Why you should hire an admin... (Part 1)

28 October 2019


Something I see over and over again is small business owners doing their own administrative tasks.  

When you’re just starting out and there’s no revenue coming in the door that makes sense - no need to pay someone else when you can do it for ‘free’ right?

The problem I often see is that business owners continue to think of their time as ‘free’ well beyond the startup phase. 

They complain about the amount of admin they have to do, often saying it’s why they can’t see more clients / make more sales calls / sell more paperclips… whatever they do.  

This is a big mistake -  because your time is not ‘free’.  In fact, it’s probably the most expensive time there is in your company.

Here’s a very quick example:

Let’s say you run an appointment based business and see clients for one hour.

You charge $95 for the hour but virtually everyone has to fill in forms, pay with card, have an invoice generated etc.  Which creates a lot of paperwork.  So, each week you spend 6 hours doing paperwork.

In a 38 hour week, your earning capacity should be $3610 (38 hours x $95 per hour), but because you spend 6 hours doing admin it drops to $3040 (32 hours x $95 per hour)

Now, what about if you hired an admin?

Let’s say they cost $30 per hour (once we add super, workers comp and other costs), you get them in for 6 hours per week so that you can work your full 38 hours.

So that’s: You work 38 hours and earn $3610

Your administrator works six hours and costs you $180

You’re left with $3430

That’s $290 per week more than if you did the admin yourself.

Ok this is a very simple example and also assumes you fill the hours with income generating work, but in reality the picture is often way better.

What do I mean?

Well, most of the business owners I speak to don’t actually like the administrative work, so they procrastinate and actually take 8 hours instead of six or, they don’t do it well with sufficient attention to detail, or make lots of mistakes.  So now, not only are you an overpaid administrative employee, you’re also lazy and ineffective!

What’s the solution?

Decide on your Effective Hourly Rate.  That’s ‘what my time is worth’.  To calculate this take the Gross Revenue your business earns and divide it by 1976 hours (That's 52 weeks x 38 hours per week).

Then, don’t do anything that you can’t get done at a better rate (unless of course you LOVE it...)

Think of yourself as the most expensive solution - because you probably are, so you should only do the work that requires your level of expertise and experience.

If you can get it done cheaper, delegate it.  And get back to doing the work that actually generates the revenue.

Brett Baker :)
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