As explained in the first part, it may seem excessively simplistic
to do so, but the principles of getting control over the day to day
management of the business can be distilled in 5 simple principles
which are in order:
- – Get Serious
- – Balance the Load
- – Tool Up for the Job
- – Focus your Activities
- – Outsource (what you can)
Part 1 covered the first two of these principles, the following
sections examine the remaining three in more depth.
3 – Tool Up for the Job
This will seem to be self evident, but is often neglected in some
pretty critical ways – usually for perceived cost saving
The question to ask is: “is not spending this money,
actually costing me money?”.
A classic example is the computer and the excuse of “I have
a computer already so I don’t need to buy one”. The mistake
often made is one of using an older machine loaded with family
photographs, instant messaging software, poorly protected and loaded
This situation will just eat fee earning time and is an accident
waiting to happen – especially if your business based backups are not
100% and the hard drive fails.
Better to start with a dedicated machine with up-to-date software
and a solid backup solution (can be just a portable external drive)
that you use consistently. Additionally this machine should be used
for nothing other than business purposes.
This is of course part of the getting serious mind set and, if you
are working at home, put the machine in a separate room with a
separate phone, desk, fax, filing cabinet etc.
Of course there is more to delivering a service than computers,
but the principle of not working around your equipment is the
key. If you are spending time waiting for the equipment to do
something, you should evaluate exactly what this lost time is costing
you. This time is called Opportunity Cost and it can be simply
calculated as follows:
(Hourly Charge out Rate) X (Lost hours waiting / working around
If you do this calculation for one week’s worth of waiting
or working round time, you may well realise that not spending
one or two hundred pounds could be costing you thousands.
A further error could be not investing in management and
administration software such as such as ProQuin (see:
Software like this will not only put control into the business, but
save you hours of administrative time.
4 – Focus your Activities
In part 1 I mentioned the need to fit in sales activities into the
working week and one of these could be a networking event. You
will quickly learn (I hope) that there are networking events and
there are networking events.
Some events are well organised and highly focussed on ensuring
attendees are doing business with each other, but many are cynically
put together and a successful outcome from attendance can be a
lottery. Remember, it is more likely that people will be attending a
networking event to sell rather than buy. Therefore, you will often
find yourself in conversations where the other person is much more
focussed on telling you about their offering rather than listening to
you about yours.
Networking events can eat time. If you are not careful about which
ones you attend and how you use them you can lose hours of valuable
time each week for little or no benefit.
Like the issue with tooling up correctly you always need to
calculate the opportunity cost of networking, meetings and
follow up activities.
Focussing your activities in this regard means focussing on the
money. Whether this be networking, sales presentations, joint
ventures, training courses, information seminars, expert
consultations or whatever, if you cannot see a direct link to short
to medium term earnings it is likely that, as a small business
person, you should not be involved.
5 – Outsource (what you can)
The last, but not least, principle in terms of getting control
over your small business is to outsource whenever possible. This
means in all areas, i.e.: delivery, administration and sales. The
reason why you need to consider this is that outsourcing can extend
both your personal time and the reach of the business overall. It
will give you the time to work on the business instead just
working in the business.
It is counter intuitive to say so, but outsourcing service
delivery can make sense – especially on start up. If you can find
individuals who will price work at 75% or below of your normal
selling price, then outsourcing can make sense, leaving you free to
concentrate on a greater percentage of sales work in your weekly
schedule while still effectively earning. This will allow you to
develop a sales pipe line and decide how much work you will do and
how much you will farm out.
Administration outsourcing is more widely accepted with
outsourcing for things like accountancy more being readily and widely
taken on board.
Sales is by far the hardest things to outsource. There are plenty
of companies and individuals out there claiming to do this, but it is
always a huge risk, especially if you have any intellectual property
to protect. Be prepared to give a large percentage of the sale in
commissions – especially if using freelance sales agents.
Although by no means the full story, the above 5 principles of
small business administration, management and control provide a solid
basis to get started and make your business grow.