AD (Paid Collaboration)
So you’ve started a small business, and it’s not what you thought it would be. I get it, I’ve been there. Most of us start a new business doing either what we love, or what we good at. Hopefully, both of those are the same thing. But what we don’t bank on is all the other stuff that goes along with running a business. Finding premises, marketing, sales, and of course the dreaded accounting. Many of us try to do it all to start with. It’s often a case of having to, until cash flow get’s going, it’s difficult to afford to pay someone to do it for you. Eventually though, you’ll realise that doing it all yourself isn’t always cost-effective. That’s the time when SMEs should outsource accounts.
Why SMEs should outsource accounts before anything else
Firstly, I am aware this is not for everybody. If accounting is your thing, by all means stick with it. But as somebody who has got it wrong, I’m here to tell you that you can actually save money by outsourcing your accounts. One of my businesses is a limited company that I share with a business partner. To start with, we needed to do our own accounts. Even now, all the book keeping is done by us. But when it comes to our annual accounts, that’s not for us.
We assumed that we would just do our accounts ourselves and everything would be fine. However, it turns out that there are all sorts of obligations we weren’t aware of. An annual submission to Companies House for starters, and then of course there’s the HMRC requirements each year. We took advice from an accountant a couple of months ago before embarking on submitting our accounts to HMRC. She informed us that we were about to pay tax that we didn’t owe. Not because of some dodgy loophole, but it turned out we hadn’t taken some essential factors into account.
For example, we had invested our own money into the business. We’d paid bills from our own accounts when we hadn’t got enough money in the business. We hadn’t taken back that money, or in fact recorded it in our accounts. By engaging the accountant, we ended up getting such good advice that we will now save money in the long run when we come to submitting our end of year accounts.
Other functions you can outsource as an SME
What you decide to outsource will depend on your personal strengths but here are a few ideas.
For us, digital marketing is the easy part of our business so it’s not something we would outsource. However, if it sounds scary to you, there are options!
- Consider going to someone who will teach you digital marketing – it can work out cheaper in the long run. We teach it one-to-one because it’s so much easier to take it all in when it’s about your business.
- Do it yourself to start with, then outsource when you can afford it. This allows you to get to know how it works, connect with your customers and let your personality shine through before you outsource.
- Consider engaging someone to do commission-only digital marketing if you can’t afford to pay for it up front.
Once your business starts to grow, having an independent HR function is extremely important. I have worked in places where there was no independent party to do HR and it became quite toxic. Outsourcing HR doesn’t have to mean having a HR department. Consider hiring a consultant who works with you as well as other clients to cut the costs.
If your business is regularly in mainstream media, or would benefit from positive media attention, consider hiring someone who can help you with PR. Like human resources, there is no need to employ somebody full time, simply take on a freelancer or engage a PR company part time to help with reputation management.