So, here we go. This is the very first monthly piece, as a part of my regular series, to you, the small business owner.
Here’s the deal: I’ve been meeting with business owners since September 2005 when we were a 3 man company. I’ve worked with thousands of business owners from start-ups, medium sized, to Fortune 500 companies.
It’s really given me the privilege to understand what people have done right, and what they’ve done wrong. Often times you learn more from what a company did wrong than what they did right. You learn more from a good business, that’s made some bad decisions and fell off the wagon, or a struggling business that made changes and became successful.
One of the number one issues I’ve seen with a small business owner that stops them from growing is they try to do everything themselves.
It’s the idea that, “Well, money’s tight. I’m not going to pay someone to mow my lawn, I’m going to mow my lawn.” or, “I’m not going to hire an accountant, I can use excel spreadsheets to run my finances.”
A lot of you are intelligent enough to do all of it.
The question you need to ask yourself is this: just because you can do something, should you?
Don’t underestimate the value of your time
I understand why people do this. For me, I don’t mow my lawn. It’s not because I’m lazy or not good at it. I can do it. Some people love mowing their lawn. For me, there’s a guy I can pay $50. He does a better job than me, he’s faster at it. Now I had the chance to spend 1-2 hours doing something more beneficial, either for my company or for myself.
Same thing goes for other tasks in running a business. I should be doing what I excel in at my business, because I make more money investing my time at what I’m good at.
If you’re running a business and trying to grow, your most valuable asset is your time. You can’t get more time.
I see so many business owners micro-managing everything in their company, from sales, to accounting, to marketing. These owners do all these things, instead of billing out $150 an hour, in a way to save money.
Instead of making sure their accounting is being managed by a professional, they’ll go plunk around in QuickBooks, and they’ll run the checks to the bank. Instead of outsourcing their marketing, they’ll try to do it all themselves.
They’ll do these things because they think they’re saving money.
They don’t want to pay a ACH fee of $30, to automatically collect their accounts receivable, but will physically drive a paper check to the bank, which quantified, costs the business more than that $30 fee.
They don’t want to have to pay an accountant $50 an hour, but will lose $100 by spending your time trying to save $50.
You can’t buy more time. Spend your time wisely.
It’s not because “I’m too good for that”
It’s not about “I’m better than mowing my lawn” or better than doing sales or accounting.
Spending the extra money to delegate tasks to people who are good at those tasks is just a way to make your business run better.
If you do that, you’re going to get a better product. To be honest, paying someone money to do other jobs, allows me to use my strengths that I’m good at to generate more revenue for our company. This is knowledge applied, which is the definition of wisdom.
Switch your thinking; a cost could be a blessing
This kind of penny pinching will cost you time and ruin your efficiency.
You buy a point of sale system, for example, because it’s efficient and it saves your bar and restaurant money.
It reduces theft, helps you control your food costs, and your employee cost. You don’t buy it because it’s an expense, you buy it because it’s an investment that makes you money.
The smaller business guys that I see struggling to grow, struggle because they look at a bill and think “Why would I pay someone else $50 when I can do it myself?”
Your mindset needs to change to, “Wow, I can pay someone $50 and I don’t have to do it anymore, AND I can go do something else that will make more money for me and my business.”
Trust me, you’ll get more done if you spend a little bit of money for efficiency’s sake.
If you want to keep growing, you’re going to have to sacrifice penny pinching to make your business better.
Just because I could write every blog for our company, or build a website in Wix.com, doesn’t mean I should. I can answer customer service calls, but that doesn’t mean I should.
My priority needs to be on what I’m good at. Yours does too.
A business has to be efficient, and that’s for the overall betterment of our company, our employees and our customers.
Stop fretting over small chunks of change
If you can’t justify spending $20, $30, or $40 on something that’s going to improve a process for you or your business, you’re always going to be small.
You’re probably not going to get out of your business what you’ve put into it. I could be wrong, but with the many businesses I’ve worked with that struggle to grow, constantly penny pinching is the problem.
Would you rather pay a professional $20 an hour who can balance your business’ finances in a day? Or do it yourself and waste three days of your time, that you’ll never get back?
Take that time you would have spent playing around in spreadsheets, and focus on customer projects, sales, or whatever you’re good at.
You’re investing your time and abilities into something that will help you earn more profits in the long run.
And if you’d like to suggest a topic for me to talk about, fill out the form to the right. I always love hearing feedback and thoughts from fellow entrepreneurs.