Outsourcing: The secret to physician well-beingFeb 03, 2022
Earlier I wrote about how your hourly rate can provide great clarity in how you spend your life energy (time) working to earn.
Outsourcing, when done properly, can greatly improve your personal and financial health.
By stepping back from the most technically difficult or frustrating tasks, we save our energy for key priorities or enjoying life.
It is not possible (or desirable) to outsource everything. We shouldn’t be completely detaching ourselves from our households or practices.
3 key criteria to guide outsourcing choices
But when it comes to making the right choices, here are three key criteria to guide you:
- Always outsource critical tasks like accounting and bookkeeping.
- Outsource the things you dread. If you hate cleaning your house, you’ll spend more time dreading it than if you just went to work to pay someone else to do it.
- Apply outsourcing principles to your tax planning. I’ll share an example with you below:
Realizing how busy she is in her practice, Yasmine hires someone to clean her house and a bookkeeper to handle the professional corporation. Each costs $40 per hour.
Assuming a combined personal and sales tax rate of 50%, Yasmine actually has to earn approximately $80 per hour billed by the cleaner.
The bookkeeping is much cheaper, however, because it is a corporate tax write-off and therefore only costs her $34 per hour billed by the bookkeeper (assuming a 15% corporate tax rate).
Looking at your own life, reflect on the following questions:
- Are you satisfied with the amounts you are spending to outsource?
- Are there places where you can cut?
- Should you do more within your PC?