Do you “spend” working in your business or do you “invest” your time to work on your business?
The challenge that I find a lot of business owners face today is that they are so busy working in their business that they cannot see the full potential of their business. So many times I look at a business and think the owner is doing well, only to discover on talking to them, that they are not even earning as much, (when their income is converted to an hourly rate), as their top employee’s.
A while ago, we had a client who owned a commercial cleaning business. This client used to work each week doing the cleaning himself. When asked how much would it cost to employ someone to do the cleaning he was doing, he replied “ about $600 per week”. He was then asked how much extra business he could generate if he spent this same time in a week looking for new customers. He said he could generate about $5000 worth of new business in a week.
It’s obvious, looking from an outsider’s perspective, that the logical thing for the owner to do is employ a cleaner to work in the business so that the owner can work on the business.
How much mundane work are you doing that could often be completed by a teenager after school. Think about your business. How much work do you do that could be done by a junior or a casual, or maybe even a semi retired person?
What are your opportunity costs?
What value do you place on your time? How much extra business could you generate if you employed someone to do the day to day work?
What would it mean to your customers and your business if you were “freed up” to follow up enquires that haven’t been chased up, socialising with customers encouraging them to come back or phoning existing customers to see if there is anything they require? The bottom line is you could be spending time on vital sales and marketing, but you’re bogged down doing the day to day, time consuming, physical work that someone else could be doing.
How much time do you spend developing new marketing strategies, analysing Test & Measure results, instigating relationships with other businesses and the host of other necessary activities that make the difference between a successful business and an average business?
There’s a whole heap of things that a business owner needs to get done in an average day. Successful business owners are those that do the things that are important in maximising profit rather than concentrating on the “urgent problems” that arise every day.
Use professional advisers to help you in areas that you aren’t an expert in. Get yourself a competent accountant and hire a bookkeeper, these sorts of people will save you time and money.
For example if you were to invest in a Real Estate Development, you would take it for granted that you needed to hire the services of a Project Manager to advise you or to co-ordinate the Architect, Draughtsman, Town Planner, Finance Manager, Construction Manager, Marketing Manager, Sales Manager, etc.
When we get involved in business, most of us do so with little or no assistance at all. Yet “a business” as an investment can and does, when well managed, outperform every other type of investment.
Take the challenge and look at your business as an investment. Look for a return on your invested capital as well as an hourly rate of pay in excess of your top employee’s.
Review what happened last year, analyse the results you achieved, see what adjustments you need to make to obtain the results you require, plan next year and look at what assistance you require to obtain the desired result.
Remember above all else, that time spent working on your business is far more important than time spent working in it.