Note: Listen to this post instead using the audio player below, and consider subscribing on your favorite podcast player!
Every action you take in business either costs you money, or it costs you time.
As entrepreneurs, it goes without saying that we very well may be low on both of these. From the new business owner working a full-time job on top of running their business, to the cash-strapped company that can’t afford to make that extra hire, we are often spread extremely thin without much to show for it.
Unfortunately, unless we change the way that we approach business, it is easy to stay stuck in this trap forever.
Scaling Your Time Vs Scaling Your Money
The key difference between spending money to grow your business versus spending time, is that money can be scaled, but time cannot.
Regardless of how efficient you become, you will only ever have 24 hours in a day to get things done – and a lot of that will be used for things like sleeping and eating.
You could use every minute of that at maximum effort, working on meaningful tasks with perfect time management, yet time will still limit you.
Money on the other hand, can be scaled infinitely. There is no limit to how much you can spend.
Even in the instances where there needs to be human work done to move the business forward, this can be paid for in the form of new hires or by outsourcing tasks.
This is an instance where it’s important to be self-aware of your business goals. If you want to grow beyond a certain level, then you must develop profitable systems.
Companies that figure this out are the ones that skyrocket quickly – going from seemingly unknown to 7 figures out of nowhere. They have figured out how to put $1 in and get $2 back, repeating the process as long as they can.
Bigger Isn’t Always Better
One of the beautiful things about online business is that you can still be extremely successful, even if you never end up hiring anyone.
Sure, you’ll always be limited by the amount of time in the day. And regardless of how skilled you are, you probably won’t ever run a company beyond a certain level.
But that’s not a bad thing.
In fact, I would wager for most of us, the headaches that running larger companies can bring is not worth it. The day-to-day work life, the problems, struggles, and attention is more of a burden than it is a blessing.
Especially since you can go so far – providing a full-time income and more, just on your own.
And even with just a few remote workers that don’t require a lot of management, you can go even farther.
Again, self-awareness is key. If your long-term goal is to run a massive company, you need to take the appropriate steps to build that foundation.
If your goal is to peacefully run something small, you need build a foundation that allows for growth without hiring a ton of employees.
Where Should Your Money Go First?
One of the most exciting stages of running a company is when it starts to become self-sufficient. You finally have a little extra money to work with, something that can actually move you forward and take you to new heights.
Today, this doesn’t even have to be a whole lot of money. Even a few hundred dollars a month is enough to dabble in paid advertising, hire a full-time virtual assistant, or do something else that can bring you new opportunities.
Of course, the less money you have to work with, the more you have to make it count. Otherwise, you end up no better than you started off.
The key? Reinvest into something that immediately yields a positive return.
Now is not the time to throw money into long-term projects that may or may not pan out.
You want to put money in, and get it back with a profit as quick as you can.
Then do the same with that money, as long as you can.
Most often, this means doing more of whatever earned you that initial money in the first place, if there is room to scale it further.
A Personal Example
When my baby product brand was getting off the ground, we invested heavily in influencer marketing.
Manufacturing our products was cheap (because we owned the machinery and could run small batches), so the majority of our monetary costs was in shipping. To start out, we specifically worked with micro influencers that didn’t ask for any form of additional payment on top of receiving the product.
Of course, there was a large time cost to arranging these deals. Not only did we have to find the influencers, but we had to message them, follow-up, arrange details, and so on.
Since we had proven that influencer marketing was already working for us, we hired a virtual assistant to handle this entire process. They would find the influencers, arrange the deal, and add the influencer’s shipping address and product choice to our order management system. Our order fulfillment team would then mail these out just like any other order.
It became seamless, completely hands off, and removed me from being involved in the process at all, giving me all of my time back.
That $350 / month we paid for a full-time VA (who admittedly, ended up working on some other tasks as well) was well worth it. Not only did we make more money from arranging more deals, we did it at a far cheaper cost because I was no longer working on it.
Other Great Ideas
The key to scaling any system is knowing your numbers at each step of the process.
You need to know exactly how much money you’ll earn for each dollar put in. You also need to know how long it will take for that money to return to you.
For example, you may profit off of an advertisement the first day you run it.
Or, you may make just as much money by investing in another article for your blog, but it may take 6 months for that article to actually pay for itself.
When money is tight, you should prioritize low-risk, short-term projects that will return your money back to you quickly. Save the longer-term projects for a time in which you have healthy cashflow and nothing else to invest in.
Some good examples include:
- Scaling whatever’s currently working – doing more of it, or cutting costs.
- Direct response advertising. Note that PPC advertising like Facebook Ads or Google Ads often are unprofitable at first, and you may need to run many variations to end up with a profitable campaign.
- Hiring someone whose job can be directly tied to revenue. Or, hiring someone that frees up your time, so you can do work that ties to revenue.
- Education and training that can help you make more out of what you already have.
Some poor examples may include:
- Launching new product lines.
- Branding campaigns.
- New projects that do not tie in, or help lift up your original revenue source.
Calculate The Value Of Your Time
If you’re struggling with the idea of outsourcing or hiring, there’s one simple rule of thumb to follow.
Take whatever you could earn for an hour of your time – even if it is only minimum wage. If you’re able to outsource something cheaper than that price, you should always do it.
This is true even if the person you’ve hired isn’t as efficient as you are.
For example, let’s say you earned $8 an hour. You outsource a project that would normally take you 1 hour, costing you $8 in time.
You can outsource this to someone that you’d pay $2 an hour. Even if they take double the amount of time to get the work done – costing you $4 in total, then mathematically you’ve still come out ahead.
I am convinced that business owners should continue working part-time jobs if it means they’ll be able to hire 2 full-time employees from the Philippines – it just makes sense mathematically.
Outsourcing: Building Full-Time, Philippines Based Teams
If you’re a solopreneur looking to move to the next level, then you should consider making your first hire from the Philippines.
Hiring a Filipino worker can be 10x cheaper than hiring somebody from a country like the U.S or U.K, and the quality of work will be just as good.
I consider it to be one of the biggest advantages my eCommerce brands had as they were growing.
As for what role to hire, it typically depends on the type of business you’re running.
Bloggers and content creators may benefit from hiring a writer or video editor. Freelancers may benefit from hiring the same role that they perform now, moving from a solo freelancer to a small agency.
Most businesses however can benefit a lot from a virtual assistant – somebody who frees up your time, by taking care of all the small tasks that you don’t really think about. Some examples include…
- Customer service
- Posting on social media
- Email outreach
- Data entry
- Any task that can be done solely on the internet.
Think about it – how much do you do each day that could be done by someone else, if you only took a moment to show them?
With over 50 video lessons, it contains everything I know about recruiting the best possible talent for the best possible price.
Failing to reinvest back into your business will severely hamper its growth.
While you will only ever have 24 hours in a day, there is no limit to how much money you can pour back into your business. It is the act of reinvestment that turns small hobbies into massive companies, and the key is creating profitable systems.
I’d love to learn more about your business, and what your immediate plans are to help it grow. Leave a comment below and let me know.
To your success,
– James McAllister