Hiring remote workers to help grow your business is an exciting part of entrepreneurship. It represents growth of the business and an expansion of your own useful hours as a small business owner. However, it also means controlling spending on projects. Unfortunately, you cannot simply hire remote workers and walk away. You (or someone you delegate to) must be able to monitor the amount of money spent on the projects assigned to remote workers, especially if workers are paid by the hour.
It isn’t uncommon for project spending to get out of control if left unmanaged. This post will walk you through the necessary steps to make sure that doesn’t happen. Controlling spending on projects performed by remote workers don’t have to be complicated or take up a lot of time. Follow this outline from the beginning of every project to ensure your spending is right where you expect it to be.
If your small business is booming (or you are ready to make it boom), it can be tempting to go all in quickly. As a savvy business owner, avoid this temptation. Project spending can get out of control if it is not managed correctly, and you may find out too late to turn it back around. Losing money on projects is never a good way to end the day as an entrepreneur or small business owner. By keeping track of where and how you spend your money, you will easily be able to grow your business utilizing remote workers. The steps to controlling spending on projects are simple.
Let’s go into each step in a little more detail. Each step is simple, but no step can be missed in the process. When you follow these steps without fail, you will be able to effortlessly control your spending on projects.
Controlling spending on projects actually starts before the project kicks off. It is essential to meet with each worker on the project to ensure clear expectations are laid out. A remote worker will need to clearly understand the project requirements in order to come up with a project estimate. You should review this project estimate in detail to make sure you are in agreement with the hours and the total expense. After reviewing the estimate against your project budget, you may have to tweak the project itself to reduce requirements or revise your expectations with a remote worker. Also clearly lay out any expenses that a remote worker will require or is authorized to make. Check for understanding with each remote worker. The clearer everything is laid out, the fewer surprises will occur down the line. Having this meeting prior to project kickoff is essential to controlling spending on projects. Once the project gets started, any misunderstandings can end up costing you wasted hours and expenses very quickly. Clear guidelines and expectations up front are a must!
As a small business owner on a tight budget, you must have a lot of structure to the hours remote workers’ work. Determine the number of hours that each remote worker is authorized to work so that you can better control spending on projects – especially in the beginning. Depending on your specific project needs, workers’ hours will vary. If you are just starting out with remote workers, you may want to consider starting out small with a few hours during the week. Test the waters for a few weeks and adjust up or down as necessary. By having an agreement on the number of hours to work, you will be able to anticipate your weekly project expenses. This reduces the chances of surprises at the end of each week. Once you have determined the hours, make sure the expectation is clear to the worker.
Controlling spending on projects requires that you carefully track hours that are charged against the project. The best way to do this effectively and efficiently is to create a document where you track each worker’s hours and their individual rate. Because you have a specific number of hours, you should be able to easily estimate your week’s expenses by multiplying the rate by the agreed number of hours worked. However, never forget to go back and verify. At the end of each week, update the spreadsheet with actual hours charged and calculate your total expense for the week for each worker. While most weeks there shouldn’t be any discrepancy between estimated and actual, there may be special cases or exceptions. Don’t wait until the end of the month to balance the books. If there are any surprises or additional charges, you will want to uncover them quickly so that your spending doesn’t get out of control. Once you have each worker’s hours summed up, simply add it all together for your total weekly project expenses. Compare your total to what you had estimated and see if any adjustments need to be made.
By following the above steps, controlling spending on projects can be quite simple and straight forward. By using this method, you will always be aware of and comfortable with the amount of money you are spending through remote workers. The beauty of this method is that you are always able to adjust as you need to. If spending is too high or low, adjust accordingly! It is that simple.
After you make adjustments and get your projects flowing smoothly, you may choose to reevaluate your needs. If you have done your planning correctly, you are likely to start to see your gross profits increase over time. Once you start to observe this trend, you may choose to increase the hours of current remote workers or hire new workers. The key to controlling spending on projects is to start small and incrementally increase over time as needed.
Controlling spending on projects is an on-going process that will forever be a part of your business. Even the most successful businesses (both large and small) must track every dollar spent. The closer you manage your spending and expenses, the smoother your business and projects will run. By following these simple steps, you won’t get an unpleasant surprise at the end of the month or end of the year. You will be able to know exactly how each dollar is spent and adjust accordingly throughout the year. Controlling spending on projects doesn’t have to be a complicated or tedious project, but it is absolutely necessary. As with everything in your business, you will get better and more efficient at project control over time. Start out small and build over time as your confidence grows.
Melissa Ricker is a nuclear engineer and a professional freelance writer specializing in career growth, technical writing and online entrepreneurship. She writes a blog, Engineered Motherhood, for working mothers who need help balancing career growth and time management.
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