So often as a business owner I see other small businesses making this critical mistake. I really do believe that this mistake alone, cannot only severely cripple a businesses overall profit, but also prevent it from growing to its true potential in a particular market.
We all know the guy. He runs the landscaping business. He knows the business up and down, creative, hard working, experienced and honest. When it comes to landscaping, he is the guy to hire, hands down.
Problem is, he is so stretched for time. He is always running to a job bid, or doing a tricky install, paperwork, taxes, bill collecting, payroll, building a website…..
Now instead of a business owner, he is a super worker. Now, trust me I understand the toils of small business ownership, in the beginning, and at stages of the business growth this may be necessary. But it is not healthy for you as a person, or the business. And if you simply sit back and look, you will realize that it is not profitable.
It is so tempting to double-dip when your starting out in business. Why hire guys for $20.00 and hour when I can do it myself and make an extra $30 an hour. (unable to accept and account for the necessary costs of employees)
By not hiring that extra helper, I put $1200.00 week in my pocket…No that’s over $50,000 per year. In some peoples case, they are not looking to build a huge business, but simply want to do what they love, and have complete control of it. That’s fine, and honorable.
Instead of looking at it that you are saving $1200.00 per week, you need to see that you are probably losing more than you are saving. Understand yourself and how you play into the small company mix. For example if you are a talented sales person, and you alone or by leading a small team bring in all the work for the company, the company is not going to be benefiting from you laboring.
To find out what you should be doing, think about the costs to replace somebody that does what you do. If you are in sales, think of the talent you would need to recruit to pull in accounts and run your business…
If you were a doctor and made roughly $125.00 per hour during the billable week, would you take the day off to mow your friends yard for $75.00 per hour? Well, maybe you would, but not for financial reasons…
Same thing, if you sell 10k in construction projects per week, and a qualified salesmen would need 1k in commissions to generate this, would you hire a salesmen and labor for $800.00 week, or hire a laborer and keep selling?
It may seem that I am going into this in extreme detail and that’s because I want you to understand how important it is to allocate your resources and delegate properly in your business.
Things that I believe should be delegated for all business:
1. Payroll
-This will instantly save you a couple hours a week.
2. Taxes
-Eliminate the stress, and error potential. The IRS will put you out of business before your competitors will.
3. Web Design
-A clean website with SEO & ad words is the most cost effective and smart investment you can make in business today.
4. Administration Assistant.
-If the volume and profit is there, strongly consider this, you will never look back.
In my experiences, failure to understand this principle has been one of the single greatest set-backs in to business owners achieving growth.
If you have more questions concerning this article, please feel free to email me.
Author – Ryan Grambart 12/29/2010
