office – should be working closely where overlap does exist.
For example, a business with a 401(k) plan needs to document the plan trustee’s regular review of how the 401(k) plan’s investments are performing and whether the plan’s administrative costs (like those of the record keeper, third-party administrator, and any financial advisor) are reasonable. The documentation of these are included in business records, which are maintained by the individual responsible for corporate housekeeping and meeting “minutes.”
If these two areas don’t work together and share information, something is likely to fall through the cracks. That’s where the modern back office unraveling begins.
It’s doubtful that a business owner will find one individual with the skills required to perform all tasks. Even the most qualified Chief Administrative Officer isn’t likely an expert in all aspects of back office and business administration. Instead, they must look to others – employees or outside providers – to fill in the gaps.
For these reasons, we think it makes sense to integrate the back office and business administration functions and outsource the “modern back office” to a single provider that manages all of the tasks under one roof.
It’s hard to imagine a more efficient and effective way of taking care of business.
Taking Care of Business
Regardless of which term is used, back office and business administration mean “taking care of business”, literally. It all boils down completing administrative work – the right way, at the right time, efficiently and effectively. All while the business makes sales, develops products and services, and grows. These tasks might happen in the “back office,” but they deserve as much attention as the middle or front office. They’re the cornerstone of every business and without the proper care and attention, the business is likely to fail.
Your back office doesn’t have to take valuable time away from growing your business. Let’s explore together how On Point Business Administration can help you do both efficiently and cost-effectively as your complete outsourced modern back office solution.
On Point Business Administration looks forward to being the one taking care of your business.