As a small business owner, there will be a multitude of things that get in the way, eat up your time, and distract you from all the hard work that needs doing. It’s par for the course when it comes to running a small company, but the reality is that every second you waste spent on unnecessary tasks is actually costing you money.
Here’s an example for you. Let’s assume that you are responsible for making sales for your business. When you’re out in the field meeting customers, you earn an average of $3,000 every day for the company. But because you have piles of paperwork to deal with, you only have the time to make sales for three days a week - the other two are saved for filing, updating accounts, and the general admin that accompanies every sale. The trouble is that, in essence, you are losing $3,000 twice a week, just to do admin.
Now picture yourself doing sales five days a week. Your company sales will go up from $9,000 to 15,000. And if you hire a part-time admin assistant to do the paperwork for you, it will only cost you something like $150-200 a day, twice a week. That’s a huge difference and one that could make or break your company. As you can see, losing your sales focus is costing you money - and here are some other examples that many small business owners experience.
Losing sight of the bottom line
How do you feel when one of your competitors or another entrepreneur starts bragging about hitting a million bucks in sales? Most people will do their damnedest to figure out how to beat them. But the reality of a million in revenue is a lot more complicated. It’s not profit, and you have no idea how much those sales actually cost. Never put all your focus on your top line, and always try to reduce your costs and improve your bottom line. This way, by the time you do reach the magic number, you’ll be able to keep more profits for your business.
Making things complicated
As a small business owner, you are probably used to doing everything yourself. But let’s take something fairly complex such as your IT systems as an example of why this might be the wrong route to take. As myIT.com point out, IT troubles can cause enough problems for experienced professionals, let alone someone who is trying to run a small company. And if you have a lack of expertise in a subject, it’s only going to take you longer to deal with any issues. Whether it’s IT, marketing, or accounting, it’s almost always more cost-efficient to hand over the reins to a pro.
Finally, a lot of small business owners get glassy-eyed over all manner of things - and their cash flow often takes a hit. According to Forbes.com, there is a strong urge to invest in ‘this, that and everything,’ and if you lose your focus on what really matters, you will have problems. Take a hint from some of the greatest investors in the world, and sit on your cash for the majority of the time, rather than emptying your pockets at every opportunity. Your business will be a lot more secure as a result!