Yes, you read that headline correctly.
I know that the statement: “Make More Money By Doing Less Work” stands against conventional entrepreneurial advice:
“You need to be working 14 hours days, everyday”
“Holidays! What’s a holiday?”
“I got 3 hours of sleep last night, whilst I was listening to an audiobook”
And, don’t get me wrong, you definitely need to hustle to get any business up and running, but once it is…
I would argue that you could actually become more profitable and can make more money, by doing less.
Let’s look at a quick quote from arguably the most well known and well loved entrepreneur of all time:
“As much as you need a strong personality to build a business from scratch, you also must understand the art of delegation. I have to be good at helping people run the individual businesses, and I have to be willing to step back. The company must be set up so it can continue without me.” ~ Richard Branson
How to Make More Money by Delegating
In the rest of this post, I will outline the 4 key steps to the outsourcing and delegation process intertwined with a short case study showing how I acted upon Richard’s advice just yesterday to make myself more productive and to (in theory) enable me to make more money and create more value, by doing less work on our new Virtual Team Building Platform: Virtual Valley.
1. Identify & Document Task
There are certain tasks that should / shouldn’t be outsourced.
And it is your job to make this decision; here are some guidelines…
The most important concept to understand when considering the delegation of a task or role is cost, more precisely: Opportunity Cost.
First you must understand how much money it will take to outsource the task / process effectively.
You must then understand the Opportunity Cost associated with you completing that task / process.
E.g., if you can outsource a 5 hour task for $10 per hour and you know that when you spend your time on high dollar value tasks (e.g. selling), your time is worth $20 per hour, you are effectively “losing” money by completing that first task when you could be selling.
If that comparison is not conclusive, here are three other factors to consider:
- Do you enjoy the task?
- Are you good at the task?
- Is the task location specific?
We have created a tool that will automatically define the “outsource-ability” of a task/process based on your input, click here to download.
You now must document the process in written or video format using screenshare software. We like to use written working procedures supplemented with screenshots and video where necessary. [Screencast-o-matic is a good free product for making walk-through videos of processes.]
This step is crucially important because in order for a system to work effectively and to be continually improved, it must be documented.
It will also ensure that crucial business knowledge is retained even as your staff come and go.
In our example, I was looking to launch a daily podcast that will track Virtual Valley’s journey from idea to $4m exit, as I believe this will provide useful information to other entrepreneurs on the same journey (which also happen to be potential customers).
However, I do not think that editing audio for 1 hour each day would be an effective use of my time.
Looking at the questions asked above:
- Can the task be completed by a Team Member cost effectively? – Yes, around $3 per hour
- Do you enjoy the task? – No
- Are you good at the task? – No
- Is the task location specific? – No, audio editing can be completed anywhere
This was an easy decision.
2. Hire Team Member
Having now identified the task / process that is to be outsourced, you now need to find an awesome Team Member to perform this task/process.
At Virtual Valley, we spent 4 months recruiting awesome Virtual Team Members for the “supply” side of our marketplace. (We are starting with JUST Filipino General Virtual Assistants (VAs) because they speak and write English very closely to American English, but will branch out to other roles and nationalities in the future.)
You can copy our approach which is outlined in this post; however, if you would like to skip this recruitment process, take advantage of our automatic payroll service and proprietary time tracking software, you can create an Entrepreneur account here.
Once you’re logged in, you can fill in a form like the one below to post your role:
You can browse through our curated database of VAs here:
If you would like to clarify any points before hiring, you can message your potential new Team Member through the platform by clicking the “Message Team Member” button on their profile:
You can then “Hire Team Member” by using the orange button. You will then be prompted to agree with the Virtual Valley Terms Of Service and to validate your PayPal account. (Direct credit/debit card payments coming soon!)
Once validated, the hiring request is sent to your new Team Member. Once this is approved, you will receive a notification email and will now be able to view the contact details of your Team Member on their profile.
You are now free to hand over the Working Procedures you created in Step 1 to your new Team Member and to coach them where necessary.
All time spent by your new Team Member will be tracked by our proprietary time tracking software which will feed the data back to the “My Team” dashboard of your Entrepreneur account:
Each day, you will be able to log in and see the total time worked by your Team Member and an estimate for their total Active Time, as measured by keyboard and mouse activity.
