Small business owners face many challenges, but one that affects them all universally is the fact they’re so busy working in their business that they can’t see it’s true potential. On many occasions it appears the owner must be doing well, but when you look a little deeper and their income is converted to an hourly rate it’s less than that of their top employees.
The good times that was had in the 1970s, when anyone could open up a business and succeed, are gone. Business will never be the same. It has virtually nothing to do with whether or not the economy will recover, but down to the fact that today’s business owners are aware of and controlled by ever-increasing government regulations. This red tape makes it difficult for small business owners to achieve their full potential, and on top of it, many of them are also facing competition from giant corporations.
A prime example is a one-stop financial organisation that was in business during the 1970s and 1980s. Their clients could have all their financial, legal, insurance, superannuation and investment needs, including real estate, share market and business, handled under one roof. Four partners handled this convenient service:
- An accountant with a real estate license
- A registered stock broker
- A solicitor
- An insurance broker
In the business world of today, a similar operation would likely require at least 20 qualified specialists in each area. They would namely be:
- Five accounts (general practitioner, superannuation specialist, trusts specialist, company structures and tax specialist)
- Approximately five specialist solicitors
- Several different investment specialists
- A money manager
- A financial planner
- A finance broker
- An insurance advisor
- An assurance specialist
- An experienced real estate agent
- A team of professional advisors and support staff
Another example is the case of anyone wanting to invest in a real estate development. It would be necessary to hire:
- A project manager to advise you and assist in coordinating.
- An architect
- A draughtsman
- A town planner
- A finance manager
- A construction manager
- A marketing manager
- A sales manager
- Not to mention construction crews, tradespeople and support staff!
Most people can get involved in business with little or no assistance initially, but when we invest in a company, and it’s well managed, it has the ability to outperform any other type of investment.
It never ceases to amaze the amount of effort that some business owners waste. They still do the mundane jobs themselves that they should be hiring out to contractors or support staff. It’s time to change how you think about your business. What is this wasted time costing you? How much more could you earn if you used the time effectively?
The trap is believing too heartily in the old adage that if you want something done right, you must do it yourself. The fact is, that perception needs to change. Someone else is probably able to do the job more effectively and efficiently for you, when it’s the only job they have to focus on.
In the meantime, instead of following up on quotes, networking, or reaching out to existing clients and ensuring their satisfaction, you’re bogged down with administrative tasks that could be delegated elsewhere, and earning yourself about $5.00 per hour.
Consider how much time you need to develop a new marketing strategy, analyse, test and measure results, develop relationships with other businesses and participate in the other necessary activities that will make the difference between a successful business and one that is average, and slowly going broke.
Next, consider how you can make more time to work on these areas, and identify what the difference is between your business and the average franchise. The answer is typically “systems.” Systems aren’t just applicable to large corporations. They are a key factor for small business success, and their benefits are many.
Developing and following systems ensures operational integrity and gives you peace of mind in knowing that everything has a place and will run on time. It makes you more efficient and minimises costs. Accordingly, it also improves consistency and customer satisfaction, lowers prices and provides you with a competitive advantage.
The soundness and capability of your infrastructure will dictate the scope, nature and overall effectiveness of the marketing strategies you can pursue. And finally, streamlining your business will impact its cultural nature, improving employee motivation and morale.
We encourage you to take this challenge and see your business as a valuable investment, not merely a job or a pastime to sustain you until you hopefully win the lottery and can escape! Seek out returns on your invested capital as well as a set hourly rate of pay for yourself that is in excess of what your top employees earn. After all – it’s your business.
Review your results from last year, analyse the data and start to consider what needs adjusting. Using that information, plan the next year and seek out the assistance you require to obtain your goals.