29 Nov 2016
Is saving a wage costing you a fortune?
We've all heard the phrase "working ON not IN your business" and it's at risk of becoming a cliched business phrase that's just thrown out without much thought. But I want to raise these two questions:
Is saving a wage costing you a fortune?
Are you “investing” your time working ON your business or “spending” it working IN your business?
The challenge that I find a lot of business owner 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!!!
That's not right is it?!
A while ago, we had a client who owned a commercial cleaning business.
This client used to work each week doing some of the cleaning himself. When asked how much would it cost to employ someone to do the cleaning he was doing, he replied “about £300 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 £1500 worth of new business in a week!
Boom! Light bulb moment!
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 of the “operational” work you are currently doing, could be done by someone else to free you up to spend time on business development / income-generating activity?
Here are some questions to consider:
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.
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.
There is of course another angle to the question of how you spend your time which is probably the subject of another post and that is:
Do you suffer from a 'super-hero complex'?
Are you doing all the jobs because “no-one else can do it quite as well as me!”
In short, the more central we are to our business the less chance we’ll ever have of maximising its potential and creating the life we ultimately want for ourselves.
Business is there to serve you. Not you to serve it.
If this resonates with you and you want to challenge yourself to make the necessary changes in your business please get in touch at email@example.com or 07972 310997.