You will also be able to review six screen shots taken per hour from their machine at random intervals.
At the end of the month, you will be able to review your Team Members total time spent and total payroll spend by clicking on the “Time Tracking Report” button on your profile:
This amount will then be taken automatically from your PayPal account, minimizing your time investment in the outsourcing process (to give you more time for those high dollar value tasks.)
In my example, I spoke to a couple of the Virtual Team Members in the Virtual Valley database to determine who had specific experience with audio editing and then hired them as shown in the images above.
3. Review Performance & Optimize Process
Ok, you now have an awesome Team Member operating your task/process that you have outsourced.
You will now find yourself with more time on your hands…
Which is EXACTLY what you want.
You want to be able to spend time thinking about and working ON your business and not IN your business (Check out The E-Myth by Michael Gerber for a more comprehensive explanation of this topic.)
This extra time should be invested in those higher dollar value activities we discussed in Step 1 or working on improving the efficiency of the processes you have already outsourced.
However, there is still some work to do on the process outsourced in Step 2 before you can move onto these higher value tasks.
You will need to monitor the progress of your new Team Member closely for a couple of days, just to ensure they are comfortable with the process.
You can then arrange a short call with your Team Member to review their performance and the process. Any improvements that are made MUST be documented in the Working Procedure.
We made significant improvements to our podcast creation process after I was able to step out of the process and look at the system from an external viewpoint. Here are a couple of examples:
- Instead of emailing, each day I upload .mp3 files to a folder in Google Drive
- After editing, instead of emailing our Team Member uploads final podcast .mp3 file
- This automatically sends an email (Using IFTTT) to another Team Member who is responsible for uploading the final podcast file to our audio host
These improvements manage to save me and both of the Team Members involved significant amounts of time that can be invested into other areas in the business.
As you repeat Steps 1-3, your business will morph into a number of interconnected and autonomous systems powered by Virtual Team Members and software that operate independently of your input. Allowing you to focus ON the overall system, ensuring its productivity and efficiency.
Now, you may be thinking:
Why are we doing this?
Aside from ensuring that your clients experience a consistent and reliable service from your business, it will also become significantly more attractive to buyers.
Not buyers of your service…
Buyers of your business.
That’s right, by taking on the systems mindset we have been discussing throughout this post, you have actually started to build your business as a product itself.
If you had the choice of purchasing a business:
- that relied heavily on it’s founder
- whose delivery was inconsistent
- that had no documentation
Would you chose to purchase it over a well oiled system – fully documented – that ran autonomously?
In our case of the podcast process, this is the third process we have chosen to outsource and will be continuing this until the whole Virtual Valley process is one autonomous network of efficient tasks/processes. You can follow our process through our podcast which will be distributed through our blog 🙂
Summarizing the Process
In summary we have:
- Step 1: Taken 1 task/process
- Step 2: Have “outsourced it” with an awesome new Team Member
- Step 3: Have reviewed their performance and optimized performance
- Step 4: Have repeated this with all processes within your business
Now it’s your turn…
Are you going to listen to Richard?
Or are going to go back to your inbox to deal with menial admin tasks that are not directly correlated to you creating more value for your customers (leading to more money)?
If you would like to take advantage of the recruitment and payment process we have built at Virtual Valley so you can make more money by delegating, click here to create your Entrepreneur account.
Before you head over to Virtual Valley to get started with delegation or click onto the next awesome GrowMap blog post, I need a favour from you…
Do you have a friend or contact that always says that they are “sooooooooooo busy”?
Well I think you could be do them a massive favor by using the social icons below to send this article over to them. Richard (and I) would be grateful 😉
And finally, please put your questions and comments re: delegation and outsourcing in the comments below. I will be responding to each and every one!
DISCLOSURE [from Gail Gardner, founder of GrowMap]: I requested Tom write this post to explain how his outsourcing process works because I and many of my collaborators are at the point where we have so much to do that we really need to hire others to assist us. His solution provides more accountability which can reassure users that their money is being well spent than any others I’ve examined.
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- Richard Branson’s Method To Make More Money By Doing Less Work - January 31, 2016