Every entrepreneur or small business owner that I have met has a strong streak of “I can do that myself”. To my husband’s dismay, that has led to a laundry list of projects in various stages of completion around the house. In a marriage it can cause some friction, but in a business it can be deadly.
Ebola, science fiction, end of the world deadly?
Yes. So let me give you a virtual Haz Mat suit. Here are the 5 ways to know if you need a DIY vaccination stat.
1. Is it critical to the success of your business?
For example, if your business provides lawn care and markets primarily with word of mouth and local ads, then a web store with all the bells and whistles is not critical. However if you are an independent artisan or a small B2C manufacturer then a web store may be crucial to success. If it’s not critical to your success then feel free to try the DIY route first. If it is a key component then review the rest of the checklist to decide which track is best.
Keep in mind that the list of things critical to success should be a short one. I may feel freshly brewed coffee is absolutely necessary to my ability to string together a complete sentence, however the reality is that I can’t include it here. A real bummer, because it would save me a TON of money if I could deduct my coffee beans as a business expense!
2. Is it what makes your company / product / service unique?
Going back to my coffee for a minute… excuse me quick sip here… if I ran a coffee shop suddenly the coffee beans, their quality, taste, and preparation are important. I couldn’t afford to let someone else decide which roasters to use. I need to oversee the quality of prepared drinks, because that is what sets me apart from the competition.
As a business consultant I can’t just dump a client’s numbers into a third party program and hand back the standard report. Yes I can and should use all the tools available, however the company is paying for my insights and analysis. You may be able to pull the wool over their eyes in the short-term, however in the long run they will either switch consultants or purchase the tool themselves.
3. Can you achieve a professional result?
Think about the last time you watched local TV and didn’t use DVR to fast forward through the commercials. I guarantee you saw at least one cringe-worthy local ad. The photography looked like it was done on someone’s camera phone, the lines were so bad you didn’t even bother to groan, and the acting, well the less said the better.
Will you go to that store or use that service? I wouldn’t. I might talk about it with my friends, but in this case any publicity is not good publicity. If the action or product will be client facing, then you need to be sure it will be in keeping with the rest of your company. If in doubt, ask some professional colleagues or good friends that you know will be brutally honest.
As much as I love my 2 year old daughter, I don’t want my clients to think she designed my logo!
4. Are you qualified to do it?
In an earlier blog I mentioned using a CPA for my taxes. Other than I really hate filing taxes, I use a CPA because he/she is qualified to file my taxes accurately. My CPA knows when things can be deducted (200 mile trip to win new business), and when things can not be deducted (yes I’m still wishing my coffee could make the cut). The cost to hired a certified professional is well worth avoiding the potential cost of an inaccurate filing, or the risk involved of failing an audit.
Perhaps you own a small manufacturing company, would the potential workplace injury risk really be worth the cost to hire a trained professional to fix or maintain your equipment? If you own your office space, or manage office space, a licensed contractor is the way to go. There is a saying I’ve heard many times, and it’s a good mantra, “The cheap will come out expensive in the end.”
5. What is the return on your time invested (ROTI)?
Unfortunately both time and money are limited for any business. I’m sure you’ve often done at least a quick analysis of the return, the value, you will get for something based on the money that will need to be invested. Have you ever done the analysis for time invested?
You may think, well my time is mine, right? Yes and no.
Yes you own all your time, you don’t need to pay someone else for it. But your time is an asset, it has value, therefore how you spend it can return more or less for that value. Let me give an example.
You decide that you are going to build your own website from scratch. You will have complete control over the structure, the layout, behind the scenes SEO, and more. No waiting for an outside firm to update your site. No risk of looking like 50 other sites because you used a template. Sounds great right?
Not so fast. Do you know any HTML? Have you ever created your own CSS file? What FPT will you use?
I’m sure you are absolutely able to learn all these things, the question is how long will it take. Let’s assume it would take you 160 hours, or one month, to learn these things and build your own site. You expect your business to pay you at least $48,000 a year, which equals $4,000 a month or $25 an hour. For this example we will assume it would have cost you $2,000 to pay someone else to create the website of your dreams.
If you were comparing two outside consultants, the answer is easy, hire the second for $2,000! However there is one additional consideration, doing two things at once. If you build your site, you can’t be doing anything else. If you hire someone else, you can be out promoting your business, or creating a new product at the same time your website is being created. That can accelerate how quickly you hit certain revenue goals and save you a lot of headaches.
At the risk of sounding like I’m waffling, there are certain circumstances in which you may still wish to build it yourself. You may just be starting out, and simply don’t have the capital available. That is fine, just recognize that you are in essence paying yourself less than market, and your ramp up time to profitability will be longer.
If you’d like some tools to help you calculating your returns visit our website page on ROI.
I’d love to hear some of your experiences, good and bad, with DIY in your business. Please share here, or feel free to email me at nfende at smallbusinessfinanceforum dot com.